What is the link between energy efficiency and the Internet of Things (IoT)? To answer this question first we need to define what is the Internet of Things. IoT is the network of physical objects which incorporate a technology that allows them to communicate and interact with one another and with the external environment. An IoT solution is a product or an object combined with a service, delivered via the Internet.

Devices and applications in IoT

Examples of devices connected to IoT in the field of energy efficiency include simple sensors, more complex sensors (eg power meters), actuators (eg HVAC room controller), programmable logic controls (PLCs), etc. They can be used in residential buildings or in office buildings, in commercial spaces or in industrial premises.

IOT applications can range from a simple monitoring application to measure the temperature in a building to a complex application to provide complete power automation for an industrial production facility. The IoT applications for energy efficiency can transmit the data collected at a pre-set time or in real-time.

Traditional vs emerging solutions

Traditional IoT solutions could use a complex Building Management System interconnected with programmable logic controls that send orders to the actuators based on the data received from sensors. The system must take into account, in real time, many parameters, from weather forecasts to fluctuation of energy costs.

The emerging solutions for IoT applications in energy efficiency are based on sensors and actuators that interact in an autonomous manner. To ensure real-time building performance management, a local group of devices will exchange information (eg temperature points) with other superior groups to put together the global building control application. This approach requires smarter devices but offers the same results without the complex structure of a BMS and PLC system. Moreover, local autonomy makes the system more resilient and reliable and frees it from communication constraints.

Impact on energy efficiency

The Internet of Things has a major impact on the energy efficiency systems, confirming the clear trend for connected objects. Everything needs to be connected, then the services will be more clearly defined at a later stage. Current technologies for connecting objects shall need to adapt as well. The IoT-based business models will be both applications- and service-oriented, and Big Data analyzes will be critical. This is a dramatic change over today’s applications, where the value is in devices (sensors/actuators). Because the ecosystem evolves very quickly, it is impossible to predict what IoT solutions will look like in a few years.

The benefits of IoT in energy efficiency

The potential benefits of the IoT in energy efficiency are huge, especially for end-users and integrators. IoT devices will allow users of this technology to rapidly measure, verify and adapt plant or building parameters according to consumer requirements, raw material cost, or energy prices.

For the companies which offer comprehensive energy efficiency solutions, IoT will improve the ability to meet customer needs by rapidly reducing integration efforts and commissioning time. Integrators will improve system maintenance capacity by using the ability to diagnose and fix remotely the devices.


IoT promises to offer flexible solutions using new communication solutions from the Internet. As a result, new players are attracted to this market. SMEs and startups can offer cost-effective solutions at least for a complete set of niche applications and can become direct competitors of large traditional players.

In conclusion, IoT developments in the field of energy efficiency offer huge opportunities for both traditional actors – if they are able to create open communities – as well as for new players and integrators who shall include communities as part of their business models.