lable at ScienceDirect

Energy 60 (2013) 361e372

Contents lists avai

Energy

journal homepage: www.elsevier .com/locate/energy

The development of smart homes market in the UK

Nazmiye Balta-Ozkan a,*, Rosemary Davidson b, Martha Bicket a, Lorraine Whitmarsh c

a Policy Studies Institute at the University of Westminster, 50 Hanson Street, London W1W 6UP, UKbHealth Services Research, School of Health Sciences, City University London, Northampton Square, London EC1V OHB, UKcCardiff University, School of Psychology, Tower Building, 70 Park Place, Cardiff CF10 3AT, UK

a r t i c l e i n f o

Article history:Received 12 March 2013Received in revised form19 July 2013Accepted 4 August 2013Available online 5 September 2013

Keywords:Smart homeDriverBarrierPublic workshopExpert interview

* Corresponding author. Tel.: þ44 207 911 7537; faE-mail address: n.ozkan@psi.org.uk (N. Balta-Ozka

0360-5442/$ e see front matter � 2013 Elsevier Ltd.http://dx.doi.org/10.1016/j.energy.2013.08.004

a b s t r a c t

Smart homes will be a key component of smart grids as without them the functionalities and capabilitiesoffered at network level will not be realised fully by householders. Yet an extensive body of literaturefocuses on energy consumption and management services via various demand side management pro-grammes and informs us of a significant variation in the realisation of these benefits to reduce demand.However services which can be enabled via smart technology are much broader than simply energyconsumption and management, spanning from assisted living to security to remote monitoring, controland management of appliances and devices. Using a combination of in-depth deliberative publicworkshops, expert interviews and a review of the existing literature, this paper gives an overview ofservices that smart homes can offer and reveals key barriers to smart home adoption such as interop-erability, deregulated electricity supply industry, UK housing stock characteristics, tenure as well asreliability, security, and cost of smart technologies. The findings indicate a need for a holistic view for thedesign and delivery of smart home services so that consumers are offered integrated services acrossenergy consumption and management to air quality management to security, allowing for individual ortailored services for householders.

� 2013 Elsevier Ltd. All rights reserved.

1. Introduction

Smart homes will be a key component of smart grids, as withoutthem the functionalities and capabilities offered at network levelwill not be realised fully by householders. An extensive body ofliterature (the so-called ‘demand side response’) details how directand indirect feedback on energy use help householders’ reducetheir energy demand, contributing further to lower energy bills,security of energy supply and reduction of carbon emissions.However, demand side response programmes focussing onbehaviour have a varying degree of success (5%e15%) [1] and effi-cacy. Yet, there is an additional element of energy demand reduc-tion that has not been exploited yet. Homes can provide a means ofshifting and reducing energy demand independent of the need forbehaviour change. We argue that compared to today’s home whichhas appliances that are operated locally and manually, usually byflipping a switch or pushing a button, smart homes can fulfil thisrole. Smart homes, through their network of intelligent techno-logical devices, will allow householders to control and managetheir energy use more efficiently whilst increasing their comfort

x: þ44 207 911 7501.n).

All rights reserved.

and convenience for a variety of household activities, from spaceheating (via thermostat settings adjusting automatically to actualweather temperature) to water heating (via providing hot water ata required temperature instantaneously) to lighting (via lightsswitching off automatically as the occupants leave a room) as wellas getting the best value from generating their own energy (viasolar panels on the roof) and changing their energy loads (via smartappliances’ responding to grid constraints either to ease congestionat local level or to contribute to national balancing) through real-time communication with the grid. Beyond energy systems (bothelectricity and heat), smart homes can also communicate withother smart systems like transport (via turning heating on once acar GPS (global positioning system) signals that householders arewithin a reasonable distance from home) or health (via pressuresensor on the floor detecting the fall of the householders andalerting the carer) or security (via programming of random roomlighting patterns to deter thieves whilst away from the property),paving the way for smart cities.

Whilst the interdependencies between different energy systemsin smart grids are well documented (among others [2]), an exten-sive body of literature focuses on the development of tools andmethods at the interface between the network and households,including optimal load management strategy [3e6]; predicting

Fig. 1. Types of smart home services.

N. Balta-Ozkan et al. / Energy 60 (2013) 361e372362

next day electricity consumption in homes [7]; embedding solarand storage energy in smart homes [8]; and smart home system(automatic) computation and execution of energy control strate-gies, including integration with smart grid applications [9].

This increasing focus on smart homes and smart grids can beexplained by policy objectives encouraging or mandating energyefficiency and climate change objectives at both the national andthe European level, as well as advancements in communicationtechnologies such as high-speed Internet and wireless devices.Correspondingly, there are a wide range of initiatives and researchprogrammes that are being taken by the European Commission atgrid and city level (for recent review articles, among others see Refs.[10e12] whilst [13,14] focus on market and regulatory challenges).Nonetheless, despite smart homes (and other smart technology,such as smart grids) being present as concepts for many years, theirexisting applications are limited to a few bespoke homes. Over adecade ago, researchers identified interoperability; administration;reliability; systems intelligence and behaviour inference; and se-curity as key barriers facing the smart home industry [15]. Overtime, technological advancements have helped to overcome certaintechnical concerns but retrofitting existing homes, interoperability,costs and usability still remain key challenges [16]. Withoutundermining the importance of these factors, we argue that there isyet another fundamental problem concerning the siloing of smarthome services e the treatment of different types of smart homeservices (e.g., assisted living; energy management; entertainment)as distinct sectors, developed by different vendors, with poor cross-fertilisation of practices and innovations. Ultimately, from ahouseholder perspective, the home is an expression of identity [17]and, as such, a smart home’s technology and services should bewellintegrated into the design, lifestyle and general sense of home [18].

Using expert interviews and public deliberative workshops, theaim of this paper is to articulate the technical, economic, com-mercial and policy factors affecting the development of the smarthome market in the UK. We begin by taking a holistic approach tosmart home services (avoiding the ‘silos’ problem), with a view todrawing out conclusions for energy consumption and managementservices. As social barriers are discussed elsewhere [19], they arenot included here. The study contributes to the literature bygrounding, comparing and contrasting technical, economic, com-mercial and policy barriers highlighted in the literature to thoseidentified through expert interviews and public workshops.

The paper is structured as follows: Section 2 reviews the liter-ature regarding the definition of smart homes and UK policy driversand barriers affecting the development of smart homes markets;Sections 3 and 4 outline the methodology and results, respectively,from the expert interviews and public deliberative workshops; andSection 5 is devoted to conclusions.

2. Background

Through a review of existing literature on the subject, this sec-tion sets out the context to this paper: providing a working defi-nition for the term ‘smart home’; identifying key infrastructurechoices; and outlining the UK policy and regulatory background.

2.1. Smart homes: definition and services

A smart home is a residence equipped with a communicationsnetwork, linking sensors, domestic appliances, and other electronicand electric devices, that can be remotely monitored, accessedor controlled [20], and which provide services that respond to theneeds of its inhabitants [21,22]. The term ‘smart home’ may, in prin-ciple, refer to any form of residence, for example, a standalone house,an apartment, or a unit in a social housing development. In this

definition, sensorsaredevicesused todetect the locationofpeopleandobjects, or to collect data about states (e.g., temperature, energyusage,open windows); domestic appliances refer to washing machines, re-frigerators etc.; electronic devices include phones, televisions, andlaptops; and electric devices refer to themore simple toasters, kettles,light bulbs etc. (e.g., programmable washing machines).

The network linking these various technological devices is cen-tral to the concept of the smart home [20,23]; the existence of thiscommunications network (or more commonly ‘home area network’,HAN [24]) connecting and coordinating the various technologicalcomponents and information, and through which one has the po-tential to operate or access all components from a remote location(whether this be inside from a central ‘hub’ or more remotely fromoutside the home) is what distinguishes the smart home from ahome merely equipped with standalone high-tech features [25].

