Connected Homes: The Next Network Frontier

“We are seeing greater interest from the service providers — a little more on the [cable] side than on the telecom side,” said Mark Walters, head of the Z-Wave Alliance.

That interest is growing as consumer interest grows, particularly in remote energy management, Walters said. Consumers are looking to both control the skyrocketing costs of energy and to be more environmentally friendly.

“The first thing consumers want to touch is the thermostat,” Walters said. “It's not a luxury; it's not security or an additional service — it's a way to cut their energy bills so there's an immediate payback.”

Demand-side management likely will become even more important if the next presidential administration brings the U.S. under the Kyoto Treaty, said Robert Rosenberg, president of Insight Research.

“We are going to adopt non-voluntary standards for energy reduction, and two major places that has to take place is in the home and in the workplace,” said Rosenberg, who authored Communicating Green: Telecommunications Value in Promoting Environmental Improvement, 2008-2013, which documents a multitrillion-dollar market in energy management services and technology. “New metering standards would facilitate a much smarter use of our energy,” he said.

The technology exists today to tie thermostats into a home's broadband network, along with HVAC systems, lights and other energy-consuming appliances. Consumers then could use a Web portal on a PC or a smartphone to turn lights on or off, set or change the thermostat, monitor in-home environmental conditions and more.

Getting started is as easy as buying a Z-Wave-enabled gateway, which starts at about $189, and a Z-Wave-enabled thermostat, which can cost as little as $89, Walters said. “We're not talking a humongous amount of money, and they can save $300 to $400 a year,” he said. “The payback, even if the homeowner has to pony up the cost of 100% of the hardware, is pretty quick.”

Consumers and businesses could well receive financial incentive to reduce their energy consumption in the form of carbon credits, Rosenberg said. “All this stuff, this mitigation of the environmental footprint, is going to come down to a financial equation: If you meet your goals, you make money and you don't have to buy more energy,” he said. “This is what is happening in countries that have signed the Kyoto Treaty, and the U.S. is going to be coming on board.”

Beyond energy management, networked Web cams and sensors can be used to provide home security systems, nanny-cams or even elder care.