How Can Policymakers Increase the Adoption of Smart Home Technologies?

Smart homes are a critical component of the developing smart energy grid. Smart home technologies make it easier for homeowners to reduce their energy consumption, and these features alleviate stress on the grid during periods of high electricity demand. As such, the adoption of smart home technologies has become a growing priority for national energy policy and planning. Smart home technologies are internet-connected devices that enable consumers to monitor and control appliances and systems such as heating and lighting. These technologies provide a myriad of benefits, including energy, time and cost savings. Despite high and growing levels of market demand for smart home technologies, including a projected $26 billion market for smart appliances this year, adoption rates have been limited to-date. According to market research, the primary barriers to market adoption are high upfront investment costs, a lack of product understanding, and data privacy concerns among consumers. Moving forward, addressing these challenges will require increasing public awareness and knowledge of the benefits and risks of smart home technologies.

In a recent paper published in the journal Energy Policy, researchers at the Tyndall Centre for Climate Change Research and the 3S Group in the School of Environmental Sciences at the University of East Anglia examined the potential market for smart home technologies and provided policy recommendations for accelerating market growth. The study focused on the perceived benefits and risks of smart home systems from several perspectives, including those of potential consumers, early technology adopters and industry stakeholders. The paper included an analysis of a national market survey of 1,025 U.K. homeowners and a survey of early technology adopters, as well as a content review of industry marketing materials.

The results of the U.K. national survey indicated that a majority of prospective smart home technology users perceived multiple benefits of use, including enhanced energy management, improved security and better control of domestic activities. As for risks, fear of loss of control in the home to smart home technologies outranked data and privacy concerns among prospective users. Notably, the survey results did not clearly identify the impact of smart home technologies on overall home energy usage. In the absence of policy mechanisms specifically designed to encourage energy-efficient behavior, mass adoption of smart home technology may not actually translate to significant energy savings. To address this issue, the researchers recommended policy interventions such as hardware and software design guidelines and standards that prevent manufacturers from overstating energy and cost savings. In addition, they encouraged policymakers to partner with industry stakeholders to develop best practice guidelines for installations in order to lessen perceived risks and increase consumer confidence in smart home technologies.

A survey of 42 early adopters participating in a smart home technology field trial demonstrated that other prospective consumers perceived smart systems as less risky when they were aware of the early adopters. The results reinforced the need for policy interventions focused on strengthening consumer confidence, such as quality control standards and training for installation contractors. The survey results also revealed similarities between the socio-demographic characteristics of those who were early to adopt two types of technologies: smart homes and information communication systems. These trends highlighted the potential for smart home technology adoption to further increase the digital divide between early and late adopters. To address this risk, the paper recommended the creation of grant and incentive programs focused on enabling older, low-income and rural households to adopt smart home technologies, potentially saving on their energy bills in the process.

Finally, the paper identified the need for industry marketing materials to better address the perceived risks of smart home technologies. The researchers found that industry stakeholders need to incorporate privacy and security topics more broadly into their communications. The messages reaching consumers today are failing to address genuine concerns about the risks that smart home technologies may pose.

Ultimately, policymakers can play a significant role in accelerating the adoption and decreasing the real and perceived risks of smart home technologies. Major opportunities to support market growth exist through the development of design and operating guidelines, data privacy and security standards, and installation and quality control procedures. Moreover, policymakers can and should leverage lessons learned from previous energy efficiency technology roll-outs—such as marketing and consumer engagement campaigns for smart meters—to increase the effectiveness of these programs.

Article source: Wilson, Charlie, Tom Hargreaves, and Richard Hauxwell-Baldwin. “Benefits and risks of smart home technologies.” Energy Policy 103, (2017): 72-83.

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