Clark's Remarks

Google and HVAC

It often is said, “Google can do anything!” In fact, a learned colleague of mine—a practicing electrical engineer—thinks we should give Google all of the world’s (or at least our country’s) problems to solve. And he’s only half-joking.

Clearly, Google has more than conquered the Internet. In addition to its obviously huge core business—its search engine—it has multiple software products for productivity and social networking. And Google is not only in the cloud; many believe Google is the cloud! Google enjoys mega revenues from its online advertising technologies, it has danced with electronics giants such as Motorola, and, with the formation of Calico, it is heavily into biotechnology. It just goes on and on.

Google has had a few flops, but not many. For our industry, Google’s most notable failure probably was Renewable Energy Cheaper Than Coal (RE<C). This was a research-and-development project, funded by Google’s private foundation, charged with bringing the cost of renewable energy below what Google considered the tipping point for widespread acceptance: the cost of coal. The project was started in 2007 and abandoned four years later, which is not to say Google isn’t still committed to solar, wind, and geothermal; fortunately, it is. Google uses renewable energy to power its operations, and Google Energy has made significant investments in a number of large solar photovoltaic and wind farms. With its end-of-2013 investment in another Texas wind farm—a 182-MW facility—Google has committed more than $1 billion in 15 renewable-energy projects rated for greater than 2 GW per year.

I had thought Google’s big news to start the year might be Google Glass wearable displays, devices that enhance human vision with digital data streams. But for us in the HVAC industry, Google’s acquisition of Nest Labs seems to have trumped everything. Google paid a reported $3.2 billion for the smart-thermostat and smoke/carbon-monoxide-detector manufacturer, a substantial buy-in to the home-automation market. It makes one wonder what’s next. It’s not much of a stretch to see a commercial energy-management system in Google’s future; from there, chillers (Google Chiller?) would not be without precedent (think JCI). I’m sure there will be mixed feelings about another giant entering our industry, particularly from the smaller players who already have suffered from consolidation. But it also could raise the bar for all of us—there’s precedent for that as well.

Of course, we’re not just talking about the U.S. market. According to "Global Building Energy Management Solutions Market Forecast & Opportunities, 2018" from Research and Markets Ltd., the market revenues of building energy-management solutions are expected to grow at a compound annual growth rate of around 19 percent from 2013 to 2018. Although most of that growth is forecast to be in North America and Europe, the market for those solutions in Asia-Pacific and South America probably will grow even faster.

I don’t know where all of this is going, although, if I did, I’m sure Google Maps could get me there, but I suspect there is more than just residential thermostats in Google’s future.


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