Vienna systems, people increasingly decide to build so-called



Vienna University of Economics and








& Cost Efficiency of

Smart Homes

Radovan Brnovic
and Juraj Draskovic

Professor: Mag. Gina Villanueva-Weinzierl, M.B.A.








Vienna, January,



 Table of Contents. 1
1. Introduction.. 3
2. History of smart Homes. 5
3. Living Standard and Methods of
Controlling. 5
3.1. Switches. 5
3.2. Scenario
testers. 5
3.3. Remote
control 5
3.4. TV.. 5
Internet and mobile applications. 5
3.6. Text
messages. 5
4. Discussion   7
5. Conclusion. 9
6. References. 10

1.  Introduction


this paper the it will be discussed how smart homes provide a better quality of
living in a variety of ways. How they make day-to-day life easier by doing the
majority of home functions. How they control heating, water and electricity as
in doing so, energy consumption can be optimized which not only help with the
biggest problem of today, the overconsumption of energy but also saves money of
the owner. It will also be discussed how the water tanks as well as solar
panels enable the house to be independent from the municipal sewage as well as the
power gird. At a time when automation is getting more and more common and when
one tries to streamline every segment of life through various technical
systems, people increasingly decide to build so-called “smart homes”.
The smart home is the name for a system that connects and controls nearly all
technical (electronic, electromechanical and mechanical) housing systems in the
living space. The goals of such a system are to protect property, make housing
more comfortable and safer, and optimize energy consumption as much as
possible. Each such house has a built-in central control system, and the
intelligent installation system is applicable to all facilities regardless of
their purpose.


2.  History
of smart Houses

(1901 – 1920) – The invention of home appliances – Home
appliances aren’t really “smart” buy today’s standards. However they were a significant
breakthrough in the early 20th century. The first one to be introduced was the
engine-powered vacuum cleaner in 1901. Soon, an electricity-powered one was
invented just six years later. In the following two decades electrical irons
would be invented, as well as refrigerators, washing machines, clothes dryers,
toasters, and so many more. This was the first step in making life easier by

1991 – Gerontechnology – the
Famous example of Gerontechonolgy is the Life alert device that signals medical
staff when an eldery person has fallen and is not able do get up on their own.

Early 2000s – Smart Homes –The
early 2000s was the time when Smart Homes, or rather, home automation first
made their debut. It was at this time that Smart Homes were becoming an
affordable option which was the main reason their popularity surged.

Today’s Smart Homes – Today the
focus of smart homes is primarily greener living as new ways of energy
consumption optimization are being discovered. The security they offer is also
becoming more and more efficient. The Smart Homes of the future may resemble
the ones depicted in various sci-fi cartoons or movies.


3.  Living
Standard & Methods of Controlling

smart homes develop more and more, an increasing number of home automation
controls are being introduced. The management bundle is varied and extends from
the simplest testers of scenarios to a variety of mobile applications.


installing intelligent systems, it is not necessary to make any major changes
throughout the house. The existing lighting control switches can easily be
adapted to the new control system. This simplicity and functionality not only
makes home automation cheaper and easier but is sure to enable the owners to
install the system themselves in the near future. Switches are the simplest
form of controlling a smart home and present the first step toward more
sophisticated or personalized ways of controlling a smart home which will be
discussed further into the text.


drivers are one of the simplest ways to manage smart homes. For example, one of
the possible scenarios is the scenario “I’m out of the house”. By
selecting this scenario on the tester, the system automatically slides the
shutters, shuts off the lights, and performs all the other actions that are set
in that scenario. This mode of management is easy to fit into your environment
in accordance with your habits and needs. It is also very useful as it solves
the century old problem of not being sure if the stove was turned off or a
window was left open when the owner leaves the house for longer periods of



there is more than one remote control in the home, there is a possibility of connecting
all devices to one remote control. This makes it possible to control all home
appliances using a single remote, which greatly adds to the comfort of living.
This also adds a personalized touch to a smart home as it literally becomes
operative by a simple push of a button.


