Wireless home automation may seem like it snuck up on us, yet the smart home market has been around for four decades. What’s changed is the rapid success of voice assistants, the internet of things, technologically confident consumers, and a steep cost reduction in controls and components. What this means for the electrical contractor is a bigger playground in a rapidly growing market.
Statista, a global market and consumer data firm headquartered in Germany, reported North American consumers are expected to spend $63 billion on smart home systems and services by 2022. In 2018, it’s already a $40.3 million business with expected annual growth of nearly 15 percent through 2022. Market penetration in the United States is estimated at 32 percent and is expected to reach 53 percent by 2022.
Who needs ECs?
“I often say there is nothing wireless about wireless,” said Mitchell Klein, executive director for the Z–Wave Alliance. (Z-Wave is a wireless communications protocol based on a mesh network topology.) “That may not be not 100 percent accurate, but it’s a good guiding principle for contractors. When we talk about smart home and wireless, we are talking about the methodology devices use to talk to one another. You still need the electrical contractor to put in the wired devices whether they be security panels, power for HVAC and controls, security cameras, lighting control devices and so forth. Devices need to be powered. Wireless is especially attractive today because it doesn’t need a proprietary wiring configuration.”
Yet the perception remains that the rise in wireless may reduce demand for ECs. Thomas Morgan, director—product management, energy management, controls and automation, for Leviton Manufacturing Co. Inc., said that is a misconception.
“A dimmer or switch still connects to 110 volts AC,” he said. “Your typical non-DIY consumer is still anxious working around electricity. That doesn’t mean they don’t want to control their lights from an app. All wireless technologies need wires eventually. Wi-Fi still needs an access point, and a hub still connects to a network. Wireless simplifies the installation and expands the market to both new construction and retrofit.”
Wireless communication used to be less reliable or slower than hardwired.
“Wireless is no longer a compromise,” he said. “It simply opens up a larger number of potential sales opportunities for upgrades. Because customers today are far more aware of the possibilities and capabilities of home automation, the number of contractors that can participate has exponentially grown. The dynamic has changed but the installer remains.”
Home automation device companies, such as Lutron Electronics Corp., Leviton Manufacturing and Eaton, are each claiming their niche, which in turn is making the EC a more specialized player. Beyond installation, the homeowner is now turning to the electrician for expertise and planning in smart house lighting control.
“Manufacturers are playing their own individual roles in home automation,” Morgan said. “For example, Google’s Nest focuses on thermostats and security. Sonos focuses on quality wireless sound and speaker quality. Then we have the artificial intelligence [AI] voice hubs such as Google Home or Amazon Alexa that can connect to individual home devices.”
Eaton Corp., based in Cleveland, also is active in the wireless home automation market.
“A lot of the home automation technology has been around for some time, but advances in voice control with giants like Apple, Google and Amazon have raised what’s available and increased interest not just with home owners but contractors and manufactures, as well,” said Rob Keeler, Eaton’s national homebuilder sales manager—residential and wiring devices division.
Morgan said home assistants have fundamentally changed the consumer perception of home automation.
“Home assistants have altered how consumers interact in the home,” he said. “They have also eliminated the cost barrier of smart home entry. Installation costs for whole-house automation was as much as $3,500–$5,000. High-end systems of course still exist. Today, an outlay of maybe $50 gets you started and can be controlled by a hub. Smart products become extensions for the consumer’s home experience. Home automation went from a luxury to just plain cool for everyone.”
Building on the ease of home automation entry for consumers, Klein referenced the price of smart dimmers that not too long ago might have run perhaps $300.
“Today, they can start at $39 on up,” he said.
Meanwhile, automation products readily available from big box stores drive an element of do-it-yourself. However, pure DIYers play a minor role in the home automation arena.
“There is a middle ground where do-it-yourselfers might start a project but turn to a professional like the electrical contractor to assist and complete the work,” Klein said.
Marketing the market
Discovering “unrealized needs” for the customer is an important mindset to growing business in wireless home automation.
