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Stuart Garfield
Wednesday, January 20, 2010
Startups see opportunity in energy management tech
By Dann Anthony Maurno, Special to Mass High Tech
MHT's Galen Moore: N.E. firms target individual carbon footprints
New England prepared to leverage smart grid expertise
MHT's Efrain Viscarolasaga: Preparing the smart grid for more power
Utility bills have always been a drag; but not until recently have they been a panic.
Homeowners are not content to turn off the lights or turn down the thermostats; they want to know where they are using energy, when and how much — right down to the appliance. And just as consumers are eager to control their energy use, investors are more interested in the energy management startups developing the technology to attract these consumers.
“Efficiency was kind of an unattractive orphan,” when the New England Clean Energy Council (NECEC) formed in early 2007, said NECEC president Nick d’Arbeloff. It just didn’t have the flash of wind or solar power. “But now it’s a very attractive investment target.”
“A huge part of the energy story is in home statistics,” said Chuck McDermott, a general partner at RockPort Capital Partners in Boston. “I think 40 percent of the energy we generate is to heat, light and cool homes; so if you improve the efficiency of homes by 10 percent, you’re talking about eliminating big power plants.”
Hence the “gold rush” to home energy management, noted Martin Flusberg CEO of PowerHouse Dynamics LLC. “Everybody’s got a solution — even Toyota,” whose system (announced in 2009) amounted to a way to calculate costs in charging the (still rare) electric vehicles.
PowerHouse, based in Newton, produces web-based home power management systems. It closed a $500,000 on round of seed funding in 2009.
The market’s growth is in three elements of home energy management, according to Flusberg: monitoring, control, and analytics.
What does 2,800 watts mean to a homeowner? Is that a good, bad or indifferent result? A homeowner needs to understand, for example, how cooking during peak energy usage costs more than waiting till 7 p.m. “If you give them circuit-level, real-time monitoring, showing the effect of doing those things, it’s a very effective feedback mechanism,” said Flusberg.
PowerHouse is just one New England company working to bring energy management to the residential market.
Gloucester-based Grounded-Power Inc., which recently raised $918,000 in venture investment, is offering a web-based product designed to provide residential or commercial building owners a simple view of their energy consumption and uses goal-setting to encourage them to conserve power. In October, GroundedPower announced that it was selected to pilot its technology in residential programs through six municipal power companies in Massachusetts.
GroundedPower president Carl Gustin said that the firm’s Interactive Customer Engagement System can collect data from the company’s real-time monitors and a variety of meters, and can be integrated with home-area networks and utility energy efficiency, demand response and marketing programs.
Analysis, too, comes in the form of energy audits, and D’Arbeloff points to the growing number of auditors that service homeowners. This includes Next Step Living in Boston. Its premium energy audits go well beyond those offered by utilities, cities or states. Homeowners receive a “comprehensive energy usage model” of where — specifically — they lose heat and waste watts, as well as a custom list of short- and long-term remedies.
Similarly, Conservation Services Group (CSG) of Westborough, with offices in 24 states (including New Hampshire and Rhode Island) estimates that homeowners can save 10 percent to 40 percent on utility bills in the short term. Stephen Cowell, CEO of CSG, sits on the NECEC board.
RockPort is invested in Recurve, a rising home-audit company based in San Francisco. McDermott observes that Recurve is perfecting and streamlining its audits and driving down the costs, which will allow it to expand nationally. “There’s no national brand in home-performance audits yet,” said McDermott. “We feel this company has a big opportunity to expand and partner with big-box retailers who sell the stuff you put in the home.”
DIY Ease
A do-it-yourself strategy means the solutions have to be consumer-friendly. “If (energy management) is complicated, people just aren’t going to do it,” said Robert LeFort, CEO of Ember Corp. in Boston.
Ember develops wireless automation technology for military, industrial and home use. Its Zigbee-based wireless platform connects homeowners to power grids, and enables control of devices such as programmable thermostats, from Ember partner Comverge.
LeFort observes a convergence in the home energy management space. “So a lot of companies like iControl and uControl are doing home security and home energy management.
Companies like Utah-based Control4, who do home entertainment, are adding home energy management.” Customers understand entertainment and security; it makes sense to piggyback energy management on those platforms.
“I think what has to happen is that energy efficiency services and products have to be every bit as well understood as window replacement, gutter cleaning and house painting,” said d’Arbeloff. “It’s still seen as something obscure — even if someone has heard of the devices, he wouldn’t know where to get them. But it will emerge from obscurity.”
Last year saw a rise of new VC firms claiming to “go back to basics” with seed funding for startups, observed Flusberg. Still, the bulk of venture capital goes into second, third and fourth rounds of funding. Flusberg points to Colorado-based Tendril, creator of the Tendril Residential Energy Ecosystem, which last secured $30 million in Series C funding.
D’Arbeloff describes home energy management as an emerging market, still developing its partnerships and business models; but it’s an active one. And, its momentum is driven by more than home economics alone. “Organizations like MassSAVE have been around long time, and home energy audits go back decades, but utility bills weren’t large enough to warrant a great deal of action. There wasn’t a threat like climate change leading us to take action other than cost, and as a result, I think that the market for energy efficiency stagnated.
“Now we’re in an era when utility prices have no place to go but up — and there’s a bigger cause at work here besides.”
Dann Anthony Maurno is a freelance writer in Salem.
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