Programmable Thermostats May Get Hot

Why write about a $249 programmable thermostat? Because it just may be the device that finally engages the public in the idea that energy can be more than a commodity and that they can become active in managing their energy use. The smart, attractive, interactive thermostat from Nest Labs could turn out to be the switch that turns the smart utility on for the average consumer.

With the proliferation of smartphones, tablets and voice-activated information systems in our cars,  we’ve become inured to the concept of smart devices, but the term is worth considering. Essentially, a smart device is one that responds to us — a gadget with which we carry on a dialogue. In a weird way, it humanizes inert objects so that they begin to take on personalities that we can relate to.

The Nest thermostat is such a device. When you turn it up or down, it remembers the temperature you’ve set and when you set it. It learns how long it takes your house to reach the temperature you like, so if you set it to 68  degrees at 7 in the morning, and it takes 15 minutes to reach that temperature, Nest starts the furnace at 6:45 a.m. It takes note of when you’re home, when you’re away, and when you usually return so that it can turn down the heat or cooling when you’re out and get your home to the right temperature just before you return.

Although you can, you don’t really have to program the Nest thermostat, since over the period of a week or two it learns your domestic routine and adjusts itself accordingly. If, however, you alter that routine, you can always call home, from a smartphone or tablet, and tell Nest to turn the heat up or down, so that you arrive home to a house at just the right temperature.

The founders are Tony Fadell, who led the team at Apple that created the first 18 generations of the iPod and the first three generations of the iPhone, and Matt Rogers, who was responsible for developing the iPhone’s software. The company’s vice president for technology, Yoky Matsuoka, won a MacArthur “genius” award for her work in robotics and neuroscience. As Matt Rogers put it, “Our DNA is very different. We’re a consumer company with a lot of really deep technology and user experience roots that are very hard to reproduce.”

Rogers noted that half of home energy use is for heating and cooling, a fact that would certainly engage most homeowners if you could just grab their attention — precisely what Nest is designed to do. 

“This significant use of energy has been controlled for decades by old technology in white plastic boxes,” Rogers noted. “We started the company with the express purpose of revolutionizing something people had long taken for granted and come to ignore. We knew we could add connectivity, intelligence, beautiful design and algorithms to transform what was invisible into something incredibly new. We knew we could add a ton of value and build a great consumer experience that would help people save a lot on their energy use.”

When Nest launched in the fall of 2011 it sold out almost immediately. Over the next couple of months, Nest Labs scrambled to build supply and a network of retailers, including such consumer destinations as Best Buy, Lowes, Apple and Amazon. At the same time, Nest Labs looked for energy providers with which to partner. Focusing on deregulated markets, the company chose Reliant, one of the dominant players in Texas.

Bill Harmon, Reliant’s vice president of residential segment marketing, sees the Texas energy market as analogous to the cellphone market, with various providers competing for customers. Reliant thought a free Nest could be for the energy provider what a free or nearly free iPhone is to cell service companies: the lure to attract customers to sign long-term contracts.

Harmon sees the program with Nest as key to moving customers from passive users of electricity to active participants in managing their power usage. That’s essential if utilities are to reap the advantages provided by smart grid technology.

Nest Labs estimates its thermostat can lower usage by about 20 percent for the average homeowner. That’s a real incentive for customers to become involved. Harmon estimates that almost 700,000 of the company’s 1.5 million customers are now enrolled in at least one of its smart energy products and services.

Nest comes on the  scene at a critical time, when the concept of the smart grid is coming into its own and utilities all over the country are implementing smart meters. Harmon believes we’ll see a tipping point over the next five to 10 years, when home energy management solutions will expand beyond the HVAC system to include lighting, smart appliances, the next advance in distributed generation and load shifting.

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