Consequently, four key aspects characterise a smart home:

i) a communications network through which different devicestalk to each other;

ii) intelligent controls to manage the system;iii) sensors that collect information; andiv) smart features (e.g., intelligent heating systems adjusting

automatically to external temperature), which respond toinformation from sensors or user instructions [25] as well asthe system provider (e.g., remote control of appliances).

Types of services that smart homes provide to the householdersmay be categorised based on users’ needs they target [16] or types oftechnical applications [26]. A holistic approach reveals a broaderspectrum of services (see Ref. [19] for a review) such as security,assisted living, health, entertainment, communication, convenienceand comfort, and energy efficiency; which we group into threebroad, overarching yet interconnected categories (Fig. 1): energyconsumption and management; safety; and lifestyle support.

Among these services, energy consumption and managementservices will form the core of services supporting the developmentof smart grids.

2.2. Key infrastructure for smart homes

We began by adopting a definition for a smart home whichcentres on the notion of a network connecting sensors and do-mestic devices, appliances and features, and facilitating the ex-change of relevant information between these and the user. Thissection presents further findings of the literature review with

N. Balta-Ozkan et al. / Energy 60 (2013) 361e372 363

respect to key infrastructure required for the smart home, includingnew and existing homes.

2.2.1. The smart home networkThere are two principal elements to the smart home network: a

‘physical’ connection linking the components e most often a wiredconnection or a radio signal (as in the case with ‘wireless’); and ashared language by which the various components can communi-cate with one another and exchange information e a ‘communi-cations protocol’.

Different physical connections have different advantages andlimitations in terms of their data capacity, speed, distance, cost andinstallation requirements [27]. As a result, the preferred type ofconnectionwill depend on the application or the type of service forwhich it is intended. A broad range of communications protocolsalso exist and vary depending on the physical media with whichthey are associated (see Ref. [28] for a review).

Different networks and protocols are developed and champ-ioned by different manufacturers and suppliers,1 obliging smarthomeowners’ brand loyalty. Consequently, for example, eventhough ZigBee has emerged as the leading wireless standard,several major industry corporations support alternative technolo-gies such as Wi-Fi, ZWave, 6LoWPAN2 [24].

Roy et al. [29] classify a smart meter-enabled smart homenetwork (i.e. HAN) as one of the smart distribution grid segmentsand predict that initially customersmay need a newgateway device(or router) for the smart meter and any home management system(software provided by a third-party vendor residing on a PC (per-sonal computer) within the home) to facilitate two-way commu-nication between home and the grid. However, as technologiesdevelop and the smart home market matures, they argue that therouter’s functionality may be integrated with that of the meter.3

Indeed, currently smart home services provided by a few speci-alised UK start-up companies4 use a router in this way.

Via the gateway, a smart home may be able to communicatewith the grid, and respond to the grid constraints to match supplyand demand in a cost effectivewaywhilst meeting user preferencesand needs. This could be achieved for both electricity and heatingsystems via automated management of controllable loads. Forexample an operationally variable load, like a washing machine,can be programmed to run overnight so that the laundry is finishedby a pre-set time while shifting the peak demand either to avoidlocal network congestion or contribute to national balancing at thesame time. Alternatively, as long as the householder fills up thekettle and sets it to provide hot water at a certain time, a smarthome can manage this constant operational load in a grid-supportive way so that each new power flow request is scheduledand arranged to avoid or lower sudden peaks. Similarly heatingsystems (for example heat pumps) can benefit by a much moreaccurate estimation of external temperature and shaving peak load.

1 An article published on the front page of Financial Times on 25/02/2013 pre-sents the current state of industrial alliances in the ‘battle over standards forwireless power’.

2 Pv6 over Low power Wireless Personal Area Networks.3 One of our experts noted a disagreement with this statement. He argues that

there will be two separate gateways, one for the utility, which the utility owns andpays for, and one for anything else, which the customer will pay for. There is not alot of evidence that there will be any link between the two, or that utility data suchas billing information will be available to integrate with the customer accessibledata. Basic data may be made available by the utility but that’s of limited use formost applications whereas the much more available data within the smart meterthat customer owns can be accessed by this separate gateway. The customer thenhas the option of using that data in the home or exporting it to a third party service.

4 Among some of UK companies are AlertMe (https://www.alertme.com/) andOnzo (http://www.onzo.com/).

2.2.2. InteroperabilityThe successful smart home must evolve and adapt to changing

preferences, demands and needs [15,30]. As such, the systemshould be able to easily assimilate new devices gradually added tothe smart home network, and its devices need to be able tocommunicate with one another. However, with different devicemanufacturers favouring different types of network media andcommunications protocols, often this is not the reality. This is theproblem of interoperability, posing a challenge to consumer elec-tronics retailers as to the functionality and therefore the appeal,demand for, and delivery of, smart home services [31,32].

Recent literature highlights two ways in which the sought-afterconsistency and coherence within smart home systems might beachieved:

1. Universal standards for communication protocols: This in-volves a set of specifications to which new smart home tech-nologies would have to be developed to ensureinteroperability. Various attempts to create such standardshave been made, resulting in communications protocols suchas UPnP (Universal Plug and Play), the BACnet (Building Auto-mation and Control Network) and the DLNA (Digital LivingNetwork Alliance). In 2000, three main European standards e

the EIB (European Installation Bus), the EHS Protocol (EuropeanHome Systems) and BatiBus e were combined into KNX(Konnex), a standardised communications protocol countingover 270 manufacturers from 33 countries amongst its mem-bership. Cooperation between companies in this manner hasits advantages in helping to reduce the effort and investmentinvolved in developing smart home products [33]. Wherecompeting sectors are concerned, however, cooperation mayneed to be facilitated through appropriate legislation.

2. Central network hub or ‘gateway’: This would connect and actas an interpreter between the different smart home devices orsub-networks. This gateway would act as a home networkrouter able to connect multiple home computers and periph-eral devices (e.g., printers) to one another and to the Internet[27]. However, the future structure of the smart home networkand future demands on it are unpredictable. This necessitatesthe development of a highly sophisticated gateway: one whichis able to continually search for, recognise, and adapt to, newdevices added to the network. Platforms such as the OSGi(Open Services Gateway Initiative) and Jini are designed toadapt to the addition and removal of new devices withoutrequiring manual installation, upgrade or reset [27]. Suchgateway solutions still have their limitations however, oftenrequiring that devices are equipped with specific software (e.g.,Java Virtual Machine).

Ensuring interoperability is more of a problem for existinghomes, though, since many households own appliances and de-vices that have been acquired at different times, from differentvendors, and which were created under different design con-straints and considerations [15] (see Section 2.3).

2.2.3. ReliabilityIn the integrated smart home, the interconnecting of technol-

ogies with different tolerances for technical errors poses a concern.For example, boiler designers and home computer developers workunder different assumptions about the appropriate tolerance levelfor crashes. Combining the two different products introduces roomfor complications; otherwise insignificant malfunctions in thehome computer could potentially cause dangerous malfunctions inthe boiler it is networked up to. In their design, smart home sys-tems must be robust and dependable in this respect [34].

N. Balta-Ozkan et al. / Energy 60 (2013) 361e372364

2.2.4. SecurityIn order to tailor its systems to best support the inhabitant’s

lifestyle, a smart homemay collect information about them, such astheir physical movements and daily routines (e.g., using sensors orvideo cameras), energy use and bills, purchases or even musicpreferences. The safeguarding of personal data and development ofsecure systems, especially for remote control of smart home ser-vices (e.g., opening the garage door, or turning lights or heating onor off using a mobile phone), are key challenges. Eventually, secu-rity concerns will differentiate preferences for the different smarthome technologies available. For example, in biometric accesscontrol technology e likely to become affordable for homeownerswithin the next few years e voice recognition is less secure thanalternatives such as fingerprint and iris recognition [35].

