CE Pro March 2023 - 4

From the Editor
by Jason Knott
Are Utilities Lining Up
to Buy Integrators?
Local utilities
that remotely
adjusted their
customers' smart
thermostats,
water heaters
and HVAC
systems
were able to
reduce energy
consumption by
44% overall and
by 34% during
peak demand
times!
It was big news in December when giant
utility company NRG Energy shelled out
a whopping $2.8 billion to acquire Vivint
Smart Home, the No. 2 company in the CE
Pro 100. On the surface, my initial thought
was that NRG simply wants to boost its
recurring monthly revenues by security monitoring
services to its 5.4 million customers.
Of course, that is certainly low-hanging fruit
for NRG's revenue expansion, but this acquisition
goes much deeper than just feeding a
security-based recurring revenue machine.
I believe the move is really more about the
future role the smart home plays in saving
the entire nationwide energy grid from collapse...
literally. It's no secret the power grid
is at the breaking point. Rolling blackouts are
becoming more common. Consumer demand
for electricity is growing, and it will continue
to grow. The strains on the grid for smart
home technology, EV charging stations, and
even the recent crazy idea floated to mandate
electric stoves are all tidal waves driving
power usage up and up.
Where is the necessary electricity going to
come from? New coal-burning/fossil fueldriven
power plants? Not a chance. New
nuclear power plants? No. New hydroelectric
dams? Nope. Giant solar farms, wind farms
and ocean wave generators? Perhaps, but
it's unlikely those sources can produce the
necessary power we will need unless the
government decides to buy half the state
of Nevada to convert it a giant solar field.
(Hmm... that's an interesting idea.)
So, in the meantime, what's the solution
Jason Knott is editor
of CE Pro. He can be
reached at jason.knott@
emeraldx.com and
@JasonWKnott
to this power crisis if you are a utility company
like NRG, which has a publicly stated
goal of being net neutral by 2050? NRG has
to find a way to have its customers use less
power to preserve the grid. Voilà - the
smart home and the custom electronics
industry are the answer.
Instead of needing to generate more elec4
| CE Pro March 2023
tricity during times of peak demand, utilities
like NRG will be able to analyze the usage
data of their customers using Vivint's capabilities
and then act on that data to reduce
demand with the client's approval. The utility
can lower the temperature on a homeowner's
network thermostat or set the time for
when the EV charging station or dishwasher
kick on to avoid peak demand.
Indeed, even if only a portion of NRG's
and Vivint's customers agree to let the utility
adjust their demand, it will make a difference.
How much of a difference? According
to a 2020 technical report from the U.S.
Department of Energy's Office of Scientific
and Technical Information, researchers at
Oak Ridge National Laboratory compared
two different approaches by local Alabama
utilities that remotely adjusted their customers'
smart thermostats, water heaters and
HVAC systems in a particular neighborhood.
Remarkably, the utilities were able to reduce
energy consumption by 44% overall and by
34% during peak demand times!
If impressive results like those can be
repeated on a widespread basis, utility companies
will be lining up to partner with or
acquire smart home integration companies.
This NRG buyout of Vivint could be just the
first salvo from utility companies as they leap
into the smart home business.
We've seen largely failed attempts by utilities
such as Ameritech and Southern California
Edison to expand into the traditional
home security business, but the broader
smart home market landscape is drastically
different today.
The silver lining from this looming energy
crisis is that it just might have made your
custom integration company a very attractive
target for acquisition. If you have any sort of
exit strategy in mind, it might be time to put
some energy behind the power management
portion of your business.
cepro.com
http://www.cepro.com
CE Pro March 2023

Table of Contents for the Digital Edition of CE Pro March 2023
