A new report from research and consulting firm Zpryme describes the growing field of smart appliances as a tremendous market opportunity. It estimates that the global household smart appliance market will grow from $3.06 billion to $15.12 billion over the next five years. In 2015, the global market size for smart washers and smart refrigerators will reach $3.54 billion and $2.69 billion, respectively.
Surfing on the tsunami-sized wave of government investment that is subsidizing the development of the Smart Grid, both here and abroad–and particularly in China–a few forward-looking appliance makers are positioning themselves ahead of what some say will be a flood of smart appliances.
What exactly are smart appliances? After all, ever since the first microprocessors came out, home appliances have been getting smarter, providing more and more convenience and efficiency. All of the major brands have been churning out smart appliances one after another. But these new smart appliances are different: their enhanced value lies in the way that they are inextricably bound to the Smart Grid. According to the Association of Home Appliance Manufacturers (AHAM), the designation smart appliance refers to a modernization of the electricity usage control system of a home appliance so that it monitors, protects and automatically adjusts its operation to the needs of its owner.
AHAM lists the following six key features that distinguish smart appliances:
- Dynamic electricity pricing information is delivered to the user
- It can respond to utility signals
- Integrity of its operation is maintained while automatically adjusting its operation to respond to emergency power situations and help prevent brown or blackouts
- The consumer can override all previously programmed selections or instructions from the Smart Grid, while ensuring the appliance‘s safety functions remain active
- When connected through a Home Area Network and/or controlled via a Home Energy Management system, smart appliances allow for a total home energy usage approach. This enables the consumer to develop their own energy usage profile and use the data according to how it best benefits them
- It incorporates features to target renewable energy by allowing for the shifting of power usage to an optimal time for renewable energy generation, i.e., when the wind is blowing or sun is shining.
All sounds great, but what exactly will these things do? How about a stove or a dryer or a toaster that reduces its heat output during periods of peak demand? This will cause the toast or the soup or the towels to take a little longer to finish, but it will be better for the planet and the wallet. In the case of a washer or a dishwasher, it could mean postponing the cycle until later in the evening, when demand has gone down. In other words, smart appliances will scrutinize, synchronize and economize.
All of this will require a certain amount of patience and flexibility on the part of consumers but it should help manage costs and provide a number of environmental benefits such as the enhanced use of renewables as noted above and the reduced use of peaking plants which tend to be both dirtier and more expensive than most other forms of power generation.
Here in the US, we are projected to dominate the household smart appliance market next year, accounting for 46.6 percent ($1.43 billion) of the global market. By 2015 though, the US market share is projected to decrease to 36.0 percent ($5.46 billion) of the fast-growing global household smart appliance market.
Meanwhile, China is expected to follow the US with a market share of 11.6 percent ($355 million) next year. In 2015, China is projected to account for 18.2 percent ($2.76 billion) of the global household smart appliance market. This vigorous growth is expected to be driven by pricing, environment, energy efficiency, Smart Grid build-out, and government subsidies. These numbers are on the consumption side. As to who will be producing these smart appliances, that remains to be seen. The key players at this point are GE and Whirlpool who have both moved aggressively into this technology space, with help from companies like Tendril and Trilliant on the connectivity side of things. GE launched its first smart hybrid water heater last fall, which they say will reduce energy consumption by around 15%.
According to the Zpryme, there is still plenty of room for more players in this rapidly expanding market.
The substantial amount of federal incentives certainly doesn’t hurt either. It’s worth noting that while China leads in total smart grid stimulus funding with $7.3 billion, the US is a close second with $7.2 billion.
Now all that remains to be seen is whether consumers will appreciate the benefits in these devices, which will certainly command premium prices, or are the manufacturers counting on government incentives to smooth the way?
What’s amazing about it, is that when all of this is operational, it will work automatically, often without our knowledge. These appliances will be like instruments in an orchestra, scattered in thousands of homes throughout our communities, and will follow the direction of an electronic conductor, who, in turn, will be carefully watching the energy that we as a community consume. If you like the idea of saving energy, then this could be music to your ears.