2.3. Installation of smart homes

King [20] identifies three methods of smart home propagation:i) retrofitting existing homes; ii) converting other properties (e.g.,barns, warehouses) tailored to buyers’ requirements; and iii)purpose-built homes. Currently, the latter two aremost used [16] asthey offer the ability to optimise high, extensive cabling andintelligent control infrastructure costs with respect to the physicalcharacteristics of a building. To accommodate an extensive array ofsmart home services and functionalities, new, high-capacity typesof ‘structured’wiring (e.g., RG-6, CAT 5, etc.) can be installed duringthe construction process. However, due to high installation costs ofsmart home technologies, many construction companies are un-likely to install them in all but luxury domestic buildings, resultingin many new builds being constructed without the ability to evenaccommodate them [16]. This is despite the fact that having a clearvision of smart home features and network structural demands inadvance facilitates the design of a straightforward network withwhich to coordinate the different smart home utilities [27].

However, there remain doubts as to whether new builds will bea central means of smart home development. In contrast withcustom-made smart homes built for smart home pilot projects,new technology is likely to be brought into the home in a ‘piece-meal’ way [15,30]. In these circumstances, network infrastructureoptions, such as wireless, show promise as it is suitable for a rangeof different systems and services, and does not require an invasive(and thus costly) installation procedure [27]. Among the wirelesstechnologies, Zigbee devices are most commonly discussed [36].Pre-existing home network infrastructure, such as power andphone lines, may be exploited for similar reasons [16], althoughtheir data capacity may limit the services they can facilitate.

2.4. Energy policy

2.4.1. UK energy system decarbonisation policy goalsRather than providing an exhaustive list of UK’s energy and

climate change policy goals to decarbonise the UK energy system,we aim to highlight a few that will significantly affect the devel-opment of the smart home market. On the supply side, with theEuropean directive 2009/28/EC, the UK is legally obliged to meet15% of all energy consumption from renewable energy sources by2020 [37]. A key scheme to ensure a better utilisation of renewableresources via distributed generation is the introduction of feed-in-tariffs5 in April 2010, resulting in transformation of as many as250,000 householders from consumers into more active ‘pro-sumers’ by the end of March 2012 [38].

5 This scheme offers a fixed payment for generation from renewable sources ofelectricity for under 5 MW of capacity.

On demand side, the radical 80% carbon emission reductiontarget from 1990 levels by 2050 embodied in the Climate ChangeAct [39] necessitates electrification of heat and transport as evi-denced in various low-carbon policy scenarios [40e44]. Morespecifically within homes, the RHI (Renewable Heat Incentive) willprovide a fixed tariff per unit of heat energy produced from variouslow carbon technologies such as biomass boilers, ground sourceheat pumps and solar thermal in commercial and domestic prop-erties [45]. Another important policy initiative focuses aroundattainment of ‘zero-carbon homes’ ratings whereby a building’senergy demand is matched against renewable energy installed[46]. Green Deal,6 funds capital costs of energy efficiency in-vestments where savings made on energy bills up to 25 years areused to pay back these loans [48]. Finally, the £500Million Low-Carbon Networks Fund aims to test new technologies, operatingand commercial arrangements.7

Smart homes will contribute to the delivery of the UK’s energyand climate change policy goals by offering a single platform, a one-stop shop, enabled and supported by a variety of different tech-nologies and communication systems, for the householders to optin to, control and manage their energy demands in a grid sup-portive way. More specifically, the real-time access to house-holders’ energy use data via smart homes would contribute to UK’sbalancing a power grid with a large share of intermittent genera-tion through demand side response programmes and storingelectricity (via heat pumps, battery technologies or hydrogen) anddecarbonisation of heat and transport sectors by allowing inte-gration of active loads (e.g., heat pumps or electric vehicles). Theywill help with lowering of energy demand via home (or building)energy management systems. Through communication with smartgrids, the network operators will gain a better observability andcontrollability of the power grid so that energy is provided reliablyto the householders. Further, smart homes will facilitate a bettermatch between the householders’ needs and preferences, moredifferentiated, dynamic tariffs and demand response programs in amarket environment in a cost-effective way.

2.4.2. Smart meter roll-outGiven that the domestic sector accounts for over 30% of total UK

final energy consumption [49], it is not surprising there are manypolicy initiatives focussing on this sector, such as smart meter roll-out. The roll-out is not only the most significant policy initiative forthe UK’s transition to smarter grids but also creates vast opportu-nities for developing the smart home market by facilitatingcommunication across different technologies within homes as wellas the exchange of data between householder and the grid (via anenergy company or a third party provider) so that new energyservices be developed. A smart meter can communicate data acrossdifferent devices, and technologies within homes, including energydisplays, thermostats, lighting controls, appliances (e.g., re-frigerators, washing machines), customer owned energy genera-tion (e.g., photovoltaic or wind), energy storage (e.g., batteryappliances, heat pumps), plug-in electric vehicles and energymanagement systems.

UK smart meter roll-out is an on-going process on a voluntarybasis for consumers by taking part in schemes set up by utilitieswishing to initiate installation early. Around 18,000 installationstook place as part of the initial large-scale trials that were funded bythe Government in 2007 [50]. With an accelerating schedule ofinstallation from 2014, it is planned that 53 million gas and

6 For an assessment of this initiatives, among others, see Ref. [47].7 http://www.ofgem.gov.uk/Networks/ElecDist/lcnf/Pages/lcnf.aspx, accessed 27/

01/2013.

N. Balta-Ozkan et al. / Energy 60 (2013) 361e372 365

electricity meters will be installed at 30 million domestic andsmaller non-domestic properties by 2019. The Government in-dicates that participation in this programme is not mandatorywhilst energy companies will be required to take all reasonablesteps to reach every household.8

Fig. 2. Distribution of dwellings by tenure and age profile (England, 2010). Source:Based on data [56].

2.5. Industry structure

The UK9 electricity supply system is a deregulated one, charac-terised by four types of organisations that deliver electricity toconsumers: power producers (i.e. large-scale electricity genera-tors), TSOs (transmission system operators) who transport high-voltage electricity from producers to regional distributions net-works; DNOs (distribution network operators) who run the distri-bution grid; and electricity retailers. Both retailers and powerproducers operate in a competitive market while transmissionsystem and distribution network operators are regulated by themarket regulator,10 Ofgem (Office of Gas and Electricity Markets).

This structure impacts on the development of the smart homemarket for the following reasons:

1) As the benefits of smart grid and smart home technologies andinfrastructures might sit with a range of these actors along thesupply chain (the so-called ‘broken value chain’ problem [51]),these players need to adopt a financial model that is differentfrom a traditional utility capital investment analysis [52]. This isa public good provision problemwhere the benefits are realisedby the entire industry and as a result are non-excludable [53].

2) The communication systems adopted by different utilities andDNOs need to allow householders to be able to switch to otherservices and products should they wish so.

3) Ofgem needs to develop appropriate incentives to deploy thenew technologies in a way that not only supports technicalinfrastructure for different smart home services but also newentrants to the energy market to increase consumer choice.

Another characteristic of the UK energy system is that it is cen-tralised and energy flows in one direction from the grid to thehouseholders. In order to meet the radical 80% target utilisation ofrenewable resources and generation of electricity at all levels frommicro-generation at household level to large on-/off-shore windfarms are needed. Themove from today’s centralised, uni-directionalsystem tomore distributed, multi-directional flowing energy systemis a massive challenge, creating a major driver for smart grids.

2.6. Housing stock

There are nearly 27.3 million homes in UK and this number hasnot changed significantly as fewer than 180,000 new homes arebuilt each year [54]. This slow renewal rate indicates that 75% of theexisting building stock of today will be present in 2050 [55].Another characteristic of the UK housing stock is that it is quite old;nearly three-fifths is built before 1965. Of the nearly 22.4 million

8 http://www.decc.gov.uk/assets/decc/11/tackling-climate-change/smart-meters/7204-smart-metering-imp-prog-info-prog.pdf.

9 UK comprises England, devolved administrations of Scotland and Wales, andNorthern Ireland, while Great Britain includes England, Wales and Scotland.10 As Northern Ireland’s electricity system is integrated with that of Ireland’s,Great Britain’s transmission system is owned by three commercial entities, withone of these companies, National Grid, having the responsibility to oversee andmanage the flow of electricity across the country. On the other hand, there are 14regional distribution areas, each with a separate licence under specific conditions.As a result, DNOs are regional monopolies which are regulated through a pricecontrol mechanism by Ofgem.

homes in England, nearly 66% are owner occupied while the restare either privately rented or owned by local authorities andhousing associations. The significant proportion of owner-occupiedand privately rented properties were built pre-1965 in England(Fig. 2).

