The Mainstreaming of Home Automation
Posted in: July 2014
It’s no surprise that the U.S. home automation market has been growing steadily in the past five years, from $3.2 billion in 2010 to a projected $5.5 billion in 2016, according to BBC Research. In 2010, most of that market (58 percent) was made up of components electrical contractors install regularly, such as lighting, home entertainment, and security systems. That makes it a promising niche for contractors eager for new revenue streams.
Research at Dallas, Texas-based Parks Associates confirms those upward trends. One study showed that nearly 40 percent of U.S. households with broadband are interested in purchasing energy management products. Approximately 66 percent find a smart home bundled package appealing. These packages can include a variety of home safety, security, and management offerings. The most attractive bundle is home management, which includes safety alerts, remote home monitoring, and remote management of the home’s thermostat. Among U.S. broadband households, 56 percent also would buy door and window sensors, 53 percent would buy door locks, and 44 percent would purchase lighting control modules, provided they could control these devices using a PC, phone, or tablet.
“You’ve heard the term ‘the Internet of things,’” says Glen Hill, owner of Current Concepts, a home automation and A/V installer in Coopersburg, Pennsylvania. “In five more years we’ll see washing machines, dishwashers, projectors, and HVAC being connected to the Internet. It will drive everything that’s being invented nowadays.” His company designs and programs electronic systems and partners with electricians to install the controls. “We know where each other’s expertise starts and stops,” he says of electricians. “Professional automation designers are no longer equipment guys; we’re IT guys.”
Home automation services represent about 10 percent of Bashore Electric’s work in Orefield, Pennsylvania—a figure owner Chuck Bashore expects to tick up as the housing market strengthens. His typical installations involve security lighting for a house’s exterior, interior scene lighting, and keypads that eliminate switch clutter. “It’s usually a higher-end home getting this type of system, although we do have average homes wanting security lighting,” he says. The sweet spot for a basic system is $5,000 to $7,000, he adds, and the upper end can go far beyond that range.
Two factors contributing to this growing market segment are the interest in safety and security and the popularity of wireless automation, the BBC report said. The use of smartphones and other app-enabled devices is encouraging more people to automate their homes. Growth in the adoption rate for Internet-connected thermostats, for example, rose to 11 percent in the last quarter of 2013, up from 4 percent a year earlier, according to Parks Associates research. Retailers such as The Home Depot now source these new and ever-changing products. Homedepot.com offers more than 600 items under its home automation category, such as Nest thermostats, Nest smoke and carbon monoxide detectors, and Wi-Fi-enabled Honeywell thermostats. Another popular item is the app-enabled Chamberlain garage door opener, which makes even old doors smart. “I leave home early in the morning, and as many times I’ve had to turn around to make sure I shut the garage door,” says Home Depot senior merchant Randy Light. “This device solves that problem.”
Dimmers have been around for 20 years, but Lutron dimmers now have radio frequency technology that allows them to work with other products and be operated by smartphone. “We want to give people the opportunity to create scenes across products that aren’t related,” Light says. “Maybe the vestibule lights go on when the garage door opens, and the doors lock or unlock.” Kwikset and Schlage offer smart door locks. And Phillips’ new Hue lightbulb can be programmed by phone to change color or turn on and off, giving the illusion that someone is home.
Other new security items include the DropCam Pro, a Wi-Fi-enabled camera that links to a phone, and Spotter, a Quirky + GE smart sensor that pushes alerts to a phone. This nifty watchdog “can sense sound, vibration, light, moisture, and temperature,” Light says. “We’ve found a multitude of different uses among our customers.” He put the device in his mailbox, so he knows when the mail is delivered. Others have used it to determine when the washer stops, when a door opens, or to monitor air temperature and humidity in a wine cellar.
In Austin, Texas, Bowne Electric’s sales of whole-home lighting automation with Lutron grew 57 percent over the last year, compared with a 30 percent overall bump in revenue. “There’s a lot of growth in Austin because of the high-tech industry, but a lot of people come here for its cultural scene and the climate,” says owner Bob Bowne. “Many of these folks have full-fledged second homes and want security with cameras and lighting automation because that’s what they’re used to.” A 10,000-square-foot, fully automated house can turn into a $70,000 to $100,000 job, he says.
No matter what the price point is, being able to offer home automation solutions can help foster long-term customer relationships. “This is a service electricians can offer that they couldn’t a few years ago,” Light says. “For some homeowners, pulling wires is very intimidating. A certified electrician is always the way to go.”
Cheryl Weber is a freelance writer specializing in the built and natural environments. She has written for Residential Architect, Architect, Custom Home Outdoors, The Washington Post, Remodeling, Builder, Washington Home & Design, and other publications.