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When we think about quickly growing categories in the HVAC business, we might initially think about heat pumps – however, it appears that smart home technology is growing more quickly.

According to Research and Markets, in 2017, the global smart home market was valued at nearly US $40 billion and is expected to reach a value of approximately $160 billion by 2023, growing about of 25% each year from 2018-2023. Smart thermostats alone are expected to increase from $2.38 billion in 2018 to $9.55 billion in 2022, according to research company Statista. Europe and North America are expected to enjoy the fastest expansion among regions.

SmartHomeUSA says a smart home is “a residence that has appliances, lighting, heating, air conditioning, TVs, computers, entertainment audio & video systems, security, and camera systems that are capable of communicating with one another and can be controlled remotely by a time schedule, from any room in the home, as well as remotely from any location in the world by phone or internet.”

Writing in ACHR News in December Herb Woerpelnoted that HVACR technicians have a leg up on the competition in the smart home sector. He says: “HVACR technicians are among the chosen few service professionals who are welcomed inside their customers’ homes. Such relationships offer technicians a distinct advantage when it comes to offering new products and services, such as smart home upgrades.”

He tells the story of Magic Touch Mechanical, in Mesa, Arizona, which took deliberate aim at the smart home market. The company’s president Rich Morgan says: “We’ve seen steady growth year over year in both smart home products and home-performance improvements, and the margins are higher in both than they are in HVAC…There’s no doubt in my mind that HVAC companies need to be in the ‘whole home’ and ‘smart home’ space…We have an edge over other industries that lack the HVAC expertise to offer a complete solution.”

He mentions smart thermostats, leak and water detectors, motion detectors, smart doorbells and security cameras, wireless keypads, fobs, dimmers, smoke/carbon monoxide detectors. “We can tie in the smoke detectors with the HVAC system, so, for example, if the smoke detector gets tripped, it can send a message using Zigbee to our mesh system to turn the a/c off, which helps to keep the fire under control and doesn’t feed the flame.”

The main customer issues and obstacles are cost, data and digital security, interoperability between devices, and general complexity within the smart home conversation. Says McKinsey: “One obstacle is the sheer complexity of the value proposition that needs to be communicated to customers.”

In other words, to succeed in a category with new products and systems being introduced every week, and some quickly becoming obsolete, you have to know your stuff, and you also have to be able to keep it simple for customers.

As often happens during market disruptions, the big entities have been fighting to create the ultimate platform that ensures their success. It has led to problems with industry standards and interoperability. Manufacturing leaders talk about solving it, and have created co-operative organizations to address compatibility issues, but ultimately the marketplace decides.

Writing on electronicproducts.com, Cees Links, GM of Qorvo’s Wireless Connectivity Business Unit notes that, for wireless communications, most product developers are now working with Wi-Fi, Bluetooth and Zigbee. He suggests these will be the main three communication technologies going forward, and makes the case that Zigbee holds a lot of promise, but notes that each has its individual strengths.

Research and markets says that “the primary aim is to make living more comfortable, convenient, secure, entertaining and sustainable. Powered by gadgets and computing technologies, smart homes were the prerogative of the very rich in the past – but no more.”

“With technological advances in voice control and artificial intelligence, the intelligent assistant is now a viable control center for the connected home…The supply of mobile entities, the improvement of wireless Internet, the emergence of cloud services, the sophistication of low-energy high-performance technologies…have opened a new era for smart home technology.”

Modern HVAC companies would probably do well to consider whether they should learn more about, and take more advantage of the opportunities in the smart home category of our business. It could become a great new revenue stream.

Smart technologies of course, are not confined to residential market. For HVAC professionals focusing on the commercial market, intelligent building automation is a considerably more advanced sector. The HRAI eNewsletter will take a closer look at contemporary building automation in a future spotlight.