Understanding UK housing stock characteristics (age andtenure) is important for a variety of reasons. Firstly, the physicaloutline of a home (flats versus terraced homes) determines howpeople use that space and carry out certain daily activities/routines,affecting how consumers perceive smart home technologies ‘fittinginto their lifestyles’ [18]. At a more technical level, propagation ofcommunication signals in the home could be problematic as bothfree space path loss (reduction of signal strength with distance) ishigh and barrier losses (e.g., loss of signal strength as it propagatesthrough walls) are significant [57]. Finally, the significance of theseissues depends on other physical characteristics, such as buildingmaterials (e.g., stone versus timber), height of the building, meterlocation, etc.

On the other hand, tenure is important as installation and use oftechnologies and appliances often differ between renters andowner-occupiers [58]. Housing belonging to local authorities andhousing associations have above-average energy performance,followed by, in descending order, owner-occupied homes, andprivately rented homes11 [60].

3. Methodology

3.1. Expert interviews

Expert views were collected through semi-structured in-terviews, which are particularly relevant for novel topics orexperimental technologies [61]. The interview topic guide focusedon identifying barriers and drivers for the development of smarthome services; challenges and risks associated with their deliveryas well as how they can be addressed; types of business models;smartening of existing versus newly-built homes; and the socio-economic variation in consumer appeal. Initially, experts knownin the domain were contacted. Further stakeholders were thenidentified through a ‘snowballing’ method. Out of 12 expertsidentified, eight agreed to take part in the study, representing a

11 While below-average energy performance of the latter can be explained byinformation asymmetry and mismatch of preferences [59], it is not clear whetherhistorical trends observed in attainment of energy-efficiency improvements inhomes owned by local authority and housing associations [53] will hold for in thefuture.

12 In older houses made of solid stone, smart home technology would cease towork due to propagation issues. Similarly, in newer buildings from 1960s, the use offoil-backed plasterboard would have the same effect.

N. Balta-Ozkan et al. / Energy 60 (2013) 361e372366

range of sectors related to smart homes, including telecommuni-cations, IT, healthcare, consultancy and start-up companies todeliver of smart home services. Each interview lasted 1e1.5 h.

3.2. Public deliberative workshops

3.2.1. Locations and participantsTwo deliberative workshops, each comprising three smaller

groups, were convened in two UK locations, London (large city) andBridgend (small city). London, as capital city of the UK, has a pop-ulation of approximately 8 million. Bridgend is a small town situ-ated about 22 miles west of Cardiff, the Welsh capital, with apopulation of approximately 40,000.

In addition to seeking contrasting geographic locations, work-shop participants were further subdivided into three smallergroups based on age and life stage. These groups were identified as‘pre-family’ (participants under 30 without children), ‘family’(participants 30e50, usually with children) and ‘post-family’ (par-ticipants who were over 50 with no children, or no children livingat home). Within these broad age groups, recruitment focused onensuring an even gender split and range of job types, reflecting abroad socio-economic spectrum.

Recruitment was undertaken through a research recruitmentcompany. Each workshop involved around 30 participants (dividedinto three sub-groups of 10).

3.2.2. Methods and materialsIn sub-groups, participants were asked about their views on and

understanding of their home, appliance and energy use, energysaving, and homes in the future. This stage aimed to elicit existingunderstandings and associations before any information on smarthomes was provided and more informed opinions elicited.

Two short videos and a presentation were then given to par-ticipants (in plenary) on smart homes. The stop-motion videos(produced by one of the academic project partners) presentedcontrasting perspectives [62] on the benefits and disadvantages ofsmart technologies/systems (e.g., smart meters, variable tariffs,electric vehicles, efficient appliances) in terms of how an individual(video 1) or family (video 2) household might experience them. Abrief Powerpoint presentation then outlined the range of smarttechnologies and services that might be introduced (or, in somecases, already exist), focussing on the domains of healthcare, homesecurity and energy consumption and management. In smallergroups again, participants discussed their responses to the videosand presentation, and their attitudes to the smart technologies andservices presented (see Ref. [11] for details).

In total, each workshop lasted 4e4½ h.

4. Results

4.1. Technical, economic/commercial and policy factors affectingsmart home adoption: expert views

Here we present experts’ views on the technical, economic/commercial and policy factors that might hinder or facilitate theadoption of smart homes in broad categories that emerged fromthematic interview analyses.

4.1.1. Smartening of existing homesDue to the cost of integration of different smart home technol-

ogy components, experts agreed that the smart home servicesmarket will evolve in stages. The first stagewill be the autonomous/standalone appliances where different smart appliances (mostlikely to start with fridges as there has been massive improvementin design, pushed mostly by regulation) are integrated into

consumers’ lifestyles (i.e. ‘piecemeal adaptation’ [15,30]), lasting10e20 years (given the lifetime of appliances). The second stagewill involve connective smart appliances and integration with thegrid. Some experts articulated further that smart homes may beconnected to the other homes directly (a smart community, forexample) so that householders exchange energy back and forth,making the need for a grid obsolete at times.

However some experts envisioned that not all the homes willultimately be smart. This is mainly because it is too complicated tocontrol the programmes that interact with and manage differentsensors, devices and appliances. An analogy was made to theowners of smart phones versus smart phone users actively runningdifferent applications where the latter is only about 5% of the total.

4.1.2. UK building stock characteristicsExperts agreed that UK housing stock is less efficient than

elsewhere in Europe. Hence, they articulated, the first and biggestchallenge for existing homes will be to make them more energyefficient rather than fitting smart technologies, as ‘no amount ofsmart home technology can compensate for a poorly insulated home’(R2, p. 11).

More specifically for smart home market development, due tothe scarcity of new homes and a dependency on old housing stock,ways will have to be found to ‘retro-fit’ smart technology intoexisting homes. This would involve fitting structural wiring net-works into older homes. To address challenges associated withcommunication systems in both old andmore recent builds,12 somesuggested a low cost ‘robust and reliable radio frequency transducer’be developed, enabling the interface of a ‘radio network’ fromanywhere (R5, P. 8).

Installing smart technology into new build homes is morestraightforward as everything would be installed at once. Thereforenew buildings should be smart or ‘smart ready’. However tougheconomic conditions mean that few homes are currently beingbuilt.

4.1.3. InteroperabilityDespite agreement on the importance of universal standards to

overcome interoperability, one expert claimed that rather it will bedriven by the market and that the winners of the smart homeevolutionwill ‘tend to define the standards for interoperability’. Someexperts argued that verification/testing is more important thanstandards as this would reassure consumers that it does notinterfere with other home devices and appliances.

By taking smart homes as evolvable systems, adapting tochanges in life-stages of householders (e.g., from single to marriedwith children), interoperability may also ensure integration andoperation of different services (e.g., assisted living and energy ef-ficiency) so that ‘services can use each other’s components’withoutwasting resources. Experts articulated contrasting views wheresome cautioned that consumers could end up with ‘four devicessitting on the ceiling to see whether there’s anybody in the room or notat the moment’ while another articulated information from sensorscan be reused for different services (e.g., a motion sensor for homesecurity helping to optimise heating via a built-in temperaturesensor). As the providers of these services operate in differentmarkets, in addition to universal standards, development of theseservices in a holistic way would also ensure that resources are notwasted inefficiently. However, one expert highlighted that

N. Balta-Ozkan et al. / Energy 60 (2013) 361e372 367

consumers would be reluctant to receive health services from autility company, indicating the importance of consumer trust.