“So, instead of simply installing requested dimmer switches for lighting, you might suggest how the homeowners can make the house look lived in while they are away by adding a lighting system controllable through an app on their smartphone,” Morgan said. “It’s an upsell where the consumer gains benefit, your installation has grown and your profit is greater.”
Klein offered a few other upsell ideas.
“Marketing helps in the wireless home automation sector,” he said. “Use the low-hanging fruit of your customer list, past and present, and create an outreach campaign asking ‘Do you have Alexa? Did you know your Amazon Echo can control the lights, lock the doors? I can help get you there.’ You’d be surprised how residential customers are looking for a way to get things done to make a smart home.”
Keeler also suggested an EC’s success with a homeowner can lie with one important trait—listening.
“ECs are now in the position to prove the value of lighting controls and extend home control to thermostats, locks, security and home entertainment,” he said. “You can help homeowners define what a smart home should be for them. Maybe energy savings is their driver. Perhaps security. Maybe audio and video. Listen to what’s important to them so you can smartly advise and explain the value of the components you suggest. I would add, it helps if you work in both low and high voltage. If you provide one service without the other, it confuses the customer.”
There’s no reason to believe renters and condo owners are less interested in smart home technology.
“I think there is a huge opportunity for a wireless home automation market in multifamily,” Klein said. “Stand-alone technology installed separately in apartments or condos is one opportunity. There is also the property manager side. I have seen developers wanting to ensure vacant units maintain temperature control to avoid freezing pipes or are easily accessible for real estate agents or painters and other contractors. Apps controlling thermostats or wireless lock control can be important tools for property managers.”
Automated control for common areas is another opening.
“Maybe its adding wireless control of temperature, lighting, security, or the addition of AV installed in a public party room, gym, foyer, laundry room and so forth,” Morgan said.
What communication protocol is best?
“Wi-Fi may be used in almost all your wireless applications as it offers high bandwidth for streaming,” Klein said. “More important for the EC, when it comes to wireless protocols, is to understand what device works with what.”
As president of the Z-Wave Alliance, Klein certainly has a mesh network preference.
“Z-Wave is an end-to-end technology, so devices communicate to each other,” he said. “So, a hub or gateway helps to configure the home. It enables controls to communicate with other technologies. A cell phone can communicate to the hub. If you unplug the gateway, you simply lose device control outside the home. The more Z-Wave friendly devices you put in the house, the stronger the signal gets. Over 2,400 products are now Z-Wave interoperable”
Leviton wants its Decora Smart line of lighting control switches, dimmers, device control plugins and color-change kits to play well with a multitude of protocols. They include Wi-Fi, Z-Wave, Apple’s HomeKit and Bluetooth. It also offers the Samsung SmartThings Hub to tie devices together and add compatibility.
Eaton offers its HALO Home Smart Lighting System of dimmers, color tuning, bridges and apps that play well with Bluetooth, including outdoor lighting, Z-Wave in some applications, and ZigBee for recessed Wi-Fi down lighting. Eaton offers both Samsung’s hub product and Wink.
“The strides in the last five years or less have been remarkable for home wireless automation,” Keeler said. “We talk daily about this product category. In the future, a home component will have some semblance of wireless control. In general, this space will provide incredible growth opportunities for ECs and allow them to expand their portfolios.”
Lutron’s Caseta wireless installs easily and can be extended with an optional Smart Bridge to program a schedule.
Klein advises that ECs be integrated installers earning certifications from CEDIA for AV installs, certify through alarm companies for security installs, and train and certify in lighting controls from companies such as Leviton, Eaton and others.
“What trade today owns the home automation market? The simple answer is none of them,” Morgan said. “The market is exploding, and there is massive opportunity across the country for companies to establish themselves. Lighting is a key element of any automated home. The question is if the electrical contractor is allowing other trades to offer products in a market they should own. Opportunities in wireless home automation are spectacular, but the business models have shifted. The better you understand those shifts, the better you will participate in this market.”