Hohm Shows Way to More Energy-Efficient Future

REDMOND, Wash., Aug. 13, 2009 – For years, the smart home has been envisioned as a place where the coffee maker knows you need a jolt of caffeine, the refrigerator orders milk when only a quart is left, and the TV tunes in a favorite program when someone walks into the room.

Rising energy costs and demand and smarter consumers, however, have turned attention toward a more tangible value of the smart home: energy conservation.

Microsoft Hohm helps consumers create a detailed report about their home’s energy consumption, and offers advice on how to cut energy use.

The smart home today isn’t just about smart appliances; it’s also about putting consumer-friendly technology in consumers’ hands so they can manage their energy use. Manufacturers predict that smart thermostats and smart plugs that use wireless technology could soon be available and affordable for consumers. And consumers can already take advantage of a technology boom to gather information and manage their energy consumption with products and services already on the market.

These technology advances appeal to consumers motivated to lessen their carbon footprint and preserve the environment, and those who simply want to live more economically. Consumers who conserve also help utilities prepare to manage more zero-carbon energy sources such as wind and solar and manage demand while keeping the lights on.

“The most scalable, cleanest and cost-effective energy source comes from conservation,” says Jon Arnold, Microsoft’s Worldwide Power and Utilities director. “Consumers want to take an active role in their own energy management. They are more environmentally aware and want to save money and conserve.”

Microsoft has joined the energy conservation effort with Hohm. Announced in June 2009, Hohm is a Web-based application that uses advanced analytics to provide consumers with personalized energy- and money-saving recommendations. Suggestions include plugging air leaks and insulating attics.

Here’s how it works: Consumers in the United States go to http://www.microsoft-hohm.com and create an account using their Windows Live ID and postal code. Next, they enter information about their home structure, heating and cooling systems, as well as other details such as the number of occupants and types and age of appliances. The system uses algorithms and data from Lawrence Berkeley National Laboratory and the U.S. Department of Energy to analyze the information and create an energy report with personalized recommendations. The more information consumers provide, the more accurate and relevant the recommendations will be. And as utilities work with Hohm, consumers will have the added value that the utility can load their historical energy usage information via their secure account to watch energy use trends.

Since Microsoft announced the Hohm beta, consumers worldwide have contributed comments on the Hohm Facebook page. One wrote about Hohm’s ease of use: “I already completed my home profile info. Took me 10 minutes.” Another wrote, “This is Microsoft Hohm court advantage on the Smart Grid.” Many others hope their utilities soon sign on as industry partners.

Elsewhere, hardware manufacturers including Black & Decker and Energy Inc. have created gadgets that consumers connect to the electric meter. These devices measure and report how much power people use in their homes so that consumers can watch their costs go down as they turn off lights and use less-powerful appliances.

In addition, Cisco Systems, Comcast Corp., General Electric and ADT Security Services are investing jointly in iControl Networks, a small company that, along with competitors 4Home Inc. and Intamac Systems Ltd., is developing the capability to remotely monitor home thermostats, lights and security systems from the Web or cellular phone.

The potential gains from conservation are enormous. For example, the Natural Resources Defense Council (NRDC) estimates some 50 million computers in American offices and homes that are left on when they’re not in use. If power-management tools now available in Windows-based computers were used widely, that could cut $500 million from the nation’s energy bill and eliminate 3 million tons of global warming pollution, says the NRDC. Other savings could come from turning off lights and TVs, sealing air ducts, and replacing old appliances with newer, more energy-efficient ones.

For consumers, the big motivation is financial. In a May 2009 Gartner Inc. report titled “Utility Consumer Survey: Energy Efficiency, Do They Care and Why?” analysts asked survey participants directly: “If your utility company offered an energy efficiency program, would you participate?” Consumers expressed interested in a 4-to-1 ratio in both the United States and the United Kingdom.

Gartner also asked for “the most important reason why they would participate in an energy conservation program. Cost reduction, not surprisingly, was the main motive in both markets.”

Utilities today face new challenges generating and distributing energy, so they welcome tools – such as Microsoft Hohm – that encourage and simplify conservation.

For utilities, the stakes are even higher. They face new challenges in how energy is produced and consumed. Since the wind doesn’t blow and the sun doesn’t shine constantly, zero-carbon energy sources such wind and solar are variable and often unpredictable. And consumer usage patterns will change as people plug in millions of electric vehicles in garage outlets each evening, creating a huge demand spike. Although a smarter power grid will help manage the roller coaster energy demand, new power plants or conservation are also needed.

Building new power plants is an enormous time and financial investment — a nuclear plant, for instance, can cost as much as $800 million for a typical 800-megawatt plant and require upward of 12 years to complete: Yet energy demand worldwide is expected to increase anywhere from 16 percent of current usage to perhaps twice current usage, depending on who is doing the estimating. Any significant demand increase will likely mean higher prices for consumers as power companies explore traditional and alternative energy resources to help meet these new challenges.

Sharelynn Moore, director of product marketing at Itron, believes that smart meters and other technology upgrades help utilities learn more about energy use patterns, which allows for general awareness, special rates and programs for consumers that reduce consumption during peak times and ultimately reduce consumer costs. “As utilities build a solid smart-grid technology base, they want to pursue technology investments that will positively impact the consumer, such as replacing traditional meters on homes with smart meters,” she says. “They also help utilities run more efficiently and lower their overall carbon footprint.”

In Microsoft Hohm, utilities have access to a scalable, cost-effective tool they can offer their customers as a free service. It can also help utilities meet increasing energy conservation regulatory requirements and promote their rebate and conservation programs.

Utilities working with Hohm — including Puget Sound Energy, Sacramento Municipal Utility District, Seattle City Light and Xcel Energy — believe that putting home energy management into consumers’ hands is a good idea. “We share the belief with Microsoft that better information leads to better choices in energy use,” says Steve Reynolds, CEO and president of Puget Sound Energy. “Microsoft Hohm will help our customers be more energy-efficient by providing new insights and understanding into how they use energy and how they can conserve.”

According to Arnold, as U.S. state and federal regulatory trends move more toward conservation as an additional motivator for consumers and businesses alike, “power companies must respond and accelerate the path toward energy conservation. Leading the trend, or at least joining in by encouraging customers to conserve, can help power companies meet regulatory requirements, manage demand, and improve customer service and their reputation,” Arnold says.

The combination of conservation and cross-industry collaboration will help make a difference. “And if cutting our carbon usage was easy, we would have done it by now,” Arnold adds.

One can only hope that homes will never be so smart that the freezer scolds people who reach for a late-night ice cream snack.

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