Microsoft's Hohm Enters Crowded Home-Energy Monitoring Market

(MoneyWatch)  Microsoft leapt into the increasingly-crowded home-energy management market this week with its release of Hohm, a free Web application designed to help customers monitor and ultimately conserve energy use.

The software giant has been working on the Web tool for two years now and its unveiling follows on the heels of rival Google's PowerMeter.

PowerMeter and Hohm are both free and have essentially the same goal of helping people curb energy use and save money. They just reach it in different ways.

PowerMeter works by taking information from a smart meter installed in your home, tracking energy consumption and then sending the data to a customer's iGoogle homepage. Google is already working with a number of utilities on this program as well as smart meter maker Itron. Microsoft, on the other hand, uses advanced algorithms licensed from the Lawrence Berkeley National Laboratory and the Department of Energy. Basically, these analytics do all the heavy and complex lifting, and turn it into useful, easy-to-understand information for the user.

When Hohm goes live next week, the offerings will be fairly straightforward. A homeowner can type in a Web ID and zip code to see average energy use in their region or nationally. From there, users can drill down even further by answering 200 questions -- like your brand of water heater and square footage of your home -- aimed at providing Hohm with all the information it needs to help curb energy usage. So, I might learn that my windows, which are old and drafty, needed to be replaced or at least caulked.

Here's where Hohm doesn't quite stack up to Google's PowerMeter. There is really no way -- at least in its initial phase -- to track and analyze energy consumption data from your energy provider. Microsoft is working with four utilities -- Puget Sound Energy, Sacramento Municipal Utility District, Seattle City Light and Xcel Energy -- to change that. Eventually, customers of these utilities can upload their energy data into Hohm for more accurate, detailed information.

Microsoft also is working with Itron, which makes me think they're the big winners in all of this. Itron's had a big week. The company announced Wednesday it is working with Comverge to develop an interactive, two-way communication between utilities and customers. Itron's advanced metering has been integrated into Comverge's Web-based demand management software.

So how much room is there in this burgeoning home energy management industry? In short, it's getting tighter every day.

Google and Microsoft are far from the only companies developing home-energy monitoring products. There are a number of start-ups and big, established companies like GE building energy management tools including the smart meter, management software, and energy dashboards. Earth2Tech has a nifty list of home energy management companies including Tendril, Onzo, EnergyHub and Greenbox. Silver Spring Networks, smart grid networking start-up, recently signed on with Sacramento Municipal Utility District to install its technology into Landis+Gyr meters, which will reach 600,000 customers.

Telecommunication companies like Verizon, with its plan to add home energy management to its FIOs broadband offerings, have also joined in, as Greentech Media notes.

I don't see how all of these companies can survive. Google and Microsoft have the money and programming capability to lead the software end of things. Plus, the public -- the folks who will actually use the product -- already know these companies. From here it boils down to availability. As both Google and Microsoft ramp up their relationships with utilities, the race to be home-energy management leader is going to get a lot tigher.