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Smart Home Controls 2013 - Germany

  • October 2013
  • -
  • BSRIA Worldwide Market Intelligence
  • -
  • 87 pages

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Smart home market: The German smart home market still has not taken off and could be by now described as only having developed as a niche market. Only the high-end segment of the market is occupied. There is still no mass market. In 2012 it grew to €230 million (€310 million with installation) from €180 million (€240 million with installation) in 2010. Much less than the industry had predicted.

Main share-holder in the existing market for most installations is still the commercial sector accounting for 75% of installations. The residential sector has a 25% share in which luxury housing dominates. We believe the major hold-back preventing the smart home market to kick-off into a mass market is the missing support by the Government to provide mandatory regulations for smart meter roll-out. National smart meter coverage and a smart grid are the ground on which a smart meter mass market would develop at a fast pace. Without a clear mandate the roll-out will be rather evolutionary than revolutionary (e.g.: it took the car industry two years to have air bags in every car after mandatory regulation for air bags was introduced. It took over twenty years to establish a common standard within the building automation sector without any Government regulations). Other thresholds in the existing market are high prices, sceptical or low educated end users about smart home benefits and to a certain extent not enough skilled installers.

The existing high-end smart home market in Germany is dominated by the electrical installation industry offering high quality KNX based smart home systems. Four other industry sectors have worked independently on smart home solutions with little impact on the market so far: energy providers, telecoms suppliers, IT and building automation companies. Their systems all use different communication standards making it difficult to connect them without appropriate gateways. Amongst these other industry players RWE is the best known name in Germany due to a massive marketing campaign.

Within the high-end segment representing the existing smart home market KNX is the prevailing protocol. It is available both as wired and wireless system. There are a few remaining proprietary protocols with little market influence. Other wireless protocols include ZigBee, EnOcean and Z-Wave. However, KNX is seen by part of the industry as a high cost solution and initiatives like Connected Living claim that the struggle for a common standard protocol has not finished and offer their protocol called ‘Click’ as a common standard. Deutsche Telekom will launch their platform ‘Qivicon’ in Autumn 2013 based on OSGi Alliance middleware, pushing it to become common standard.

On the other hand the common standard to connect the smart home environment to smart grid the EEBus is seen as the favourite in Germany. EEBus Initiative already has 33 members in Germany and plans to go global. Most smart home installations go into new housing while refurbishment of existing housing stock, which holds the largest potential is developing very slowly. To open the mass market competitively priced, cost-effective solutions, most probably wireless-based with a common standard need to be introduced. The most common applications in a smart home system are lighting and blinds control followed by room automation of heating and ventilation, fault alarms, timers and remote control.

Home Energy Management System (HEMS): The HEMS market in Germany did not show much development.
Main reason was the changed legal position with redefinition of smart meters holding up the roll-out of smart meters. Energy suppliers were holding back with further initiatives other then their current pilot projects. Leading suppliers focus on their main smart home project and see HEMS as niche product, to be replaced by functions of their smart home system. Other independent smaller HEMS suppliers report sales as one put it “on a homeopathic scale”.

National roll-out of smart meters is needed as a base for a developing strong HEMS market. The German market will need to wait for a few year until the roll out of smart metering is on track. At the moment penetration is far below 3% of household with smart meters installed. German HEMS market will not kick-off before roll-out of smart meters. Afterwards, we believe HEMS will become an established niche market.

Intelligent Residential Environmental Controls: The German market for intelligent residential environmental products is valued at € 45 million in 2015. It includes intelligent thermostats, automatic radiator valves, sensors, and heating controls. This market is dominated by DIY products. The majority of products are sold to the end-user via retail channels and online shops. Most of the intelligent residential environmental controls are wireless, based on a proprietary communication protocol, with limited functionality compared to, for example, KNX products.

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