Home Energy Management Means Sustainable Opportunity Across the Board

By: Erin Woodward*, Global Sustainability Leader at Resideo

As with any year, 2022 continued to prove that contrasts are the norm, especially in the residential new construction (RNC) space. Ongoing shifts in the U.S. housing market, whether coming from supply chain disruptions or through the evolving economy, are combined with opportunities for contractors and consumers alike to consider supplementing where and how they live with new tools, systems, and technologies – courtesy of a boost from the Inflation Reduction Act (IRA) passed this summer. Without a doubt, the balancing act is real!

When such contrasts come together, the first instinct may be to stick to the most straightforward option. At first blush, setting up a new home for improved energy management would seem like a task best-suited for an HVAC team that is tackling all of the indoor air quality systems. The great news is that thanks to a number of factors and trends that have been bubbling up throughout the last 12 months, enabling better energy management technology and services across a wider range of homes is more within reach than ever. And with palpable market demand and opportunity, that can rapidly open the door to delivering some real impact in the near- and longer-term for both you and your customers.

As we close out 2022 and look towards rising energy costs in 2023, energy conservation will no longer just a “nice to have” and is instead ready as a “standard operating procedure” for more of your jobs over the next few years. Is there no better time than now? Let’s take a look.

An Awareness Boost Across Generations

Before a customer even steps through the door of their new home, it is becoming more likely that this summer’s IRA – or climate bill as some have referred to it – is going to be top of mind for them. The suite of tax credits, rebates, and other savings opportunities through the IRA are available as early as now, ready for people who decide to make investments in next-generation features and services. Personally, I took advantage of more efficient fuel offerings and a $7,500 tax credit and bought my first electric car this year – a Ford Mustang Mach-E

Many of those savings have direct ties into potent home energy management technologies that can supplement existing practices and products. Additional savings, and the technology that will make them possible, will roll out over time, meaning a growing wave of interest and demand will be more likely.

Findings from the team at Parks Associates indicate that at least 44% of U.S. Internet households say they’re actively working to reduce the energy consumption within their homes. That is an important recognition, given that, on average, more than half of a household’s annual energy consumption (51%) is for just two energy end uses: heating and air conditioning, according to the U.S. Energy Information Administration. Factors such as water heating, lighting, and refrigeration account for approximately 27% of total annual home energy use, and 21% toward devices that include televisions, cooking appliance, clothes washers, clothes dryers, and a growing list of consumer electronics.

While those figures are a few years old, the mix of energy use certainly will continue to fluctuate. As smart controls expand, so too does an opportunity for security dealers to integrate and better manage – plus maximize – the energy use from a home’s connected systems.

As new homes continue to feature such integrations – providing both management capability and energy-use information to the homeowner – and as security dealers’ understanding of what’s possible to further supplement improves, dealers are likely to have increased opportunities for additional engagement and revenue from customers.

Possibilities Across the Market

While the IRA has seemingly put a fresh spotlight on energy management for homes and other areas – from consumers to manufacturers to service providers and beyond – it is also building upon an existing foundation of consumer interest, as well as sales opportunities.

The International Energy Agency has determined homes that incorporate energy efficiency measures – those that can reduce energy consumption and operating costs – can result in a sales price premium ranging from 8.5% on up to 26%. Earlier this year, the U.S. National Association of Realtors also found that more than half of their clients are at least somewhat interested in sustainability.

When looking across different generations of home buyers, millennials are seemingly the most prominent group when it comes to the housing market, both spending more money for a new home and, according to a recent study from Deloitte, also making an effort to reduce their personal impact on the environment (90% of Gen Zs and millennials). In a similar vein, millennials rank “making improvements to their homes for increased sustainability” as one of top go-forward actions.

The technologies and devices that can make a home more sustainable through improved energy consumption span small and large: from smart thermostats, water management systems and detectors, and lighting controls, all the way up to homes’ major systems, such as heat pumps, tankless water heaters, connected appliances, solar panels and more. Coupling multi-device and even whole home control systems through a combination of both hardware and easy-to-use mobile apps and software, will open new doors for customers for the foreseeable future.

That is almost certain to be even simpler for manufacturers, dealers and customers alike as more industry standards evolve; such as the Connectivity Standards Alliance’s (CSA’s) Matter protocol and the Home Connectivity Alliance (HCA), an organization dedicated to secure interoperability across long-life appliances (i.e., HVAC systems, large appliances, televisions, etc.). The goal with these standards is to provide simplification across the smart home, unifying how devices are set up all the way through how customers use them daily. This could mean a whole host of scenarios where integrating various sensors, say from a connected security system, then applying video analytics and services, and linking it all to a home’s system can provide nimble, real-time impact. One example would be the ability to know if a window was open during a hot or cold temperature swing and modulating the HVAC system to avoid overcompensating until the window can be closed or the room vents are closed off. Rapid detection of a leak within a home’s water system and then being able to both reduce or stop the loss through a smart valve while also contacting a service professional is another real-world scenario that comes to mind.

An Opportunity That’s Sustainable

No one can predict the future, and nothing is guaranteed – at least the last time I checked. But another truth seems to be bubbling up if indicators from the past few years can be believed: building out homes that are smart, connected, and provide ways for customers to not only understand but also control their energy management is bigger than ever. It’s an opportunity to sell the customer on long-term value, and not just based on price. The stars are aligning on the simultaneous intersection of U.S. legislation, price increases, improved technologies and systems, a growing awareness of what is available, and customers who are more willing than ever to try things that enhance the connectivity and efficiency of their homes. It’s important for dealers to stay up to date on energy-efficient technology and manufacturers’ efforts now - because then they can educate homeowners about equipment operation and maintenance in the future.

It really does feel like the idea of a sustainable home – true, a promise talked up in many circles for numerous years – is quickly coming to an inflection point. Will there be bumps in the road and pivots to make? Without a doubt, and it certainly must be a concerted effort of cooperation across groups, especially in the residential, new construction space.

The great news is that we here in the homes-related industry have been able to take on big challenges like this before, working to evolve the market, bringing customers along the journey, and establishing ways of working that truly can benefit everyone involved.

That is what keeps me going every day – the persistence, consistency, and excitement is infectious. It is something that can and should be celebrated collectively, perhaps now more than ever. And then being able to not only say but actually show real, impactful change? That is opportunity I am ready to get behind every single time. Let’s go!

Originally published in Security Sales & Integration and re-printed with permission.  

*Erin Woodward is based in Minnesota and served as a municipal development volunteer in the U.S., Peace Corps for two years in El Salvador, Central America. She leads sustainability for Resideo’s Products & Solutions business, where she champions bringing Environmental, Social and Governance (ESG) into the business strategy and innovation pipeline. Erin sat on the steering committee for the Sustainable Growth Coalition, a business led partnership building collaborative circular economy projects to advance clean energy and protect and restore the natural water cycle.

Erin holds a Bachelor of Arts in International Relations and Spanish from Saint Anselm College in Manchester, New Hampshire and a Master of Nonprofit Administration from Hamline University in St. Paul, Minn.