With the ongoing development of the Smart Grid, there has been a lot of buzz surrounding smart appliances; devices that can modify their operation following signals from an electricity company. Based on our recent study of the market, we forecast their adoption will begin in the US, followed by Canada and then Western Europe. A small market for smart appliances is now emerging; with the greater market growth fuelled by investment by governments and by the utility companies themselves, and by the introduction of financial incentives for consumers. These latter factors are projected to create a US installed base of smart appliances near 10 million by 2020.
For example, GE plans to begin shipping “smart” washers and dryers by the end of 2011 or early 2012, to be followed shortly by refrigerators. These appliances will have a port, to which a communication module can later be inserted. This architecture, with external communication radios, allows GE to move forward with appliances that will be quickly, and fairly easily, modified to connect to the grid once the technology and communication standards are agreed upon.
Other manufacturers are taking a different approach to designing smart appliances. These companies are waiting for a firm agreement on communication technology standards so they can integrate the entire package within the appliance. The benefit of this approach is that it will require no action from the consumer to modify the appliance to connect to the grid.
The fact that GE will have appliances in homes, ready to be updated (much like the HD-ready TVs that have been shipped) means we are witnessing the beginning of a smart appliance market. The next step and current missing piece of the smart appliance puzzle continues to be the utility companies. Dynamic pricing is a must to create any sizeable demand for smart appliances. With dynamic pricing a financial incentive and therefore consumer benefit is created for purchase of smart appliances. Without it consumers will not have a reason to allow utilities control of energy usage. Without the energy management application of a smart appliance, they are simply a connected appliance, which have historically been unsuccessful in the market.
The continued adoption of other peak-load management devices is a positive indicator for future growth of a smart appliance market. Smart thermostats will lead the way for smart appliances as the low hanging fruit for utilities. Smart thermostats are a low-cost device that can shift a large percent of residential energy usage with little investment and no change in utility pricing structures. We will likely see more growth in this segment before seeing a major uptick in smart appliances. The acceptance of these similar technologies will open the door for other energy management equipment in the home.
Personally, a smart appliance is not the next thing on my “big purchases” list. I’m going to wait until my utility offers me some serious financial incentive. I’m happy to help the environment and let utilities shift my energy load so they can save money on peak-time power generation. But I’m not willing to do it for free and at the expense of having my clothes dry in time for work.