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What Google's Pulling the Plug on PowerMeter Means for the Market

<p>Google will retire its home energy management tool in mid-September in the wake of slow adoption; but forecasters still predict significant growth for the market.</p>

A slew of tech companies entered the home energy management business in recent years with products aimed at helping consumers manage and reduce their energy use.

The market is apparently a tough nut to crack, causing one of the industry's most well-known players to walk away. Google will retire its PowerMeter on September 16, two-and-a-half years after its launch, the company said last week.

Google's announcement comes just a few months after Microsoft revealed that slow adoption of its own home energy management product has led the company to shift its efforts to commercial buildings.

"We're pleased that PowerMeter has helped demonstrate the importance of this access and created something of a model," Google's Energy Czar, Bill Wiehl, said on the official Google blog last Friday. "However, our efforts have not scaled as quickly as we would like, so we are retiring the service."

Google and Microsoft were joined in the increasingly crowded home energy management space by Apple, Panasonic, Intel and Cisco, among others. And although the two tech giants' plans have changed, there are signs that the market is still picking up momentum.

Just last week, GE announced it would team with Best Buy to bring quickly to its shelves one product that reduces the voltage of electricity into homes, and another that controls air conditioning according to room temperature and occupancy.

The products are designed to helping consumers track and trim their energy consumption, often by giving them an understanding of their use. The question is, according to Pike Research's Bob Gohn, are consumers saying they care?

"I think the jury is still out on that," Gohn said.

He pointed to several factors that are needed to ramp up adoption of home energy management products.

"It's going to take a combination of availability, awareness on the part of consumers, technology that’s simple and easy to use, and some mix of societal pressure and price pressure."

The home energy management sector has for years been "a zero-billion-dollar market," Gohn said. "There was never quite the fire-to-straw acceleration you might expect."

That, however, was beginning to change, he said, pointing to the big deployment of smart meters throughout the U.S., particularly in Texas and California. Utilities across the country were beginning to raise awareness around home energy management by sharing energy use data with customers.

But it is also going to take time to build the smart grid infrastructure.

"Maybe what was missing most was patience," he said of Google's decision to pull the plug on the PowerMeter.

Pike recently released a research report downgrading its prediction that there would be 13 million home energy management systems worldwide by 2015, compared to earlier estimates of 28 million. The change is largely due to a slower than expected adoption of home energy management programs by utilities, but by 2020, Pike expects the figure to swell to 63 million.

"For all the pessimism around this," Gohn said, "we're still pretty bullish on the adoption of these types of technologies."

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