automation, movies, photos, music and the Internet can be managed via the TV.
The only condition is that the existing TV has an HDMI input. Which is a great way
of controlling a home because the owner does not even have to get out of the
chair to manage the home. And since all TVs today have an HDMI input this does
not really present any issues. The HDMI input as a way to connect to the system
of controlling a smart home is sure to prove as invaluable asset in future
developments of controlling smart homes, as more and more devices are equipped with
it. The most important example being the notebook.


the Internet and mobile apps, it is possible to turn devices on or off from
remote locations. For example, in summer it is possible to turn on the
air-conditioning or heating in winter before coming home. This is also very
important as it also solves the worries of the owner on whether anything was left
turned on while leaving the house for longer periods of time.


there is a problem in the house, for example smoke detection, the system
informs the owner of the problem with a message. These messages are also an
important security asset as the owner can also be notified when there is
unsuspected movement sensed in the house. The messages themselves are a very
important data carriers as they do not require internet and so the message is
more likely to reach the owner than if it was sent via internet.



1. Smart Home system




of the main tasks of the system is to alert the owner of the incoming danger
and in doing so it can increase security and protection significantly. For
example, during a gas or smoke leakage devices specially designed to detect a
hazardous situation are triggered and alarm the homeowner, and there is a
possibility to activate certain devices whose job it is to secure the place of
living. Furthermore, motion sensors can identify unwanted guests and alert the
owner that there was unanticipated movement in the house.

sensors, besides offering the owner safety, are very important in achieving as
much comfort as possible. They can be adjusted in a way that as soon as they register
movement, they trigger the default actions such as turning on / off lights and
air conditioners. Air conditioners can be adjusted and, except when triggered
by the motion sensor, are programmed to activate at a certain temperature.
Apart from comfort, this also saves energy because the climate will not be on
all day if there is no need for it. Lighting can also be tailored to the needs
and wishes of the owner so it is possible to program the system in such a way
that the lights are automatically turned off when the house is empty or that
certain lights are turned on/off in certain conditions or scenarios. All this
contributes to a more comfortable and simpler living. Among the essentials in a
smart home is the Internet of Things (IoR) which is described as by Wikipedia as
a “network of physical devices, vehicles, home appliances and other items
embedded with electronics, software, sensors, actuators, and network
connectivity which enables these objects to connect and exchange data”1.
Every appliance is installed with an internet access and can monitor the behavior
and preferences of the owner, so for example a coffee machine monitors how
often a person drinks coffee and what flavor he/she prefers. The device then
processes this information and a supply system can be installed in which the
device itself makes the order for more coffee which is then in turn delivered
to the owner’s house while his bank account is automatically debited. This type
of buying everyday things is not restricted only to coffee, fridges of the
future will also be able to monitor the amount and type of produce held in them
and will also be able to make regular orders without the owner having to go
through much trouble him/herself.


