HOME AUTOMATION and smart grid technology can help balance the electric load on the grid, making integration of intermittent renewable energy sources more achievable. This could lead to long-term benefits, such as reduced cost and environmental damage. In many countries around the world smart city trials are taking place, experimenting with the use of smart grid technology in conjunction with electric vehicles, solar panels, and a wide range of smart home devices. The American market will have the second-largest installed base of demand response-enabled smart home energy devices, until the region is overtaken by the Asia Pacific market in 2025. The United States accounts for most of this region, and in recent years the country has made large-scale investment in smart grid and smart metering solutions. In addition utility companies in several states are starting to offer time-of-use pricing and other demand response-enabled consumer incentives. In fact, many utilities around the world are starting to engage with the smart home energy management device market, by offering free or subsidized installation of various smart home devices on certain contracts or tariffs. This trend is not only driving the uptake of demand response- enabled smart home energy management devices – the global installed base for smart thermostats was the second-largest after IHDs, at 21.4 million by 2025 – but will play a significant part in the evolution of the smart home. The need to create a simple and reliable smart home user experience is a key factor in the future of the industry. The market is still fragmented, with issues around connectivity protocols and interoperability of products presenting major barriers to market growth. Consumer entry point is a key factor: initially consumers entered the market by purchasing entire integrated systems for their home at significant cost, however, now people are increasingly likely to enter the smart home market through the purchase of a single product or solution, such as a smart thermostat, which they may then choose to supplement with additional products. This gradual entry point is where the interoperability challenge comes into play. Smart meters and subsidized smart thermostats and IHDs are only one piece of the puzzle. The next step for the smart home market is to develop the ecosystem, so that consumers can benefit from the full potential of their connected devices at home. MI ABOUT THE AUTHORS: Roz Euan-Smith is a senior analyst within IHS Technology, whose research focuses on Smart Homes and Smart Cities. Recent projects include a worldwide study of the smart home energy management devices market and analysis of the potential of residential demand response. Jacob Pereira is an IHS analyst specializing in utility meters, grid infrastructure, distribution automation and smart communications. He is a member of the IHS Power & Energy team which has published syndicated, primary research reports across the utilities vertical for more than fifteen years. Model:ME3610 PID:V1A LTE Module SKU: XXXXXXXXX MEID: 125A012000010000 S/N: D12450100000000 FCC ID: Q78-ME3610 ZTE CORPORATION MADE IN CHINA