4.1.4. ReliabilityExperts highlighted that in general, technologies being used in

smart homes are reliable and products are being designed for a fiveto ten year product life. Nonetheless providers of smart home ser-vices would have to guarantee reliability. However one intervieweehighlighted that when different systems are in place in a homesetting, there could be ‘unintended consequences’ (e.g., turning offall energy circuits, either because of an emergency or to save en-ergy, in a home where a life support machine is connected). Theinterviewee suggested that these consequences can be avoided bybuilding inherent control systems in the devices so that only certainpeople can access and control their operation, as if they have ‘a DoNot Touch label on them’. Similarly, the risk of malfunctioningwirelessly connected or battery operated sensors may be mini-mised by having a manual override, to ensure for example, thatoccupants can get back into their homes even if their operatingsystem is stopping them.

4.1.5. SecurityExperts emphasised the importance of physical security

ensuring that systems are not compromised. It was also pointed outthat if consumers lack confidence in the system they will not use it.One possibility is to have ‘few sensible precautions’ built into smarthome delivery systems like strong encryption software, similar tothat used in Internet banking.

While some experts thought security was a technical problemwith simple solutions, privacy was regarded by others as a moreprofound risk. Companies may offer a free service in return forcustomer data, but consumers would have to understand the na-ture of this exchange otherwise companies would face ‘reputationalrisk’. Making consumer information available to other parties maybe fraught with difficulty. It is possible that data may fall into the‘wrong hands’, or that one piece of ‘innocent data’ combined with asecond piece of ‘innocent data’ becomes a piece of ‘non-innocent’data. Finally, experts noted that companies other than utilities havea better understanding of data privacy, particularly supermarketsand retailers who have been gathering similar customer data formany years.

4.1.6. UK climate change and energy policy goalsWhile some experts argued that UKGovernment climate change

and energy policy goals are an important driver for the develop-ment of smart home services (e.g., the need to manage largeintermittent generation), one interviewee highlighted that thepolicy framework could pose a risk if it ‘tries to regulate it so tightlythat it’s difficult to actually do anything’. More specifically, thisreferred to specification of smart meters to support a wide varietyof smart grid related services as well as the creation of a regulatoryframework around the use of confidential data (through the DataCommunications Company). The implications may be so huge thatmisuse of data ‘could kill the whole smart home industry’. Somementioned that the Green Deal offers huge opportunities, despitereservations (cf. [47]).

4.1.7. UK electricity supply industry characteristicsExperts questioned how much of the smart home business will

develop on the back of smart meters as the primary data source andhow many of these new services will be offered by utilities. Theyraised these issues since, even though at least initially utilities arein the ideal place to sell the services, i) most people do not trustutilities; ii) if privacy requirements become too great then utilitieswill walk away from that opportunity; and iii) companies other

than utilities (e.g., supermarkets) have a better understanding ofdata privacy. As these services gain in popularity, more aggressivesectors will move in such as supermarkets, mobile phone or in-surance companies with the aim of becoming market leaders.

Nonetheless, in a deregulated system, the service supply chaincould potentially be ‘incredibly complicated’ with call centres andrecord keeping systems, and ‘unless all the bits are individuallyrobust the chain will only be as strong as its weakest link’ (R3).

Another challenge to the existing supply chain is moving awayfrom a utility market where companies have ‘not really had to careabout their customers very much for a long time because [.] they alloffer the same thing and it’s not a competitive market so the customerdoesn’t really matter’ to offering smart home services that are tailor-made to each household to give ‘personal information, personalcontrol, personal automation’ (R2).

One expert suggested that the extent to which services aregeneralised or customised will depend on company size. Largercompanies will be more likely to keep their services as generic aspossible. However, the winners in this market will be companiesable to reassure consumers by saying ‘we’ll manage that complexityfor you’ (R1). There may be a temptation for energy companies tostick to existing tariff mechanisms and selling energy by Kilowatt-hour, however competing businesses will then be able to takebusiness away from them (R1).

4.1.8. Summary of findings from the expert interviewsThis section provides an overview of the major themes that

emerged from the expert interviews. Specific issues, either as adriver or a barrier (characterised by the following signs respec-tively: versus ) are summarised in Table 1. A key finding is theintertwined relationships between these issues. For example, whileintegration and operation of different services alongside each otherare a technical factor to drive innovation, it is a challenge at thesame time as the consumer values and preferences might affect theacceptance of these services in a market environment.

4.2. Technical, economic/commercial and policy factors affectingsmart home adoption: public views

4.2.1. Energy and cost savings from smart home technologiesThe global financial crisis and rising energy prices have trans-

lated into economic uncertainties and year-on-year increases indomestic energy bills. Households have further been squeezed byabove-inflation increases in the cost of living and stagnant wagesleaving many struggling to pay food and transport costs. Againstthis context, it is unsurprising that participants were concernedabout money and their household finances, and that these concernsunderpinned their discussions on smart home technology. Re-spondents in all groups talked about their awareness of householdenergy consumption. Some had digital meters, prompting them tomonitor their energy usage much more closely. Although they triedto limit consumption by switching off appliances and using energysaving bulbs, for example, participants saw no reduction in theirutility bills. Participants in the family and post-family groups basedin both town and city locations expressed this most forcefully:

‘I’ve tried all the basic stuff like switching things off, beingconscious of using the washing machine, that’s the bugbear of my life,having a young family, but it annoys me because I don’t know how tomanage it best’ (R6, ‘City family’ group).

‘Since December, I monitor everything all the time, because the billswent horrendous and then it was really a question of re-educatingeverybody’ (R2, ‘Town post-family’ group).

‘I’m knocking all these switches off but my bills are still going upand up, so I’m thinking the more I’m switching things off, I’m still

Table 1Overview of drivers and barriers from the expert interviews.

Technical Economic Commercial Policy

Smartening of existing homes Costs of smart home technologies leading toa ‘piecemeal adaptation’Complexities to manage smart home technologyand services

Old housing stock characteristics Inefficient old housing stock with thermal lossesFitting structural wiring networks into older homesPropagation of communication systems

Interoperability Development of universal standards U

Market leaders defining the standards ratherthan mandates

U U

Integration and operation of different servicesalongside with each other

U

Reliability Unintended consequencesMalfunctioning of technologies

Security Solving physical security via simple solutions U

Privacy concernsData falling into ‘wrong’ handsEnergy companies’ understanding of dataprivacy issues

Policy The presence of climate change and energypolicy goals

U

Extremely tight regulations

Electricity supply industry Vertically disintegrated supply industryTailor-made services to each household

N. Balta-Ozkan et al. / Energy 60 (2013) 361e372368

paying more anyway so no matter what you try to do, it’s not gettingreduced’. (R3, ‘Town family’ group).

One respondent recounted going on holiday, and consequentlyexpecting her bill to be cheaper on her return, yet ‘it’s virtually thesame as before, how come I haven’t saved any money?’ (R7, ‘Townfamily’ group). Therefore despite their best efforts to limit usage tosave money on bills, respondents expressed frustration at the lackof control they ultimately experienced. The amount paid for utili-ties was perceived to be a set amount taken from their bank ac-counts with little bearing on the variations in their energyconsumption.

Consequently, when appraising different smart home services,participants were most keen on those that would reduce energyconsumption and save them money. The city post-family, forexample, liked the idea of being able to monitor energy usage sothey could be alerted to any significant changes and therefore avoidlarge bills. Both the family and post-family city groups liked theidea of being able to sell energy back to the grid. However, re-spondents wanted to see substantial savings for it to be worthwhilefor them, ‘Saving a few pence, I don’t think most of us would care;substantial savings we’d take notice of’ (R3, ‘Town post-family’group). A cost saving of £50 per month was cited as a substantialsaving. Conversely, respondents would not be overly concerned iftheir bills increased by a couple of pounds, but would worry if theysaw substantial (e.g., 50%) increases.

Running appliances when electricity is cheaper was frequentlyperceived as pointless as it was assumed that any savings madewould be nominal. Instead, participants favoured reasonablypriced, energy efficient appliances with proven cheaper runningcosts. When discussing the cost saving potential of smart hometechnology, respondents tended to assume it would involve a long-

term investment. Therefore consumers would have to live in aproperty for a number of years before recouping costs and makingsignificant savings.

