The convergence of climate, technology, and new business models is transforming household water management. While only making up 12% of water usage, globally, household water management is now emerging as a discrete opportunity across a range of key stakeholders, from technology vendors to insurance companies to property developers, to address critical concerns including leakage, water quality, and inefficiencies.
In the wake of millennium droughts and paralyzing winter storms, residents are becoming increasingly aware of their water footprint. A recent Whirlpool study showed 51% of surveyed customers value energy and water efficiency. Nearly half of the participants voiced their want to reduce their water consumption. Bluefield has identified a few drivers behind this change in consumer awareness:
- Remote work trend placing greater focus on the home, appliance upgrades, and renovations. So far during the pandemic, homeowners have spent 3% more on home improvements, additions, and repairs that have totaled almost US$433 billion. This bump in household spending is also driving the adoption of more advanced appliances (i.e., internet connected), more efficient bathroom fixtures, and smarter lawn irrigations systems.
- Drought-related policies influence consumer behaviors. More restrictive water conservation policies and customer education programs, such as those in Australia and California, demonstrate the potential gains to be made in targeting lower household water usage. While water conservation rules typically limit activities such as lawn watering and washing sidewalks, they are critical in creating awareness of the value of water.
- Water rates in the United States have been on the rise. Average monthly water bills have increased by 43% since 2012. Higher costs of water may influence residents to reduce their water use by cutting unnecessary use such as lawn watering or installing more efficient appliances. With more than half of residential water bills associated with sewer services, limiting the inflows is the primary route to limiting the outflows and lowering water bills.
Amidst these acute shocks to the household environment, a wave of technology innovation is poised to alter the future of water in the home. New tools being deployed include smart(er) water meters, in-home data communications platforms, real-time monitoring of water quality and leakage. These tools are being developed to give homeowners, water utilities, and other stakeholders (e.g., insurance companies) greater visibility into household water usage and risks. It should come as no surprise that competition for customers seeking improvements in water usage and financial benefits has compelled the multinational vendors to incorporate water-focused advancements into their dishwashers, laundry machines, and bathroom fixtures.
Here are a few examples:
- Appliance vendors are making it easier to track water usage in the home. Moen recently announced its smart water network, allowing residents to monitor water usage, detect leaking pipes, control temperature and water use, all on the Moen Smart Water App. Leakage accounts for approximately 12% of indoor daily household water use in the United States.
- Insurance companies are stepping up water-related strategies to incentivize more advanced in-house solutions to potentially offset property damages and financial losses. To date, Bluefield has identified 23 insurance companies leveraging vendor partnerships to gain more understanding of domestic water risks.
- Governments are promoting water conservation programs. Programs such as WaterSense in the U.S., have partly influenced declines in water usage by promoting more efficient appliances and fixtures (e.g., shower heads, dishwashers). At the same time rebates offered through water utilities and governments can promote installation of water-saving appliances or systems in households.
- Utilities are partnering with firms to install smarter water meters. The U.S. is projected to reach 85% residential smart meter market penetration by 2030, leading the smart water meter transition. While smart meters can aid in reducing water consumption, they also provide real-time insights into the household water usage, including leakage and incorrect billing.
- Water industry players are leading the way for water reduction in the home, through production of water-efficient solutions and public outreach. The 50L Home initiative allows these key players to collaborate with the goal of reducing residential water use. Members of this initiative include Kohler, SUEZ, Procter & Gamble, Electrolux, Grundfos, Arcadis, and Engie.
- Big Tech’s role in water is in its infancy but recent initiatives by Amazon signal that changes could be in the mail. The growing penetration of Big Tech into the home is a precursor to anticipated change. Among its peers—Google, Microsoft, Apple—Amazon has been the most proactive by launching data communication systems (e.g., Sidewalk) and asset management tools (e.g., Monitron) to support the municipal networks of assets.
Despite domestic water’s smaller share of total water usage, versus agriculture and industry, the fragmented and complex landscape of household water management is no longer an afterthought for improvement. Certainly, new technologies are enabling this change, and the financial risks are real for a myriad of stakeholders. For this reason, the next decade is expected to usher in a host of new market entrants and business strategies to address water in the home.
For more analysis on this topic, see Bluefield’s Insight Report: Domestic Water Usage: Drivers and Emerging Trends for Advanced Water Management in the Home.