Cleantech Cleans Up Message, Stops Selling Green

The hungriest thing in some restaurants may be an old refrigerator that gobbles up kilowatts of electricity. Luke Fishback’s analytics software can show that usage, teasing out energy consumption data in a commercial kitchen down to each appliance. Beyond analytics, the software recommends ways to cut energy usage. Fishback pledges he can deliver energy savings as high as 50 percent.

Fishback, founder and CEO of Durham, NC, startup PlotWatt, acknowledges that his company’s technology eases demand on the power grid. But he doesn’t present PlotWatt as a cleantech company. Instead, he tells potential customers his technology addresses expensive power bills—one of the top pain points in any restaurant.

“The way I do that is not by making you a green Dunkin’ Donuts,” explains Fishback. “The way I do that is by making you a more profitable Dunkin’ Donuts.”

PlotWatt is an example of new technologies are emerging that give homes and businesses new ways to measure, analyze, and save energy. But some companies that could fall in the cleantech category aren’t touting their products and services as either clean or green. In fact, “cleantech” is a dirty word in some circles, says Fishback, speaking at the Energy Thought Summit in Raleigh, NC, last week. The conference brought together startups and energy executives to discuss a wide range of energy issues, including clean technology. To some of those at the summit, as well as a growing number of stakeholders in the energy industry, energy efficiency is best discussed in the context of economics rather than environmentalism.

If some cleantech companies are dropping the cleantech label, it might be because investors have become wary of such investments. A lot of the money poured into cleantech technologies five or six years ago ended up in failed investments, says Josh Gould, technology-to-market advisor for the U.S. Energy Department’s Advanced Research Projects-Energy. ARPA-E invests in early stage, potentially disruptive energy technologies that the private sector sees as too risky to invest in. Gould says the landscape for cleantech investing is leaner now compared with previous years.

Venture capital firms are typically looking for technologies that can bring them a return ten times greater than their initial investment in about five years. But Fishback says much of cleantech is perceived as an incremental improvement that sells to a slow buyer—not ideal venture for capital investment. That’s led a lot of cleantech firms to seek out alternative funders and partners while shedding the cleantech image along the way.

Nonetheless, cleantech technologies are making their way into the mass market. Duke Energy (NYSE: DUK), the nation’s largest electric utility with customers in six states, counts 170,000 smart thermostats from Nest installed in its service territory. Kris Bowring, director of business development for Lowe’s Home Improvement (NYSE: LOW), argues that consumers are past the point of early adoption. He says consumers are now well aware of the new technologies available to them, but they’re looking for companies to answer the question at the forefront of their minds —what’s in it for consumers? When companies answer, the response is not necessarily green.

LED lighting company Cree (NASDAQ: CREE) raised its profile in the lighting world when it launched its consumer LED light bulb last year. But Mike Watson, the Durham, NC, company’s vice president of product strategy, says consumers still need to be educated about LEDs because generations of consumers have embraced a failed lighting technology. Incandescent lights release 90 percent of their energy as heat and just 5 percent as light, Watson says. The company has been trying to engage consumers with tools such as online calculators, which show how much electricity and money an LED bulb can save.

Yet Cree has not embraced the cleantech mantle. Instead, the company markets its bulb as new and better technology that replaces tired, old incandescent bulbs, and saves money in the long run. An LED bulb uses less electricity by definition; Cree CEO Chuck Swoboda told an audience attending a September talk at the University of North Carolina at Chapel Hill’s Kenan-Flagler Business School. The environmental sustainability of the technology just happens to be an additional benefit.

Cleantech’s successes are “Trojan horses,” Fishback says. Consumers aren’t embracing clean technology out of some cleantech strategy. Instead, they see technology that’s cool and trendy—like Nest. Energy savings and positive environmental impacts are untrumpeted hidden benefits of the technology, he says. Accordingly, if Cree and PlotWatt discuss the environmental benefits of their technologies, it’s always secondary to the economic ones.

Fishback’s thinking is shaped by, of all things, the many restaurant industry conferences he attends. That’s where an entrepreneur trying to sell energy-saving technology learns what restaurant operators want and need. At a recent Burger King conference, restaurant owners told Fishback that they budget between $3,000 and $4,000 a month for power. Electricity prices in other countries drive the bills much higher. One owner from Jamaica told Fishback his monthly bill can reach $20,000. Those restaurant owners don’t talk to Fishback about his software out of environmental concern.

“It works great because it saves them money,” Fishback says.

Frank Vinluan is an Xconomy editor based in Research Triangle Park. You can reach him at fvinluan [[at]] xconomy.com. Follow @frankvinluan

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