The Next Booming Building Business: Energy Monitoring and Controls0

Jeremy Faludi | Wed Aug 31 2011

Architects or construction workers aren’t the only people who build things. Programmers and electrical engineers are spearheading the latest trend in smart design, energy monitoring and automation—design innovations that can make radical improvements in how businesses and homeowners save energy.

Studies have found that simply showing a homeowner in real-time how much energy their house uses can cut energy consumption by 20 percent or more. Several companies go further and design their reports dashboards using game psychology, including emoticons, comparisons to neighbors or social media friends, and context-sensitive suggestions to help users reduce energy use.

Sometimes automation can provide greater savings than relying on people’s behavior. More than one company promises a 60 percent or more reduction in lighting energy from their brightness and occupancy sensors driving automated dimming or shutoff. And that’s not even mentioning smarter thermostats and other HVAC controls.

Building energy monitoring and controls is not new

Companies like Johnson Controls and Honeywell have done it in some form for over half a century. But systems have historically been expensive and required experts to operate. It’s an information-based industry, though, and all such industries are in some way driven by Moore’s Law, driving the cost of information towards zero.

Eventually such systems will be as common in buildings as WiFi is today.

When cost falls below a certain threshold, it transforms an industry—a smart phone today is nothing like a telephone of thirty years ago—and Apple now makes more money from iPhones than from traditional computer sales.

The old standards now have to compete with new players—some of them freshly-sprouted startups like People Power and Adura, some of them giants from other industries like Cisco and Intel. In the past few years, literally hundreds of companies have stepped into the field, from the industrial scale to the single-family home. Overall, the industry is growing, and eventually such systems will be as common in buildings as WiFi is today.

The race for first place

In this flurry of activity, there’s a lot of innovation, but the building-automation equivalent of the iPhone has yet to emerge. Most offerings are still too expensive and too awkward. And after spending tens of thousands of dollars on a system, and conversing with technical support for weeks, you may still have to do your own troubleshooting.

The biggest hurdle to most players is systems integration. These are not stand-alone products, they are ecosystems of sensors (and sometimes actuators), data handling and communication devices, and presentation/analysis services to turn data into actionable knowledge.

Good integration means a thermostat can not only turn HVAC components on and off, but also close window shades or perform other automated tasks, which can help a consumer save energy and money. This is possible now, but it’s not plug-and-play; it’s engineering.

The first company that can design a clear and pleasant user experience of ordering, installing, and managing one’s own system, rather than relying on expensive experts, will make a killing.

Energy monitoring isn’t cheap

Software usually costs thousands of dollars, even for a small building. A temperature sensor with calibrated digital output often costs over $100, rather than the $1 the uncalibrated analog hardware costs.

It can cost over $2,000 for a gas line sensor.

It depends what you’re measuring, too. It can cost under $200 for an electric circuit sensor, but over $2,000 for a gas line sensor; both are important, since only about half of building site energy use is electricity. System installation can be tens of thousands of dollars.

There are ways around these costs, though. Systems can be designed to require less skill for installation. Gas flow can be measured indirectly by measuring when electricity to a furnace is on. Arduino boards can provide cheap analog-digital conversion. Open-source software can be free. And these are just a few examples.

Watch this space

People are chipping away at these problems, and it’s exciting how much activity there is in building monitoring and controls. Systems are improving, and prices are falling. There’s still plenty of room for game-changing technology and design, but we’re clearly headed into a world where smarter buildings save huge amounts of energy.

Illustration by Andrew Holder