An initial question might be the front of what?  Think of a war correspondent.  For many this protracted economic downturn, and its’ impact on our organizations, sometimes feels like an armed conflict and the title seemed appropriate. Comparing business to war is not a new idea; Sun Tzu’s Art of War has been used to craft market strategy for some time.  However, another aspect of this analogy is that trade shows and conferences also seem like the front lines where competitors face off against one another. From this author's perspective though, conferences are exciting because new ideas, products and strategies create a palpable buzz in the air. With that in mind, it seems appropriate to make some observations about the buildings industry.  Beyond the AHR Expo, there is a continuing emphasis on energy, more particularly electricity, in the industry as a central theme in the application of and expectations for automation systems.  Interestingly there was another event the same week as AHR that is growing in significance as well; Distributech.  That may be a new name for some, but upon walking both shows, one is struck by how companies are exhibiting at both, and offering the same automation and middleware products with slightly different applications to both audiences. A reasonable argument could be made that in fact the audiences are really the same; building owners, engineers, contractors, integrators and utilities.

With that introduction in mind, the intent here is to provide mention of a few significant trends for 2012 that seem evident based after walking both shows.  Many more ideas spring to mind while putting the seemingly endless array of products into perspective, but the real question is; why should you care.   What significantly impacts will these trends have on the Building Automation System (BAS) world in 2012 and how should building owners, integrators and manufacturers plan to succeed in the face of these trends?

Clearly there may be some bias here toward the nexus between energy and automation, but most building owners and suppliers seems to agree.  So here are three trends that I believe will be impactful this year:

• New construction will not recover, thus retrofits will remain the focus and project creativity is key.
• Electricity Capital will continue to be a growing force in funding projects through Demand Response, Rebates and Market based programs as well as on-bill financing, etc.
• The lines will continue to blur between traditional automation / DDC, Visualization tools or dashboards, Analytics, Metering, Energy Management and Maintenance tools. This will continued to be enabled, at least in part, by the growing number of platforms, frameworks, etc., but also by manufacturer’s efforts to consolidate and differentiate.
  

Taking these trends individually, a place to start is the dismal outlook for new construction. In October, McGraw-Hill Construction, part of The McGraw-Hill Companies, released its 2012 Dodge Construction Outlook, and predicted that overall U.S. construction starts for next year will remain essentially flat. McGraw-Hill said that construction starts in 2012 were expected to be $412 billion, following the 4% decline to $410 billion predicted for 2011. This isn’t new information, and for quite some time we have seen countless stories in the trade press about how companies are gravitating toward retrofits, with a particular focus on energy efficiency.  A driving force for automation is to use the technology to help customers reduce operating costs and to use the savings to pay for projects.  Since those customers still have to have a way to pay for the retrofits, there has been a resurgence of Energy Services and other creative approaches to project justification and finance based solutions.  It is essential to making projects bankable, which leads to the next trend.

Electricity Capital is the author’s term for a relatively new funding option.   Electric utilities across the country are creating all sorts of mechanisms to promote implementation of energy projects in buildings.  This is happening for a host of reasons including: Renewable Portfolio Standards, Commission Mandates, forecasts that predict electricity demand to grow as economic recovery unfolds, etc.  One example to begin with is that a number of utilities, both electric and gas, offer  on-bill financing for efficiency projects including BAS.   Quite simply this means that the building owner may be able to finance a building automation or other efficiency measure on the utility bill.  Similarly Property Assessed Clean Energy (PACE) has been reborn as a way for building owners to fund such improvements by increasing their property tax.  Again the Energy Services business is heating up and many Energy Service Companies (ESCO’s) are teaming with automation contractors and integrators to provide turn-key solutions.  Of course many building automation manufacturers are already ESCO’s, but more BAS contractors are also learning to deploy this solution all the time. 

Electricity Capital also includes a wide range of programs like Demand Response (DR) that pay customers to respond to curtailment events through deployment of strategies in the BAS to shed load. OpenADR™ is the standard developed at Lawrence Berkley Labs, which many are aware of, but a number of exhibitors at AHR and Distributech were touting that they were integrating OpenADR into the BAS just like BACnet™ or LON™.  Some manufacturers are also providing pre-programmed Demand Response Algorithms.  Working with customers to deploy DR creates a revenue stream that can fund a BAS.  One DR provider has even completed a series of projects with a multi-location customer, in which they are paying for DR enablement and a new BAS with Electricity Capital.  Under this model the owner gets the technology installed with no upfront cost and is able to finance the deployment and repay it through DR payments from the utility over time.  Stay tuned because Electricity Capital will grow to include a wide range of additional funding mechanisms for the savvy owner and provider.

[an error occurred while processing this directive] The last trend that will impact the buildings world in 2012 is the proliferation of products, software, services and solutions that are combining under one umbrella.  A number of larger companies are expanding their breadth to offer a broad spectrum of products beginning with the switch gear and meters, even distributed generation (yes it is back), and extending through traditional BAS to analytics and dashboard visualization tools.  There will be significant challenges for the industry in unifying the right set of tools without simply choosing one vendor to provide everything. It is not just about HVAC anymore either.  There are hosts of lighting solution technologies that can integrate at the BAS level or the Middleware layer, and building owners are going to want these systems unified for building and energy management.

With the advent of wireless controls for fluorescents, electronic High Intensity Discharge (HID) controls for metal halide and the growing penetration of LEDs; automation is even more critical. Add to these systems the growing penetration of renewable energy with Solar Panels on building roofs, carports and ground-mounted. Building owners want revenue grade meters to tell them how much they are producing and help them do measurement and verification on utility bills and for Electricity Capital funded projects. The intent here is not to describe all of this technology, but to point out that the lines are blurring and building owners need solution providers that can help them make sense of all of this technology. Integration at the building level for management as well as participation in DR and other programs is just the start; the systems still need to be Web-enabled.  There is a great deal of new standards work underway as well. As a result of the Energy Independence and Security Act, there will be an array of new standards hitting the industry that we all must learn.

This article is intended to provide food for thought in a changing world. Readers of automatedbuildings.com tend to recognize the importance of keeping pace with new technology; the hope is that this article may point this forward thinking group toward some trends that are worth further exploration.

About the Author
Jack McGowan is President of Energy Control Inc. (ECI), an OpTerra Energy Group company.  He is Chairman Emeritus of the U.S. Department of Energy GridWise Architecture Council, and was Founding Co-Chair of the National Institute of Standards and Technology Building to Grid Working Group.  ECI won a 2008 American Business Award sponsored by Dow Jones and the Wall Street Journal as Best Overall Company in the U.S. with less than 100 employees.  McGowan is author of 5 books on Fairmont Press and Prentice Hall and over 200 articles. McGowan is an internationally known energy, buildings and technology expert, and was chosen by his peers as 2006 Visionary at the Builconn Intelligent Buildings event. He was named Newsmaker of the Year by automatedbuildings.com in 2007. The Association of Energy Engineers admitted him to the “International Energy Managers Hall of Fame” in 2003 and named him “International Energy Professional of the Year” in 1997. He also sits on Technical Advisory Boards and is a Contributing Editor with several magazines including Engineered Systems, Green Intelligent Buildings Today and www.automatedbuildings.com .

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