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Three trends in smart buildings and smart homes - the 'new normal' where everyone benefits

This blog has been written by Cozify CEO Kimmo Ruotoistenmäki.

Smart buildings and smart homes are rapidly becoming the "new normal". In the longer term, all parties will benefit from this development – residents, owners, construction, and real estate professionals and, of course, the environment. There are three trends behind the development, which I will go into more detail below.

Trend 1 - Smart homes are already relevant to mass consumers 

You don't have to be a computer geek or a rich detached homeowner with the latest expensive technology to have a smart home. I mean smart in the context of bringing technological solutions to a property, thereby improving the environmentally friendliness of housing and making it more human-centric.

An increasing number of consumers are interested in the smart home's potential to improve the comfort, safety, and energy efficiency of housing. Based on my experience, I dare say that around 30% of consumers know how to demand smart solutions from a developer or property owner in their home. The only challenge in this equation is that while construction professionals already have an interest in building smart properties, most lack a deeper understanding of their benefits. Also lacking is an awareness of what they should do and who could help them to get the right kind of secure solutions. I’ll admit that there is also a place for me here to look in the mirror.   

The great thing about increased consumer interest is that the supply of smart home solutions has increased. Smart home installations are no longer individual pilots, rather now different operators have standardized their own delivery concepts. An example of this is that a builder can standardize smart solutions as part of their HVAC plans. Standardized delivery protects builders and property owners as construction legislation requirements and the requirements of residents increase. The property owner benefits from standardized cost-effectiveness in construction and renovation projects and, at a later phase in the life cycle, through increased property value. This brings us to the next trend of incentives and regulation in the construction industry.  

Trend 2 - Legislation requires increased smart technology and climate-friendliness  

The Finnish State and the European Union have increased incentives and regulation related to the climate-friendly nature of buildings and housing. Depending on the calculation method, construction and real estate generate almost 40% of all CO2 emissions in the world (Construction Industry RT ry). The aim of the regulations and incentives is to support our journey towards carbon neutrality. The impact can already be seen from the increased interest of property owners and financiers in energy-efficient construction.

An example of regulation is the Water Consumption Individual Billing Act, which is the background to the European Union Energy Efficiency Directive. The Water Consumption Act applies to new buildings and multi-dwelling buildings due to be renovated, which must have the possibility of remotely reading water consumption meters per dwelling. The act also requires that the water bill for housing companies is based on measuring consumption per dwelling in the future, and the bill consists of the amount of water used and the amount of energy used to heat it. Another example of new regulation relates to energy communities, which I already wrote about in a previous blog.     

But builders and property owners can only respond to regulation if they have smart construction and home technology under their control. Most of them don't have the technology yet. An additional challenge is that smart technology is installed in product-specific silos and building technology systems can very much overlap with each other. For example, one may have several different temperature controls; one for underfloor heating, one for air circulation cooling, etc. In this case, the technology rises against itself, eventually causing a headache for all parties involved. This brings me to the third trend of security.

Trend 3 - The alliance of technology, intelligence and security must be strong

In a smart home, systems are connected via the internet. This is a huge opportunity, but at the same time a big danger if technology and smart devices are not up to date. Traditional building technology is typically thought to be "safe" from the dangers of the internet or hostile hackers, without any specifically thought-out protection. The reason: systems have been local with no contact outside the building.

Today, the situation is different - old and new systems are increasingly being connected to the web for remote monitoring and management. If data security is not considered both in product design and in the design and installation phase, traditional solutions will be particularly vulnerable to the dangers of the internet. I see that real estate technology as an industry may not recognize these dangers or know how to protect against them.   

Of course, the consumer, or even the builder, cannot begin to know all the technical details regarding information security, nor do they need to understand it in depth. One good example of progress is Traficom's security label, which has been established for this need. The brand guarantees to the customer that the security of the product has been genuinely considered. I would love to see that the Information Security Label and similar concepts would help both builders and consumers to choose genuinely reliable secure solutions.  

We will delve into the above trends in even more depth in our upcoming blogs. I believe that these themes really matter towards establishing the "new normal" of a smart building and home. 

Kimmo Ruotoistenmäki
Cozify, CEO

Energy communities are key to the smart electricity grid of the future

Kimmo Ruotoistenmäki, CEO of Cozify, opens his blog with why energy communities are currently a hot topic.

Energy communities are currently a hot potato in the industry. If you are not familiar with the term itself or why the topic is being discussed right now, then let me begin with an overview of the phenomenon. 

Single-family households have long been able to produce their own electricity with, for example, solar panels and sell any excess electricity to an energy company. For housing companies, the transition to self-produced solar power has been slowed down by legislation that has made it difficult to utilize the electricity produced other than for communal use. Solar panels have therefore not reduced the electricity bill for housing company residents since self-generated electricity can only be utilized in common areas such as corridors and shared rooms. 

It has come down to profitability. Solar power plants haven’t been interesting investments for housing companies, as after the electricity tax and the electricity transmission fee, self-generated electricity would be more expensive than “ordinary” electricity. 

The energy community – a housing company producing its own energy 

Now things are different. The new legislation, which came into force at the beginning of 2021, will enable residents of blocks of flats and terraced houses to combine electricity production and consumption and distribute the benefits of surplus production to residents. This is guaranteed by the energy community. 

The energy community is a form of sharing economy in which the shareholders of a housing company share the benefits of electricity produced with solar panels amongst themselves. The shareholders therefore set up a local energy community within which electricity produced by a non-financial company can be distributed to the community members without any administrative or network costs. 

The result? Cheaper energy. 

And looking at the bigger picture, so much more. 

The smart energy network – virtual power plants meet demand 

Because there is currently a great need for renewable energy production, I see a lot of potential in the energy community. As we move away from fossil fuels, electricity use will increase. Or rather, the proliferation of new technologies means that everyday life becomes ever more dependent on electricity. Electric cars are becoming more common, as are solar and wind turbines in housing communities. 

This change is pushing us towards smarter energy consumption, where energy communities will play a major role within the electricity system. By this I mean that, as energy communities grow in the future, they will have the potential to become virtual power plants with the capacity to produce, sell, buy - and even store energy during a profit spike. It should also be noted that the virtual power plant does not focus solely on electricity network solutions. Ideally, the solution manages and optimizes the sharing of several forms of energy, such as mains power, solar power, and district or geo-heat. 

The virtual power plant balances the total energy production needs and network load by, at certain times, using less energy from the grid. For example, on a frosty day, when energy needs are at their highest, the property uses energy stored in a heating well instead of expensive mains electricity, and perhaps even receives compensation from the network operator. 

Building demand-response into the energy community is a very high priority for Cozify. We want to be involved in building a smart energy network where efficient tech solutions can control household energy consumption without compromising everyday comfort. At the same time, the balance of the entire energy system is maintained. In this way we are doing important work combating climate change. 

Energy for autumn!

Kimmo Ruotoistenmäki
Cozify, CEO

PS. If you are interested in energy communities or building a site with demand response and rational energy production at its core, please call me on 040 352 8898 or email pro@cozify.fi and let's talk some more.