4.2.2. Smart home technology as prohibitively expensiveWhile participants could see the potential for cost saving, con-

cerns were raised across all groups over the associated costs ofdifferent aspects of smart home technology. The cost of installationwould be the first barrier, and perceived as worthwhile only forlonger term homeowners who had the necessary funds, therebyautomatically excluding those on low incomes and tenants living inprivately rented or council properties. Fears of financial exclusionled to one participant commenting:

‘.my kids are going to be with me in their 30s and 40s, I’ve gotvisions of my kids being with me permanently because they won’t beable to afford these bills’ (R3, ‘Town family’ group).

The city family group viewed smart technology as a commodityfor the white, affluent middle classes. The group assumed thatonly a minority of the population would have the money to buysmart home technology e it ‘just wasn’t for me’ (R1, ‘City family’group). Many respondents felt that first time buyers would beunable to afford smart home services. There was speculation thatrenters and council tenants would automatically be excluded aswell as questions over what would happen when people movedhome.

The second barrier involved the ongoing costs of running asmart home. Respondents assumed that smart repairs and main-tenancewould be costly and complicated, and fears were expressedof being committed to a smart contract, which may leave con-sumers vulnerable to rising energy prices. In order to widen access,some participants suggested the introduction of grants and means-

N. Balta-Ozkan et al. / Energy 60 (2013) 361e372 369

tested schemes, or including the costs of smart technology intohomeowners’ mortgages.

4.2.3. Improving quality of lifeParticipants across all groups tended to favour smart home

services they perceived as practical and with the potential toimprove quality of life. Fire, air quality, carbon monoxide detection,and security systems tended to fall into this category. Participantsliked the idea of automatic lighting, keyless locks, programmingremotely via mobile phone and selling energy back to the grid. Theadvantages of wireless technology were discussed in a couple ofgroups, with participants equating such developments with moreefficient use of space, fewer wires, cables and clutter. Smart hometechnology was seen to have the potential to increase leisure time,savemoney, make life easier, and provide support for assisted livingfor the elderly and those with disabilities. It was suggested that theuptake of smart home technologies would depend on consumersbeing convinced that it would have a ‘positive impact on generalwellbeing’ (R7, ‘Town family’ group).

4.2.4. Perceived suitability of older housing stockUK’s old housing stock was reflected in the people who partic-

ipated in this research as many described living in older properties.When talking about smart homes, participants often could notenvisage being able to have smart technology because their olderhomes were assumed to be completely incompatible:

‘.all these technologies are great but in most cases, it would be fora new house. I think to monitor an old house and keep it very efficientis much more difficult than a new build.’ (R9, ‘Town post-family’group).

Similarly, one of the groups of young people viewed smart hometechnology as irrelevant to ‘us young [city dwellers] because there arevery few new homes, very few of us can afford to buy here and youcan’t deal with that kind of stuff in Grade II listed houses’ (R7, ‘Citypre-family’ group).

Aesthetic appeal was also a significant consideration, withmanyparticipants disliking the idea of living inmodern properties, ‘I don’twant to live in a new modern box that’s all double glazed, has nocharacter, has laminate flooring and plastic windows’ (R7, ‘City pre-family’ group). New properties were seen as impersonal, whereasolder properties were viewed as more desirable even though it wasassumed they would be more difficult to update with the latesttechnology.

Table 2Overview of drivers and barriers from the public workshops.

Energy and cost savings Curtailing energy use to reduce energy billsAchieving substantial savings via smart tech

Smart technology as too expensive Installation costsMaintenance costs

Improving quality of life Practical services improving quality of life

Suitability of old housing stock Sentimental values towards the protection

Privacy and data security Compromise securityInvasion of privacy

Operation of smart technology Concerns on how to operate smart technoloReliability of smart technology

Influence of Government and policy Government leading by exampleFairness and equality of access to new tech

4.2.5. Privacy and data securityA recurring concern for participants was the potential of smart

home technology to compromise security and invade privacy.Smart technology was viewed akin to any system or account sus-ceptible to hacking. Participants readily accepted the concept ofcontrolling smart home services by smart phone, but consideredthis as both a convenience and a vulnerability. The threat seemedvery real to participants as many already owned smart phones andwere aware of their appeal to thieves, not only as an object of valuebut for the volume of personal information held on devices. Phonesare carried throughout the day and often away from the home,leading respondents to speculate on the consequences if theirphone was stolen or lost: ‘If you lose your phone, somebody justwalks into your house’ (R3, ‘Town post-family’ group). Respondentswere often uneasy about the household monitoring involved in thesuccessful application of smart home services. It was anticipatedthat assisted living and security services, for example, would lead tothe accumulation of a great deal of sensitive personal dataincluding day-to-day activities. (For further discussion on percep-tions of privacy see Ref. [19]).

4.2.6. Smart technology as difficult to operate and unreliableThe family groups in both locations expressed concern over

how other consumers would cope with operating smart hometechnology. The city family group speculated that smart hometechnology would require significant technical knowledge tooperate, with concerns that older people might find it particularlydifficult to adjust. The town family group anticipated that smarttechnology would exclude those who are not computer literate.However, they went on to suggest that as parents, the introductionof smart home technology would require the greatest adjustmentfor them given their stage of life, ‘we’ve all got families so it’s hard[.] it probably affects us more than it would any other generation’.Older people ‘haven’t got to worry about it anymore’ and youngerpeople are ‘probably still living with their parents’ (R4, ‘Town familygroup).

Many participants anticipated technical problems with smarthome services, such as room sensors being triggered unintention-ally or security systems malfunctioning. They questioned whatwould happen if a remote control designed to operate severalhousehold functions stopped working. There was a pervasive senseof unease at becoming reliant on computer systems. Some worriedabout being left without central heating duringwinter, for example.

Technical Economic Commercial Policy

U

nology U

U U U

of older buildings

gy

nology

N. Balta-Ozkan et al. / Energy 60 (2013) 361e372370

4.2.7. The influence of government and policy on lay viewsViews of smart home technology were often expressed in rela-

tion to government action. Often, government was perceived toshow a lack of consistency, for example, regarding funding set asidefor domestic solar panels:

‘it goes up and down, the government one month will have certainamount of millions to put into solar panels on people’s roofs, then thenext month there will be no money so they won’t be doing it’ (R4,‘Town pre-family’).

Grants were seen as related to government revenue, in that ifrevenue is threatened, schemes to encourage energy efficiency arestopped. Instead, policy needs to be equated with a long-termgovernment vision to promote pro-environmental behaviours inorder to gain public trust.

Participants wanted to see consistency in government policy aswell as tangible proof that government is leading by example, ‘if[they] are going to promote this and push this, they should be seen tobe doing three times the amount of what we do’ (R4, ‘Town family’group). A way to demonstrate this, according to one participant,would be to install solar panels onto government buildings, thenpublishing the energy and money saved per year as a result of solarenergy. In order to encourage the public to adopt smart hometechnology, it would be necessary to introduce incentives such astax rebates and subsidies. Special attention would need to be givento those on low incomes with the introduction of grants andmeans-testing to ensure fairness and equality of access to newtechnology, instead of action that exacerbates inequality and feel-ings of injustice:

‘Houses that are £5m, all in September last year, the two next doorneighbours, they got a £3500 government grant [.], then two streetsdown the road it’s a local council estate and they’re really poor people,so there’s a real divide now between the really poor and the peoplethat have got loads of money that seem to know how to get every-thing.’ (R1, ‘City family’ group).

4.2.8. Summary of findings from the public workshopsThis section provides an overview of the major themes that

emerged from the public workshops. As before, specific issues arehighlighted either as a driver or a barrier (characterised by thefollowing signs respectively: versus ) as summarised inTable 2.

5. Conclusions

Experts agreed that UK climate change and energy policy goals(in addition to increasing energy prices) will drive UK smart homemarket development. On the other hand, one expert presented amore technology-driven perspective as to how the most underde-veloped aspect of our lives, homes, can catch up with other in-dustries through technological innovation:

‘.There was nothing really joining the dots between people andtheir homes even though their homes were very important, lots of veryimportant things happen there, lots of expensive things happen therelike energy and yet consumers really had no visibility or understandingof that at all [.] there were several technological drives but the socialdriver was really down to connecting people to their homes [.] andthe home is starting to look more and more like an odd one out.’ (R2,p. 2).

