Using Big Data, Smart Grid Startups Itemize Utility Bills
Many smart-grid entrepreneurs have recognized that utilities could make better use of the reams of smart-meter data they produce every day. At the same time, entrepreneurs have learned that selling to utilities can be slow and frustrating.
But after a number of stalled efforts, it seems that a growing cadre of companies can claim success doing both: showing business benefits from analyzing energy data and convincing utilities to invest in new technology.
On Thursday, Sunnyvale-CA-based Bidgely will announce London Hydro plans to use its software for an energy portal the Ontario-based utility is developing for its customers. Texas utility TXU Energy last week said it will use Bidgely’s software to offer a similar service.
Bidgely is one of many companies that have developed software designed to better inform consumers and businesses of how much energy they’re using. Perhaps the best known is Opower, which generates paper reports—illustrated with smiley faces—that compare one home’s use to neighbors.
In the case of Bidgely, founder and CEO Abhay Gupta saw a business opportunity in how little utilities used smart-meter data. The company, which has raised $8 million in two rounds, developed software that can essentially itemize an electric bill down to the level of large appliances.
By analyzing a home’s power consumption patterns over time—how much power is used and for how long—its algorithms can identify when big power users, such as air conditioners, refrigerators, or clothes dryers, turn on and off. Using that data, its software can tell consumers where most of the electricity spending is going and compare spending on cooling, for instance, to neighbors, says Gupta.
The idea behind providing detailed energy usage information is that it will lead consumers to alter their behavior, such as by changing thermostat settings or getting inefficient HVAC equipment serviced. “We tell them how much they will save if they make changes and then we give them specific tips. It’s almost like a remote energy audit,” says Gupta. The software can also break out a building’s solar panel production from the rest of a bill.
Most people spend very little time, if any, looking at their electric bills. Itemizing electric bills down to the appliance level—called “disaggregation” in industry lingo—is one way to get energy users to care and give them the means to make changes.
There are already a few other companies working specifically in this area of disaggregation, including Durham, NC-based Plotwatt and Silicon Valley-based Verdigris Technologies, both of which are using techniques that don’t require installing expensive hardware.
But what about the challenge of selling to utilities? The 2009 federal stimulus pumped billions of dollars into smart meter installations. But smart grid startups, such as Boulder, CO-based Tendril Networks, say they were foiled by long-running pilot tests that never led to commercial sales.
Even though utilities do tend to adopt technology slowly, the industry is changing, which could force more of them to invest in products for interacting with consumers in new ways.
Certain markets, including Texas, have competitive retail energy markets, which creates an incentive to differentiate electricity service, Gupta notes. And even utilities that are monopolies are seeking ways to improve customer service, he says. For example, if a consumer calls up to find out why last month’s electric bills were so high, the customer service representative can provide some insight based on a breakdown of appliance-level energy usage.
But as with so many things in energy, regulations make the biggest difference. In many states, utilities have annual energy efficiency targets and have to pay penalties if they aren’t met. Spending on efficiency and peak-time demand reduction represents billions of dollars a year, Gupta says.
Perhaps the most compelling reason to sell through utilities is that they’re gateways to a large number of consumers and businesses—if startups can deliver measurable energy savings. “Validation with utilities is the hardest and biggest step,” Gupta says.
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