Environmental & Cost Efficiency


of the most important issues in the world, as well as every household, is
energy and energy efficiency. For even the simplest operation, it is necessary
to spend a certain amount of energy, but each one should do the job with minimal
energy consumption. One of the main motives behind building smart homes is
increasing energy efficiency. Intelligent systems control the consumption and
react automatically if the set values are exceeded ??and the system stability
is compromised. Furthermore, consumption is the lowest when heating and
lighting are placed in economic mode. This means it is switched off as soon as
the room or house are empty and thus saves a lot of energy. Since the same
items refer to protection, safety and energy efficiency it is logical to
conclude that all of the segments are linked to one another, so  turning off the lights on the sensors adds to
the comfort while simultaneously saving energy. Users of such systems typically
consume 20% to 40% less energy depending on how well the system is used. There
is limitless possibility to increase the energy efficiency of such houses.
Nowadays, more and more people talk about renewable energy sources, so smart
homes have solar panels or photovoltaic cells that transform Solar energy into
other useful forms of energy. The main problem with using such a system is not collecting
energy but storing it. For example, most energy is collected in the afternoon,
but the biggest consumption happens in the evening, and it is more important to
think about storing the energy so that it can be used whenever it is needed and
not just when the sun is shining. As technology advances, more and more people
are thinking of ways to store energy. But to improve energy storage, it is
necessary to change the entire infrastructure, which is both time-consuming and
costly. Even though installation might be expensive in the beginning, as time
goes by, the cost efficiency of the smart home will become apparent. The water
as well the electrical bills will almost be nonexistent as the home can provide
almost everything a person need in everyday life with minimal costs and energy.
Regarding electricity, as mentioned above, using the solar panels the home
becomes independent from the local power grid. It can be argued that the solar
panels are expensive as well, but they are a quick return on investment, as
they provide free energy and the owner can sell surplus energy. Water tanks
built around the house collect rain and filter it so that it can be used for
sanitary purposes in day to day situations. They also reduce the amount of
sewage discharged to oceans and rivers. In larger quantity, the tanks could
even help with reduction of storm water on roads and drainage infrastructures.
Smart homes also take care of another necessity and that is heating. Smart home
offers a variety of cost efficient, futuristic ways of heating a home. Ground
Source Heat Pumps uses pipes that are buried deep in the back yard to extract
heat for your smart home. A system uses a mixture of antifreeze and water that
circulates around a loop in the ground and in doing so collects heat which is
then sent into the home. This heat can then be used where it’s needed for
example for the hot water, underfloor heating, and radiators in the house. The
Ground stays at a more or less at a constant temperature under the surface year
long, so the use of the heat pump is not restricted to a particular period of
the year. This of course  results in
lower fuel bills, particularly if it replaces electric heating. Installation Costs
are usually somewhere between $11,000 and $15,000, and running the system
naturally depends on a number of factors like the home size and the quality of
its insulation. The second type of heating system is  the Air source heat pump that absorbs heat
from outside and turns the hot air into a fluid, which is then  passed through a compressor to increase its
temperature. Two types of the air pump are currently on the market:
air-to-water systems that distribute heat through the central heating system, while
air-to-air heat pump systems produce warm air which is circulated by fans. The
second one isn’t likely to be used for heating water. Similary to the ground pump,
air pumps require a home that is well insulated as they are better when
producing heat at lower temperatures than tradsitional boilers are. The cost
for both heating systems is more or less the same, with the air pump cost ranging
from $7,000 to about $14,000. The most futuristic one is Smart Heating With A
Micro CHP Boiler. The concept of this heating system is very simple: it maximizes
efficiency. These boilers, although similar both in shape and size to ordinary
boilers, the distinction lies in them being ale to generate electrical power
whilst they are heating water. Admittedly Domestic micro-CHP systems are
currently powered by fossil fuels. In spite of this, the technology is still
considered to be a ‘low carbon technology’ because it can be more efficient
than burning fossil fuels for heat and getting electricity from the grid.


2. The possibilities a Smart Home offers






5.  Conclusion

smart homes and building them around the world every day is flourishing as
people are becoming more and more aware of the benefits the homes bring for
them regarding independency from energy providers as well as the substantial
cost reductions and the positive effects it has on the environment. This is
also confirmed by predictions that the smart home market, currently worth $
5.77 billion, will exceed $ 10 billion by 2020. Unfortunately, the same cannot
be said for some counties that have not yet recognized the prosperity that the
Smart Homes bring or simply are not developed enough that it can be implemented
on a larger scale. However, astime moves on and the economy develops worldwide,
smart homes will start to be implemented around the world.  In the last few decades, we have witnessed
the exponential growth and development of technology, for instance, ten years
ago, the term smartphone did not even exist, and today almost every person
using a mobile device has a smartphone. As technology develops, smart home
systems are increasingly evolving, and it is to be expected that the market
will continue to grow. Almost all developed countries are beginning to
introduce or have already introduced laws regulating energy efficiency, and
since one of the main motives behind building smart homes is to increase energy
efficiency, it is to be expected that the construction of smart homes will be
more and more stimulated. Furthermore, as technology advances, more and more
manufacturers are becoming involved in selling and installation of intelligent
systems which will in turn drive the prices down and owning a smart home will no
longer be reserved exclusively for the wealthier.