Whether such a technology-driven perspective drives thedevelopment of smart homes market, experts noted various chal-lenges including interoperability, reliability, security and the char-acteristics of UK supply chain and housing stock. Some expertsargued that interoperability and security can be dealt via ‘cloudcomputing’. Despite the reliability of individual technologies, theirinterference with other devices/technologies within a home poses

a risk to consumer confidence that may be addressed throughverification schemes. On the other hand, smart meters providing agateway for various smart home services was perceived to becontingent upon the regulatory framework around access to anduse of confidential data. As highlighted by the experts, possibletension between interoperability and security (the use of the sameprotocols increasing the risk of them being hacked) and develop-ment of ‘closed system architecture’ [63] seem to be an importantmarket barrier, also noted in the literature [24,63]. On the otherhand, experts thought the deregulated UK industry and lack ofexperience of energy companies in data analytics would createopportunities for other retailers (e.g., supermarkets), thus openingthe energy market up to new entrants [64]. These new entrantsmay be well placed to deliver smart home services given the lack oftrust in utility companies and government we observed. None-theless, the emergence and development smart home energy ser-vices such as aggregators is contingent upon, on the one hand,having communications infrastructure systems in place, as well askey drivers (large share of renewable intermittent generation;electrification of heat and transport; large amounts of distributedgeneration). On the other hand, once the right regulatory andcommercial conditions are created, there needs to be a market,including the smart appliances and interested consumers. The in-terdependencies between these technical, commercial, economicand policy aspects will determine the functionality and capabilitiessupported by smart homes and ultimately by smart grids.

Maybe not so surprisingly, only some of these technical issueswere mentioned by the public, including concerns about reliability,data security and housing stock. On the latter, given the high shareof older housing stock in the UK, as well as technical difficulties(propagation of communications signals, interference of differenttechnologies) consumer perceptions about their suitability toinstall smart technologies is likely to affect the pace the develop-ment of smart home market. At the same time, consumers wereinterested in technologies which could improve quality of life andsave them money, while also expressing concerns that mainte-nance cost of these smart technologies could be high, in addition toinitial cost of technologies [65] as highlighted in the literature. Inthis regard, development of products and services where thesecosts are included within the premium price might be moreattractive for householders; as articulated by experts, consumersare unused to paying monthly fees for energy services in the waythey pay for mobile phone tariffs. By bundling the lifetime value ofa service fee with the initial sale (of a boiler, for example), con-sumers would pay an incremental amount for their online heatingcontrol. From their point of view it will look like a product ratherthan a service. Nonetheless, this might become more difficult tohandle when consumers change suppliers. Alternatively, com-panies could sell an ‘out of the box’ systemwhich consumers pay amonthly subscription for. Consumers would be able tomeasure andcontrol individual appliances or add a service ‘pack’, like homesecurity, allowing householders to start with one area of smarthome technology and subsequently add to it if desired.

Experts viewed assisted living as gaining the greatest marketshare (particularly with a growing elderly population wanting tolive independently at home), followed by security, smart meteringand energy management systems. This broadly reflects the interestexpressed by public participants in this research. However, the cost,user friendliness and tangible benefits of these technologies willneed to be attractive to ensure theirmass adoption [16,63]. As foundin other studies [66], householders might accept lack of privacy ifthere are significant individual benefits. Given strong concernsexpressed by the householders about data privacy (including ‘bigbrother’watching them), we argue that use of energy data to deriveother services (such as alerting of a carer if there is a change in daily

N. Balta-Ozkan et al. / Energy 60 (2013) 361e372 371

routines that it is 8:00AM and the kettle isn’t on) would help withtheir adoption and acceptability. These derived services, though,need to be tailored for different householders and respond to theirneeds (a family with children who has more established routinesversus an elderly couplewho is concerned about security). Howeverthis would require collaboration and integration of different in-dustries horizontally to deliver these services. In this regard, itseems the biggest challenge for industry as well as the academiccommunity is to overcome the silos around the development ofdifferent smart home services individually and instead adopt amore holistic view for the design and delivery of these services(whilst avoiding unintended consequences and addressing issuesaround trust, cyber security and broken value-chain problem) tooffer choice and drive efficiency to the consumers.

Acknowledgements

The study presented here is funded by E.ON SE as part of TheInternational Research Initiative 2012, titled ‘Consumer preferencesfor smart homes: a comparative study between the United Kingdom,Germany and Italy’.

References

[1] Darby S. The effectiveness of feedback on energy consumption: a review forDEFRA of the literature on metering, billing and direct displays. Oxford:Environmental Change Institute, University of Oxford; 2006.

[2] Lund H, Andersen AN, Østergaard PA, Mathiesen BV, Connolly D. From elec-tricity smart grids to smart energy systems e a market operation basedapproach and understanding. Energy 2012;42(1):96e102.

[3] Lujano-Rojas JM, Monteiro C, Dufo-López R, Bernal-Agustín JL. Optimumresidential load management strategy for real time pricing (RTP) demandresponse programs. Energy Policy 2012;45(0):671e9.

[4] Rastegar M, Fotuhi-Firuzabad M, Aminifar F. Load commitment in a smarthome. Applied Energy 2012;96(0):45e54.

[5] Fitzgerald N, Foley AM, McKeogh E. Integrating wind power using intelligentelectric water heating. Energy 2012;48(1):135e43.

[6] Alagoz BB, Kaygusuz A, Karabiber A. A user-mode distributed energy man-agement architecture for smart grid applications. Energy 2012;44(1):167e77.

[7] Arghira N, Hawarah L, Ploix S, Jacomino M. Prediction of appliances energy usein smart homes. Energy 2012;48(1):128e34.

[8] Al-Ali AR, El-Hag A, Bahadiri M, Harbaji M, Ali El Haj Y. Smart home renewableenergy management system. Energy Procedia 2011;12(0):120e6.

[9] Kofler MJ, Reinisch C, Kastner W. A semantic representation of energy-relatedinformation in future smart homes. Energy and Buildings 2012;47(0):169e79.

[10] Schleicher-Tappeser R. The smart grids debate in Europe: SEFEP workingpaper. Smart Energy for Europe Platform; 2012. http://www.sefep.eu/activities/publications-1/SEFEP-SmartGrids_EU.pdf [accessed 12.06.13].

[11] Clastres C. Smart grids: another step towards competition, energy securityand climate change objectives. Energy Policy 2011;39(9):5399e408.

[12] Torriti J, Hassan MG, Leach M. Demand response experience in Europe: pol-icies, programmes and implementation. Energy 2010;35(4):1575e83.

[13] Lopes Ferreira H, Costescu A, L’Abbate A, Minnebo P, Fulli G. Distributedgeneration and distribution market diversity in Europe. Energy Policy2011;39(9):5561e71.

[14] Agrell PJ, Bogetoft P, Mikkers M. Smart-grid investments, regulation and or-ganization. Energy Policy 2013;52(0):656e66.

[15] Edwards WK, Grinter RE. At home with ubiquitous computing: seven chal-lenges. In: Proceedings of the 3rd international conference on ubiquitouscomputing. Atlanta, Georgia, USA: Springer-Verlag; 2001. p. 256e72.

[16] Holroyd P, Watten P, Newbury P. Why is my home not smart? Aging friendlytechnology for health and independence; 2010. p. 6159.

[17] Davidoff S, Lee MK, Yin C, Zimmerman J, Dey AK. Principles of smart home control.In: Ubicomp 2006: ubiquitous computing, proceedings, vol. 4206; 2006. p. 19e34.

[18] Li W, Lee Y-H, Tsai W-T, Xu J, Son Y-S, Park J-H, et al. Service-oriented smarthome applications: composition, code generation, deployment, and execu-tion. Service Oriented Computing and Applications 2012;6(1):65e79.

[19] Balta-Ozkan N, Davidson R, Bicket M, Whitmarsh L. Social barriers to theadoption of smart homes. Energy Policy 2013 http://dx.doi.org/10.1016/j.enpol.2013.08.043.

