The rise of smarter homes: Harnessing AI for energy efficiency and resilience
- 30 Jun 2025
- 5 min
Residential buildings account for 22% of energy-related greenhouse gas emissions and represent nearly a quarter of global energy consumption, according to IEA, while global energy markets are shifting under the weight of transformative challenges.
Rising energy prices, amplified by geopolitical tensions, supply chain disruptions, and growing demand, have reshaped the priorities of homeowners. Alongside this, the undeniable consequences of climate change are spotlighting the urgent need for sustainable solutions. Addressing the residential sector is critical to reducing costs, ensuring reliability, and achieving sustainability goals.
- Residential heat pump sales tripled between 2015 and 2022
- Electric cars made up one in five global car sales in 2024
- Solar photovoltaic power capacity increased by 20% from 2023 to 2024
Electrification is central today to the transformation of the residential sector. Governments are rapidly encouraging the adoption of heat pumps, electric vehicles, and solar power as electricity is the only energy that can be fully decarbonized. Which translates into increasing adoption: residential heat pump sales tripled between 2015 and 2022, while electric cars made up one in five global car sales in 2024 and solar photovoltaic power capacity also increased of 20% between 2023 and 2024, and more than 69% since 2020.
Yet with this electrification comes complexity—aging grids, rising consumption, and unpredictable renewable energy patterns demand smarter systems for efficient energy use. This is where intelligent technologies, particularly Home Energy Management Systems (HEMS), offer significant value.
Energy is often invisible to homeowners, hidden behind walls and wires, making waste difficult to identify and manage. HEMS brings transparency to energy use by making energy flows visible in real time. This includes tracking consumption from all sources—solar panels, the grid, or home batteries—and managing loads such as HVAC systems, water heaters, and electric vehicle (EV) chargers.
With sensors, energy meters, and connected devices, HEMS collects granular data to monitor home energy consumption at both the whole-home and individual appliance levels. This creates a clear picture of where energy is being used, helping homeowners make informed decisions to eliminate unnecessary consumption.
Source: Eurostat
Amid soaring utility bills and environmental concerns, homeowners are prioritizing energy efficiency. Nearly half—48%—cite it as their top concern, while 42% emphasize energy security and reliability, in a survey conducted by Schneider Electric. This growing awareness is also driving interest in energy independence, with 38% of homeowners aiming to produce their own electricity.
However, barriers persist. Many homeowners lack the knowledge to identify impactful measures, often focusing on small actions like turning off lights, which yield minimal savings. Additionally, upfront costs for renewable installations like solar panels can deter adoption, especially without a system to maximize their benefits.
To overcome these challenges, smarter technologies are needed. A robust HEMS can unlock substantial savings, enhance comfort, and minimize waste. By integrating loads, renewable energy sources, and digital intelligence, homeowners can manage their energy more effectively without compromising their lifestyle.
43% of homeowners already consider smart home technology as an easy way to reduce energy use.
Indeed, artificial intelligence is redefining the capabilities of HEMS, moving beyond basic inputs and static rules to create dynamic, adaptive systems. AI uses predictive analytics, machine learning and deep learning to analyze data in real time, learning household behavior, forecasting solar generation, and optimizing energy usage.
With predictive analytics, AI anticipates energy needs by analyzing weather forecasts and historical solar production, aligning energy-intensive tasks like EV charging with periods of high solar yield.
Self-learning enables AI to identify patterns in appliance usage and adjusts schedules to utilize cheaper or cleaner energy windows (machine learning), and even understand the interplay between devices and detects inefficiencies, adjusting operations in real time to ensure safety and reliability (deep learning).
These capabilities enable proactive energy management. Instead of reacting to conditions, AI-powered HEMS forecast usage, balance loads, and reduce reliance on costly or carbon-intensive energy sources.
However, the development of advanced HEMS must address valid key concerns before people entrust AI to manage their homes' energy with confidence.
- Privacy84% of users highly valued data security, meaning protecting household data is non-negotiable.
- InteroperabilityDevices must work together seamlessly, which remains a challenge in fragmented smart home ecosystems.
- TrustTransparency on how AI systems make decisions is critical.
Today, 44% of consumers are hesitant to rely on AI for household tasks, and 41% prefer to avoid it. Smart HEMS should provide clear explanations of how its AI-driven decisions are made and allow homeowners to override automated actions at any time. This balance between automation and user control ensures that homeowners remain comfortable and confident in their energy management system.
Source: Schneider Electric
Designed in-house at our AI Hub, Wiser Home AI combines cutting-edge artificial intelligence with deep expertise in energy management. The system autonomously optimizes energy use for key household loads, such as EV chargers, water heaters, and soon, HVAC systems, combined with monitoring and control into a single system.
Wiser operates through three core functions:
Data monitoring
Sensors and meters collect real-time information on energy use and environmental conditions.
Load control
Wiser automates loads, managing energy flow in response to changing demands and priorities.
Energy optimization
Proprietary algorithms process data locally and in the cloud to deliver precise, informed decisions for smarter energy use.
It goes beyond traditional systems by managing high-energy loads such as electric vehicle charging and water heating, with space heating and cooling soon to follow. For example, Wiser can align EV charging with solar production or off-peak hours, ensuring cost-effectiveness without compromising user needs.
Simulations conducted across several countries reveal the significant impact of Wiser Home AI. In homes equipped with solar panels, electric water heaters, and EV chargers, in a context of fixed tariffs, Wiser delivered substantial savings, compared to baseline scenarios without AI optimization: 16% savings in France, 19% in Spain and Germany, and up to 25% in Australia.
Source: Schneider Electric
These results underscore the importance of dynamic energy management. Homes with higher electricity consumption and flexible loads benefit most, while wider tariff differences amplify savings. For example, households can maximize self-generated solar power by shifting consumption to align with production, minimizing reliance on the grid, without compromising their energy needs.
Dynamic tariffs amplify these savings by incentivizing energy use during periods of low demand. In some markets, spot price volatility creates opportunities for consumers to benefit from negative pricing, where they are effectively paid to use electricity. While no human can monitor tariffs minute-by-minute to determine optimal energy use, AI-powered HEMS automates this complexity, achieving greater cost savings while maintaining comfort.
As renewable energy adoption grows, utility providers must expand dynamic pricing models to encourage efficient consumption. As dynamic tariffs and renewable integration continue to evolve, intelligent systems powered by AI will play an increasingly central role in creating future-ready homes.
For homeowners, integrating AI-powered HEMS like Wiser offers a clear path to resilience and sustainability, navigating regulatory requirements, reducing costs, while making the most of renewable resources.
But energy efficiency is not just a homeowner concern; it is a societal necessity. Smarter homes pave the way for more sustainable communities, helping to reduce carbon footprints while enhancing resilience against global energy pressures.
By combining digital intelligence with energy expertise, we empower individuals to navigate the complexities of modern energy systems with confidence and ease. In doing so, we help shape a cleaner, smarter world—one home at a time.
Find out more in our report “Reshaping energy consumption in residential: AI’s role in building efficient, resilient and sustainable homes of tomorrow”.
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