Popularly called a "smart house," integrated homes are a world of bundled wiring, central processors, buses, touchpads and touchscreens. It’s a burgeoning market, as technically savvy homeowners look for contractors who can provide one-stop shopping and service. With a little education, some partnering with other service providers and the will to manage projects, electrical contractors (ECs) can lead while significantly improving their margins through smart home installations.

In its “Fifth Annual State of the Builder Study” issued in January 2007, the Consumer Electronics Association’s (CEA) director of research Joe Bates said, “Home technologies are, without a doubt, helping to counteract the slumping housing market. Consumers are increasingly asking for installed technologies, whether it’s for a home theater room or an intricate home network complete with servers and structured wiring. Clearly, builders, contractors and consumers believe that these offerings are no longer just ‘the wave of the future,’ but a reality from which builders and contractors are reaping the benefits.”

Home automation represents 10 percent of Wilcox Electric and Service Inc.’s business. Based in Normal, Ill., Dan Wilcox, owner and president, expects that business to grow.

“I think that as customers get more familiar with smart homes, the more they want them. Our future in smart homes is unlimited,” Wilcox said. But Wilcox also is concerned.

“If electrical contractors don’t act on this interest now, we’ll lose the business to other installers, such as audiovisual techs,” he said. “Home automation offers us the rare chance to take a project leadership role. Increasingly, builders and homeowners want it simple. They want one guy to get it all done.”

Smart houses first received national exposure in 1985 through the National Association of Homebuilders. Today, controlling lighting, HVAC and security has never been easier. Home-control manufacturers have advanced and simplified their technology for installers and consumers alike. The ability to operate one’s home through a personal computer or cell phone is making the capabilities and pitch for smart home technology very attractive in the luxury home market and beyond.

Leaving money on the table

Thomas Pickral Jr. is the manager of business development for Home Automation Inc. (HAI), a manufacturer of home-control products based in Metairie, La. He said ECs are leaving money on the table when they simply prewire and trim a smart home.

“A contractor that takes the lead is the one who will make more money,” Pickral said. “The margins are so much better, averaging 30 percent when installing home-automation technology. Our experience is most lighting control systems are being offered through low-voltage installers who are not really qualified. Audiovisual and systems-integration people recognize the value in being a one-stop provider. They also view the EC as a secondary person, someone they can bring into a project. That’s backwards. The truth is nothing can happen without the EC. If the EC takes the lead, they’ll be the one to land such work, hands down, every time. But electrical contractors need to be prepared.”

Schneider Electric, Palatine, Ill. also manufactures home-control products. Dan Loncar, western sales manager for its Square D installation systems and controls, said, “By default, electrical contractors are already in [home automation]; you need an EC to wire a system.”

“Don’t be intimidated,” Loncar said. “Start small with what you know. Begin with a package that controls some lights for the homeowner, and then add more control down the line, such as security. You build a home-automation package. Word of mouth is really strong in this sort of work, too. The customer shows it off. Interest builds with each successful installation.”

Training and partnering

Intimidation, fear or lack of interest holds back many ECs from even considering home-integration technology. All three men stress the world of smart homes isn’t as difficult or as complicated as one might think.

“Home automation has gotten easier as manufacturers are consolidating their products into a single platform,” Loncar said. “Communication between components is much better. A lot of manufacturers have training programs covering everything from the topology of integrated wiring, to system programming and handling add-ons that might include HVAC, security or audiovisual.”

Wilcox found it difficult to get technicians willing to learn high-tech installations.

“I don’t feel dealing with controls should be so foreign to an EC,” Wilcox said. “In fact, having an electrical background helped me better understand controls. It’s rewarding how you can add components to make everything work. It’s exciting.”

HAI’s Pickral also urges ECs not to walk away from what may be viewed as a computer-based endeavor.

“The EC doesn’t need to be the programming expert,” Pickral said. “In fact, you can offer full service without being a specialist in all smart house services. There are plenty of people to partner up with to bring the expertise. For instance, collaborate with someone who is more computer-centric who can do the programming. Just remember, you are the lead.”