[20] King N. Smart home e a definition. Milton Keynes: Intertek Research &Testing Center; 2003.

[21] Taylor AS, Harper R, Swan L, Izadi S, Sellen A, Perry M. Homes that make ussmart. Personal and Ubiquitous Computing 2007;11(5):383e93.

[22] Chan M, Esteve D, Escriba C, Campo E. A review of smart homes e presentstate and future challenges. Computer Methods and Programs in Biomedicine2008;91(1):55e81.

[23] Li J, Da-You L, Bo Y. Smart home research. In: Conference smart homeresearch. vol. 2. p. 659e63.

[24] AUC. Alberta smart grid inquiry. Alberta, Canada: Alberta Utilities Commis-sion; 2011.

[25] Scott F. Teaching homes to be green: smart homes and the environment.London: Green Alliance; 2007.

[26] De Silva LC, Morikawa C, Petra IM. State of the art of smart homes. Engi-neering Applications of Artificial Intelligence 2012;25(7):1313e21.

[27] Valtchev D, Frankov I. Service gateway architecture for a smart home. IEEECommunications Magazine 2002;40(4):126e32.

[28] Wang W, Xu Y, Khanna M. A survey on the communication architectures insmart grid. Computer Networks 2011;55(15):3604e29.

[29] Roy S, Nordell D, Venkata SS. Lines of communication. IEEE Power & EnergyMagazine 2011;9(5).

[30] Fitzpatrick G, Stringer M, Harris E. Lessons for the future: experiences with theinstallation and use of today’s domestic sensors and technologies. In:Fishkin KP, Schiele B, Nixon P, Quigley AJ, editors. Pervasive computing:proceedings of the 4th international conference. Dublin, Ireland: Springer-Verlag; 2006. p. 383e99.

[31] Perumal T, Ramli AR, Leong CY, Mansor S. Interoperability for smart homeenvironment using web services; 2008.

[32] Perumal T, Ramli AR, Leong CY. Interoperability framework for smart homesystems. IEEE Transactions on Consumer Electronics 2011;57(4):1607e11.

[33] Runge M, Quade M, Blumendorf M, Albayrak S. Towards a common smarthome technology. In: AmI-Blocks’09 smart products: building blocks ofambient intelligence 2009.

[34] Friedewald M, Costa OD, Punie Y, Alahuhta P, Heinonen S. Perspectives ofambient intelligence in the home environment. Telematics and Informatics2005;22(3):221e38.

[35] Adami AM, Hayes TL, Pavel M. Unobtrusive monitoring of sleep patterns.Proceedings of the 25th annual international conference of the IEEE Engi-neering in Medicine and Biology Society, vols. 1e4 2003;25:1360e3.

[36] Batista NC, Melício R, Matias JCO, Catalão JPS. Photovoltaic and wind energysystems monitoring and building/home energy management using ZigBeedevices within a smart grid. Energy 2013;49(0):306e15.

[37] EC. Directive on the promotion of the use of energy from renewable sourcesand amending and subsequently repealing directives 2001/77/EC and 2003/30/EC.: 2009/28/EC. European Commission; 2009.

[38] Ofgem. Feed-in tariff (FIT): annual report 2011-12. Annual report to theSecretary of State for Energy and Climate Change. London: Office of the Gasand Electricity Markets; 2012.

[39] CCA. Climate Change Act, carbon targeting and budgeting, chapter 27, part1dthe target for 2050. London, UK: Her Majesty’s Stationery Office Limited;2008. Available from: http://www.legislation.gov.uk/ukpga/2008/27/part/1[accessed 07.01.12].

[40] CCC. In: Change CoC, editor. Building a low-carbon economy e the UK’scontribution to tackling climate change. London: The Stationery Office; 2008.

[41] DECC. In: Change DoEaC, editor. The UK low carbon transition plan: nationalstrategy for climate and energy 2009. London.

[42] DECC. The carbon plan: delivering our low carbon future. London: Depart-ment of Energy and Climate Change; 2011.

[43] CCC. Building a low-carbon economy e the UK’s contribution to tacklingclimate change. London: Committee on Climate Change; 2008.

[44] DECC. The UK low carbon transition plan: national strategy for climate andenergy. London: Department of Energy and Climate Change; 2009.

[45] DECC. Renewable heat incentive. London: Department of Energy and ClimateChange; 2011.

[46] CLG. Code for sustainable homes: technical guide. London: Communities andLocal Government; 2010.

[47] Dowson M, Poole A, Harrison D, Susman G. Domestic UK retrofit challenge:barriers, incentives and current performance leading into the Green Deal.Energy Policy 2012;50(0):294e305.

[48] DECC. Which energy efficiency improvements qualify for Green Deal finance?.Department of Energy and Climate Change; 2012. https://http://www.gov.uk/government/uploads/system/uploads/attachment_data/file/48406/5504-which-energy-efficiency-improvements-qualify-for-g.pdf [accessed 30.01.13].

[49] DECC. Energy consumption in the United Kingdom. London: Department ofEnergy and Climate Change; 2011.

[50] Raw G, Ross D. Energy demand research project: final analysis. London:Ofgem (Office of the Gas and Electricity Markets); 2011.

[51] Bialek J, Taylor P. Smart grids: the broken value chain. In: DECC workshopsummary notes, 3 November 2010. Durham Energy Institute; 2010.

[52] Jackson J. Evaluating smart grid investments at cooperative and municipalutilities in US. Metering International 2011;1:76e8.

[53] Kim J-H, Shcherbakova A. Common failures of demand response. Energy2011;36(2):873e80.

[54] Palmer J, Cooper I. United Kingdom housing energy fact file. London:Department of Energy and Climate Change; 2012.

[55] Ravetz J. State of the stockdwhat do we know about existing buildings andtheir future prospects? Energy Policy 2008;36(12):4462e70.

[56] CLG. English housing survey HOMES 2010. London: Department for Com-munities and Local Government; 2012.

[57] Morland R. Home area network communications and the GB smart meteringprogramme. In: Smart energy conference. Institution of Engineering andTechnology (IET), London, 28 March 2012 2012.

N. Balta-Ozkan et al. / Energy 60 (2013) 361e372372

[58] Whitmarsh L, Upham P, Poortinga W, Darnton A, McLachlan C, Devine-Wright P,et al. Public attitudes to low-carbon energy e research synthesis. RCUK; 2011.http://www.rcuk.ac.uk/documents/energy/EnergySynthesisFINAL20110124.pdf[accessed 24.02.13].

[59] Phillips Y. Landlords versus tenants: information asymmetry and mis-matched preferences for home energy efficiency. Energy Policy 2012;45(0):112e21.

[60] CLG. English housing survey: headline report 2008-09. London: Departmentfor Communities and Local Government; 2010.

[61] Verbong GPJ, Beemsterboer S, Sengers F. Smart grids or smart users? Involvingusers in developing a low carbon electricity economy. Energy Policy2013;52(0):117e25.

[62] Mancini C, Rogers Y, Bandara AK, Coe T, Jedrzejczyk L, Joinson AN, et al.Contravision: exploring users’ reactions to futuristic technology. In:

Proceedings of the SIGCHI conference on human factors in computing sys-tems. Atlanta, Georgia, USA: ACM; 2010.

[63] Ciesielska M, Li F. The connected home: from market barriers to businessmodel solutions. Building the E-world Ecosystem 2011:353.

[64] van Manen P. Cars, trains & hospitals. In: Living PlanIT’s city of things summite M2M explained, 12 June 2012. London: McLaren Electronic Systems; 2012.

[65] Meyers RJ, Williams ED, Matthews HS. Scoping the potential of monitoringand control technologies to reduce energy use in homes. Energy and Buildings2010;42(5):563e9.

[66] Townsend D, Knoefel F, Goubran R. Privacy versus autonomy: a tradeoffmodel for smart home monitoring technologies. In: Conference proceedings:annual international conference of the IEEE Engineering in Medicine andBiology Society IEEE Engineering in Medicine and Biology Society conference,2011. 2011. p. 4749e52.