How IoT Affects Sustainability and ROI

In 1950 author Ray Bradbury wrote about an alarm clock telling a homeowner the current date, whose birthday fell on that day and what bills were due. Bradbury’s fictional novel took place in 2026.

But the author was a few years off.

As Paul Marushka, president and CEO of Sphera Solutions, noted in a keynote speech at last week’s 2017 Environmental Leader Conference and Energy Manager Summit, now, if you’re out of Coca-Cola, the Amazon drone will know and deliver the soda right to your front door. Not to mention the smart devices manufactured by Google, Amazon and Nest Labs.

“A lot of the futuristic-sounding things the speakers here are talking about are not too far out there,” said Marushka. And most, he implied, will be powered by the Internet of Things (IoT).

Marushka, quoting technology pioneer Kevin Ahston, said IoT has the potential to change the world, just as the internet did. Maybe even more so.

And IoT has clear momentum. According to Marushka, there will be 200 billion IoT devices by 2020. Even our smartphones can become IoT devices. So what’s really driving this? The speaker credits:

1. Our devices
2. Connectivity – 5.5 IoT connections made daily in 2016, thanks to wifi
3. Platform to aggregate that data
4. Analytics/big data, and the ability to mine that info and act upon it

“It’s not just consumers acting upon these four parameters,” Marushka said. “The utility space is acting on it, too.”

In fact, there are now 925 million smart meters, 2.54 million smart lights and 1.53 billion utility-managed connected devices.

“We can manage energy consumption much more smartly than we ever have in the past,” he said. “From the corporate perspective, sensors are driving this. The cost of sensors has dropped dramatically from $1.30 in 2004 to what will be $0.38 in 2020, making it less expensive for corporations. The message here is the trend isn’t going away. In fact, it’s going to accelerate.”

According to survey results Marushka shared, the adoption plan for IoT consists of the following:

• 27% Expect to start investing in IoT technologies in the next 12 months but are still establishing a budget
• 26% Do not expect to invest in IoT technologies in the foreseeable future
• 21% Do not expect to invest in IoT technologies in the next 12 months
• 10% Have made significant investment already and expect it to increase in the future
• 8% Have established a budget for IoT technology investment in the next 12 months
• 5% Have made significant investment already and expect it to stay the same for the foreseeable future
• 3% Have made significant investment already and expect it to decrease in the future

As Marushka shared, 70% of the world’s energy is used by cities. Equipping street lights with sensors and connecting them to the network, cities can dim lights to save energy, only bringing them to full capacity when the sensors detect motion. This can reduce energy costs by 70-80%.

But making a business case for IoT doesn’t always come easy. According to Marushka, the top challenges for investing in IoT include:

• Building a business case (34%)
• Funding (32%)
• Standards (23%)
• Understanding what IoT is and how it applies to your business (22%)
• Security (20%)
• Company culture (15%)
• Data gathering from legacy systems (13%)
• Gaining insight from big data (12%)

As an example of the impact of IoT on reporting, Marushka highlighted the following case study from CenterPoint Energy, a Houston-based energy delivery company.

At CenterPoint, an environmental management system was used to enhance the company’s reporting capabilities under its greenhouse gas program. That system:

• Reduced time required for GHG reporting to 2 weeks from 2-3 months
• Mitigated risk of noncompliance with automated alerts when permit limits are approaching
• Instead of having to manually type in data, the information comes from tools such as electronic flow meters

“As more municipalities and more utilities began to implement this, we’re going to see a huge savings,” Marushka said.

He added that 33% of thermostats sold in 2014 were wifi enabled. This number will climb to 75% by 2019. Further, 97% of respondents in manufacturing said IoT is the most impactful technological initiative in the manufacturing industry today.

“Iot will help lead the U.S. consumer tech industry to a record setting $287 billion in retail revenue,” Marushka said.

So what does it mean for those in attendance at the conference?

“It means various departments really need to collaborate because it affects everyone,” he said. “It’s going to be pervasive across the entire organization. If your organization has a CSO, it is a huge opportunity to get real-time data across an organization and report back about how sustainable your organization is.”

In 2008, 81% of organizations were reporting. And in 2011, 95% were reporting.

“Sustainability reporting is very much like financial reporting,” Marushka said. “In years past, we couldn’t get real-time data. Now, companies are aggregating high-frequency data. So you can manage it, analyze it and report it. Data is no good if you can’t act upon it.”

The key to IoT making a difference, he said, is it needs to be intelligent, actionable and relevant.