Pickral said that while he sees some ECs come through his company’s training classes, more still need them.

“Classes are an excellent opportunity to network,” Pickral said. “Learn from others. Find potential partners. A manufacturer’s training class is the best way to find these people. In our training, we wish we saw more ECs because CATV and other low-voltage contractors, notably in AV and IT trades, are looking for them. At the very least, you can refer business back and forth.”

Technology makes it easier

Advancements in residential lighting control may help ECs confidently take a lead role in home-automation work. Companies such as Schneider Electric’s Square D and Colorado vNet in Loveland, Colo., offer distributed wiring architectures. This alternative approach forgoes a central processor linking each smart house application directly through a single network/bus line.

“With a distributed system, the control wiring for dimmers, relays and switches can be simply linked from unit to unit rather than back to one central controller giving shorter runs and lowering the wiring system cost,” said Gregory Voss Jr. of Bader Rutter & Associates, a public relations firm representing Schneider Electric. “With a centralized system, if the central controller fails, the entire system goes down. In a distributed system, each device works independently of the others, providing a more reliable, robust lighting control network throughout the home or office.”

“A homeowner may ask an electrical contractor for something out of the normal realm, such as tying in controls of an HVAC system or multiroom audio,” Loncar said. “A distributed system can make it easier for the EC to handle such requests and become that one-stop contractor.”

HAI also works to tie in all possible smart house applications into one system. “Our big push is simplification of the setting and programming of our systems for installers and the end-user,” Pickral said. “Programming lighting without a laptop is one advance. Wireless systems are entering the market, too. Such progress is making it easier to retrofit home automation.”

The incremental sell

Smart houses are a relationship business. Customers like to live with one add-on for a while and then recognize potential growth. Sharing the latest and greatest in home automation is a one-step-at-a-time process.

For Wilcox Electric, its home-automation business started with a power line carrier control system for a customer’s holiday lights. Along the way, Wilcox’s automation work and project sophistication grew.

“We’ve been doing different things in home automation one piece at a time,” Wilcox said. “A lot of our work is lighting control. Hit the garage door opener, and several lights in the house come on. With security, I can give you a button at your bedside to activate the outside lights. We also do whole-house audio.”

One product Wilcox uses is Lutron Electronics’ wireless RadioRA, a simple starter pack or mini lighting control package intended to help people get comfortable with the idea of home automation. RadioRA provides one-touch wireless control of all home lighting, by using master lighting controls to manage interior lights, exterior lights and Lutron’s Sivoia QED controllable window treatments. RadioRa’s scalability can control up to 64 dimmers.

“Most customers don’t go full blast at first,” Wilcox said. “It’s incremental.”

Wilcox mentioned that dialers also are an easy and simple introduction to home automation. His United Security Products (USP) dialers are sensors that can be installed to alert customers through their cell phone of pending crises, such as an over-taxed sump pump, a loved one’s health emergency or home intrusion.

Learn by doing

Wilcox’s confidence in smart house technology grows along with his familiarity with it. He now goes after business with builder and commercial customers. He’s installing a Square D Clipsal C-Bus network system in a school auditorium. His biggest venture, however, will be a marketing one as he uses the same product to transform his own home into a smart house model.

“With this project, I’m learning how to install this network system, as are four of my technicians,” Wilcox said.

Wilcox hopes to be done in May 2008. His project also will serve as an example of how home automation can be retrofitted into existing houses. The house will feature controlled lighting; security cameras and closed-circuit television; controls to set or run paddle fans, drapes and light a fireplace; and the ability to turn on and off power outlets in the kitchen and other vulnerable areas remotely.

“Right now we don’t advertise home-automation capabilities,” Wilcox said. “My house will be the advertisement. It will sell our message that home automation is here, and we have the latest and greatest stuff to sell.”

GAVIN is the owner of Gavo Communications, a marketing services firm serving the construction and the landscaping industries. He writes trend, design and other business articles.