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OpenControl Building by Group OpenControl

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We will leverage the market for demand response to enable widespread adoption of home energy management systems



Buildings consume more than 39% of all energy consumed in the U.S. each year. More stringent building energy codes and advances in lighting and HVAC technologies have reduced the energy use intensity of buildings. A study by the EIA indicated that new homes built after the year 2000 are on average 30% larger than homes built before the year 2000, but use only about 2% more energy (EIA, 2013). Energy Used in Buildings

As construction standards improve and more efficient equipment is installed in homes, additional savings must come from improving the way we control the energy-consuming equipment in the home. Home Energy Management Systems (HEMS) can optimize the energy use within a home by coordinating the timing of lighting and HVAC systems, as well as an increasing number of “smart” devices. Additionally, HEMS systems can benefit both homeowners and grid operators by increasing the ease and compliance with demand response events.

One of the primary challenges of implementing a HEMS system is the upfront cost to purchase and install the equipment. Additionally, the large variety of technologies on the market can create choice paralysis that makes it difficult for consumers to select and implement a system for fear that they are betting on a system that will not integrate with future technologies.

We propose promoting the widespread implementation of Home Energy Management Systems by providing simple systems at no cost to homeowners in exchange for their participation in automated demand response events. We will install a smart thermostat and a few simple controls in homes and provide homeowners with a secure platform to integrate our controls with other smart devices they may have in their home. Homeowners will then have the nucleus of a HEMS system – provided free of charge – to which they can then add additional components to outfit their smart home. 

What actions do you propose?

We propose starting a company that supplies a smart thermostat and a few simple controls to homeowners to form the core of a Home Energy Management System. These systems will be supplied to homeowners free of charge with an agreement to participate in automated demand response events. Our revenue to cover the costs of these systems will come from grid operators, who will pay for demand reduction during times of peak demand.

When a demand response request is received from a grid operator, we will be able to reduce the HVAC load in participating homes automatically without homeowner intervention and with minimal homeowner impact by setting back the thermostat a few degrees. The system could also be expanded in the future with additional controls for lighting and plug loads to further reduce energy consumption during peaks.

Homeowners will benefit from the platform we provide to form the core of a Home Energy Management System that can integrate all smart devices in their home and incorporate future technologies such as solar photovoltaics, behind-the-meter energy storage, and electric vehicles. The development costs for the platform will be covered by the revenue generated from demand response contracts. We will develop a strong platform in order to provide an enticement to homeowners for participation. 

Who will take these actions?

We will start a company that will form contracts with Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) to provide demand response services through our network of homes equipped with smart controls. We will recruit homeowners in the grid service area to participate in the program and receive a smart thermostat and simple controls in exchange for participation in demand response events.

This product will be attractive to homeowners who are interested in installing a Home Energy Management System, but cannot afford the upfront investment to install such a system. We will provide the core of the system free of charge and the homeowner will be able to integrate other smart devices with the platform that we provide so as to create a robust Home Energy Management System.

Where will these actions be taken?

Our platform will be implemented in the service territory of participating grid operators. Any home with internet access and electric heating and/or central cooling within the service area can participate. Ideally, we will form contracts with all grid operators in the United States and be able to reach any home in the country.

How much will emissions be reduced or sequestered vs. business as usual levels?

Though the reduced or sequestered emissions will vary based on the building, environment, user parameters and the demand response characteristic, we can make some clear observations:

The use of automated controls in a building has proven a 30%* (average) increase in residential efficiency and a 40%* increase in efficiency for small to medium commercial application. Our proposal allows a mechanism for these expensive controls to be offered free of cost - possibly distributed with home energy assessments and in co-operation with utility programs!

Electricity is known to have a higher carbon content during peak time and the use of our demand response system will shave these peaks, allowing for a relatively cleaner grid.

The demand response system can also counter-balance distributed generation with a micro-grid application allowing for the further adoption of micro-grids.

*See references below

What are other key benefits?

The benefits of our proposal are that it:

  • makes Home Energy Automation Systems available to the residential market at (potentially) no cost

  • can allow the residential sector to advance to a demand response market without utility or policy barriers

  • allows users to take part in lowering the carbon content of grid electricity

  • will save ratepayers money

  • could control other aspects of the building via logic and open source functionality

What are the proposal’s costs?

Costs include the HEMS unit and installation, which could be subsidized by utility efficiency programs.

The other costs will be business related: marketing, creating utility partnerships, creating a secure network platform that can communicate with demand response operators and a residential customer service team.

A significant cost will be the security upkeep of the system. Our proposal will offer the highest levels and testing of:

  • Cross-site scripting (XSS)
  • Cross-site request forgery (CSRF/XSRF)
  • SQL injection (SQLi)
  • Alert/notification spoofing
  • Authentication/authorization for devices or clients
  • Remote code execution
  • Wireless vulnerabilities 
  • Data exposure


As we develop the market and choose to partner with certain HEMS manufacturers, we will transfer some of the security responsibilities to the manufacturer’s development team to oversee security risks in cooperation with our internal team.

Our model allows for the demand response revenue to cover these costs and the remaining cost of install over the term of user contract. The demand response market, user preferences, and length of term will determine the level of payback the ratepayer can expect, if any. 

Time line

Within a year, our team can have a robust concept ready and can start to offer beta installations to a test pool of users. We can then take this sample pool and feedback and propose partnerships with HEMS developers like NEST, SmartThings, Trane, AND utility and efficiency programs.

Within two years we hope to be approved for utility efficiency rebates, programs and incentives to further our value proposition to the ratepayer. 

Long-term, we expect this technology to be the tool that links environment, energy and economics when the public thinks about buildings. We expect this type of technology to be standard in any new home or building. We expect regulatory commissions like ISO-NE and FERC to look to the residential market as a way to control grid demand. 

Related proposals

All topics relating to policy change, building automation, efficiency design, renewables, and behavior and social change can be benefited from this residential smart demand response platform. 


Intille, S., Designing a Home of the Future, IEEE Communications Magazine, April 2002. P80-86.

Gomez, C., Paradells, J., Wireless Home Automation Networks: A Survey of Architectures and Technologies, IEEE Communications Magazine, June 2010 P. 92-101.

Bollinger, B., April 2015 Welfare Effects of Home Automation Technology with Dynamic Pricing. Retrieved from:

Chinta, R., Fong, R., Murdock, I., Kang, W., Williamson, Q.,  2014. A Novel Approach to Home Automation: Application Development with Google Glass. Retrieved from: