Note: This post was first published on the CIIE, IIM Ahmedabad’s blog. In part 1 of this series, we looked at the opportunity in energy analytics and how it can help individuals and organisations in energy savings, cost reduction and effective maintenance. In this post, we look at some prominent energy analytics startups that have successfully cracked this seemingly complex market.
Opower is one of the biggest players in the energy analytics industry with headquarters in Arlington, USA. It is a Software-as-a-Service company that combines a cloud-based platform, big data, and analytics to help its clients (mainly utilities) reduce energy consumption, costs and carbon footprint.
Starting in 2007, Opower now has a market cap of USD 573.9 million and is listed on the New York Stock Exchange (NYSE) under the moniker OPWR. They work with more than 95 utility partners, including 28 of the 50 largest U.S. electric utilities. In addition to digital billing and customer engagement, Opower offers its utility customers a demand response management (DRM) system. DRM is a smart grid-based system that enables consumers to reduce or shift their power use during peak periods of demand, aided by time-based or financial incentives.
Opower uses a unique gamification (peer comparison) model to encourage customers to save on energy costs. It sends a paper report to homeowners that compare their energy usage patterns to those of similar neighbors which eventually leads to a ‘competition’ of sorts for energy savings. This business model has had a significant impact and has reached more than 50 million households and businesses across nine countries. In April 2014, Opower entered into a unique partnership with WaterSmart – an Opower clone of sorts, but for water management – to implement a behavioural conservation program in the city of Palo Alto in California, USA – a region currently undergoing a massive drought. The same month, Opower made a stellar initial public offering (IPO) on the New York Stock Exchange, raising more than $100 million in what was to be a hugely successful IPO for a cleantech company at the time.
EnerNOC stands for Energy Network Operations Center. Headquartered in Boston, EnerNOC was set-up in 2001. It provides tailor-made solutions to its clients which include commercial, institutional, and industrial customers. EnerNOC’s key products include both enterprise- as well as utility-facing solutions. The former is an energy intelligence software that helps organizations take control of their energy spending, the latter helps make utility/power grids more flexible, driving enhanced reliability, efficiency, and cost control. As of today, EnerNOC has a market cap of USD 288.6 million.
EnerNOC’s strength lies in its user interface. Its solution runs on a prioritization algorithm which categorizes the information based on its usefulness to the user. It further translates this information into meaningful financial data, thus simplifying the energy management decisions for the user.
EnerNOC’s software has helped many industry players in cutting costs and General Motors is one their prime clients. The car manufacturer which has its units in more than 35 countries wanted to bring down its exorbitantly high energy costs. Since its deployment, EnerNOC’s solution and services have resulted in more than $21 million in savings on energy bills for GM.
BuildingIQ is a New York-based energy management company whose cloud-based analytics software helps building owners/managers reduce energy consumption and costs from the building’s heating ventilation and air-conditioning (HVAC) systems. The software gathers/monitors various input variables (such as weather data, energy prices and demand response-related information), computes and analyses this data and comes out with the most efficient HVAC operating strategy. Founded in 2009, BuildingIQ is rumoured to be mulling an initial public offering that could value it at USD 100 million.
What distinguishes BuildingIQ from other energy analytics players is that its software brings with itself full automation and control. Instead of just analyzing and producing relevant/meaningful results, its solution makes real-time changes to each building (through its integration with the Building Management System), directly adjusting HVAC system parameters, reducing costs by as much as 25 percent. According to Greentech Media, BuildingIQ is serving close to 20 million square feet of buildings with its analytics software.
Started in 2010, FirstFuel is now a world leader in information-enabled energy analytics services. Its solution combines big data, building science and advanced analytics software.
The Lexington-based company has two major cloud-based SaaS offerings for utilities and energy service providers:- FirstAdvisor (a self-serve engagement portal for utilities to offer their commercial and industrial customers, offered through a unique partnership with Opower), and FirstEngage (combines virtual auditing, measurement and verification, and portfolio screening tools).
As of now, FirstFuel’s software tracks around 1 million utility meters and helps utilities in better understanding their customers’ energy usage patterns. In April 2015, the company raised USD 23 million in a Series C round, aimed at making inroads into the European market, taking its total fund raise so far to USD 45 million.
WHAT CAN WE LEARN FROM THESE?
All four of the above companies started out when the energy analytics industry was still in its commercial infancy, but the fact that they have become giants today says a lot about the potential that this field holds. The gamification model, utility-focused applications, user-friendly dashboards and the added benefit of automation; each of these companies has a USP that sets them apart and solves a genuine energy-related problem for a particular set of energy customers.
Aspiring Indian entrepreneurs with an interest in energy analytics would do well to derive inspiration from these successful startups in building intuitive-yet-disruptive solutions for the energy analytics industry in India.
In part 3 of this series, we’ll analyse some of the Indian startups which are active in the energy analytics space. Stay tuned.
Written by Rakshit Ranjan (Summer Intern, CIIE) & edited by Mohsin Bin Latheef (Program Manager, CIIE)