The herd effect in home energy: How smart homes are going mainstream

⸻ Beyond Energy

From prosumers to the herd: social proof is turning smart home energy into the new normal.

Beyond the prosumers

When the energy transition conversation turns to the household, one figure is often placed on a pedestal: the prosumer. The prosumer doesn’t just consume energy – they generate it, optimise it, and sometimes even sell it back to the grid. They’re the poster child of net zero: solar panels on the roof, a home battery in the garage, and a Home Energy Management System (HEMS) dashboard open on their phone.

Many early adopters of HEMS fit this description. They cared deeply about energy independence, wanted to manage their bills proactively, and spent hours monitoring dashboards, adjusting schedules, managing tariffs, and orchestrating devices. It’s a rewarding pursuit, but it demands time, attention, and technical knowledge… resources most households don’t have.

The long-term trend is clear. The European Commission estimates that the number of clean energy prosumers in the UK will rise to 24 million by 2050, up from just 1 million in 2015. This growth shows the potential for broader adoption, but for most households, success will come not from becoming energy experts, but from systems that work automatically in the background.

For most people, energy management is not a full-time job. Daily life, work, and family leave little room to optimise energy use. On top of that, the cost-of-living crisis made investing in renewable features even harder, as homes with these upgrades can cost thousands more. Adoption is easier for those with more resources, while many households face financial and knowledge barriers to going fully prosumer.

The herd effect in energy

If prosumers are the pioneers, the herd effect explains what happens next. Social contagion plays a powerful role in energy adoption. A landmark study from Yale and NYU found that every 10 local solar installations were linked to a 7.8% increase in adoption likelihood among nearby homes.

The psychology is simple: what was once niche becomes normalised. Seeing solar panels on a neighbour’s roof or hearing how a smart system cut their bills creates social proof. It’s less about economics and more about belonging – if my neighbours are doing it, maybe I should too.

Research shows that adoption rates rise when solar panels are visible from the street, even up to 500 meters away. Influence doesn’t stop at households. The National Renewable Energy Laboratory (NREL) found that non-residential solar installations, such as those on schools, churches, or municipal buildings, encouraged nearby residential adoption, contributing roughly 0.4 additional home installations per quarter for each institutional system.

Mark Lufkin, CPO at Wondrwall, discusses on the Hypercube Energy Podcast that many households simply don’t have the time or support to manage energy themselves.

Peer effects ripple outward, but herd behaviour doesn’t have to be random or reckless. When adoption is paired with clear information, visible benefits, and supportive systems, social influence helps communities move toward smarter energy choices. The herd doesn’t just follow blindly; it reinforces behaviours that are effective, sustainable, and beneficial for everyone, accelerating the energy transition rather than hindering it.

Herd adoption for smart homes

Most research on energy adoption focuses on solar PV, largely because it’s visible. But the same social psychology applies to smart home energy systems, even when they are less obvious. When people share stories about lower bills or when neighbourhoods start building resilience against outages, these experiences spread – and influence others.

HEMS are no longer just for energy enthusiasts. Early adopters, the prosumers once spent hours optimising solar panels, batteries, and smart thermostats. Today, AI-driven systems handle the complexity, making energy management effortless. The herd effect takes over. It’s no longer about constantly monitoring dashboards; it’s about enjoying the results: lower bills, improved comfort, and subtle boosts in neighbourhood prestige.

The numbers reflect this momentum. Recent research shows that 3.8 million European homes had HEMS installed in 2024, with the installed base expected to reach 10.6 million by 2029, growing 22.8% annually. This growth is being driven by the rise of smart home technology, wider IoT adoption, and government programmes promoting sustainable living.

From lone wolves to networked homes

Prosumers light the way, but the herd builds the future. Early adopters prove the technology works and make it visible. Most households follow not to manage kilowatt-hours, but because they see tangible benefits in their community.

AI-enabled HEMS turn the work of prosumerism into an invisible service. Homes don’t need to set tariffs or orchestrate devices – the system does it automatically. What spreads isn’t the effort of early adopters, it’s the outcomes:

Lower bills without daily effort
Resilience during grid outages
Climate credibility in communities moving toward net zero

In short, HEMS transform energy management from a niche hobby into an effortless, scalable solution for every household.

Why the herd matters for energy transition

Focusing only on prosumers keeps the industry in a niche. Real impact comes when solutions are designed for the herd – ordinary households that don’t want to think about energy but can still benefit:

This is where psychology meets technology. People are wired to follow social proof, when neighbours save money, gain comfort, or show off greener lifestyles, others want the same. By harnessing these natural tendencies with AI-driven HEMS, what was once the domain of energy enthusiasts can become the norm.

Smarter homes don’t just save energy – they reshape behaviour, amplify adoption, and drive the energy transition at scale.

If you missed our recent webinar, The Future of HEMS: Data, AI and Interoperability, you can now watch it on demand to learn how data and AI are unlocking new value from residential energy assets.

Want to hear more? Check out our podcast episodes with Mark Lufkin, Chief Product Officer at Wondrwall, and Rob Taylor, Group CIO at GivEnergy, exploring how HEMS is transforming the way we power and experience our homes.