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New SHEMS Specification Has First Market Test in 2020

Neil Strother
Dec 30, 2019

Smart Home 3

The US Environmental Protection Agency’s smart home energy management system (SHEMS) specification will get its first real market test in 2020. The industry-backed specification falls under the jurisdiction of the ENERGY STAR program and, as highlighted in a previous blog, the specification is likely to become a pivotal marker in the evolving US smart home market as service providers roll out systems to customers.

SHEMS Basics

The SHEMS specification aims to establish required energy-saving features that lower costs while also being convenient for residential users. It describes a package of devices and services for the industry, but it should not be seen as a single platform nor a single product. Instead, the SHEMS specification is meant to provide a way for service providers to explore business models within a standard framework while in partnership with the ENERGY STAR program. Smart home device manufacturers are encouraged to partner with service providers as part of a certification process.

The overarching goals for SHEMS are the following:

  • To ensure devices operate efficiently, and only when needed (the seamless optimization of energy use, storage, and production while also balancing cost, environmental impact, and convenience).
  • To provide an outstanding customer experience.
  • To encourage interoperability and security by relying on industry standards and best practices.

Version 1.0 of the SHEMS specification, which is viewed as a stepping stone, took effect in September 2019. The first certified SHEMS packages are expected to enter the market sometime in 2Q 2020. The development of an energy-savings metric (and performance levels) for version 2.0 (V2.0) of SHEMS is not expected until 2021. Once that is established, SHEMS V2.0 is likely to take effect in 2022 or 2023.

Added Functionality

As it evolves, SHEMS aims to add functionality for smart water heaters, optimize time-of-use pricing, and integrate grid services like demand response. One area also getting attention from some industry players is around SHEMS and advanced lighting systems, a category full of change. Terry McGowan, director of engineering and technology for the American Lighting Association states that these new systems will “Give homeowners a very different way to manage their lighting [so they can] enjoy the best that lighting can offer...lighting is an essential element, from a utilities standpoint, from a consumers’ standpoint, from our industry’s standpoint.”

The SHEMS specification should help the smart home market expand in the US, but one can reasonably expect speed bumps along the way. Blending hardware and services together and setting standards is more complex than rating appliances or devices alone, something ENERGY STAR has managed well. Effectively marketing SHEMS to consumers is likely to prove challenging. Even though many people have purchased smart home products, there are millions of others who have not, and they remain skeptical about the value of these products and are concerned about data privacy issues involved. SHEMS does not initially specify an energy-savings metric, which needs to be addressed as soon as possible. For more details about the smart home market see Guidehouse Insights, a Guidehouse company’s report, The Smart Home Overview.