The successes thus far in the home energy management market have been rare as getting consumers to care about their energy use has proven difficult. But the last 18 months has seen the quick rise of Nest, the smart thermostat that has cracked the market by creating industry disrupting hardware that feels inspired by the culture at Apple.
I’ve written about the consumer cleantech design phenomenon before. Put simply, companies that succeed are those that are design focused in their hardware and marketing rather than specifically focused on energy savings. Tesla and Nest inhabit these principles.
But as smart meter deployment increases and the sheer volume of energy data grows, it’s worth looking at what successful business models could be built around software only strategies, particularly in the home. Can a software company rely on hardware makers like Honeywell to build connected thermostats, in the way media platforms will have to rely on companies like Samsung and Sony to build connected TVs?
Companies like EcoFactor believe it’s a perfectly viable strategy and that channel partners like utilities, broadband providers and HVAC installers are capable of greasing the wheels by installing basic connected thermostats and then selling their cloud based software as a service (SaaS) technology on top of that hardware. In fact, the company is a classic big data bet with its software geared to tackle the energy use of home heating and cooling units, which typically comprise 50 percent of a home’s energy use.