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Google, with its billions in annual revenue and its constant noise about open standards and free access to information, is hard to ignore when it crashes into an unsuspecting industry. As cell phone companies, publishers, advertisers and software makers have all seen over the years, when […]

googlesmartmeterlogoGoogle, with its billions in annual revenue and its constant noise about open standards and free access to information, is hard to ignore when it crashes into an unsuspecting industry. As cell phone companies, publishers, advertisers and software makers have all seen over the years, when Google sets its sites on your sector, the industry’s reaction is usually a mixture of fear and excitement. So now that Google’s given us a peeak at the software and online tools it’s developing for smart meters — PowerMeter — how are the companies that are building their own software and hardware to organize the energy information in our homes reacting?

While young startups that have built their businesses around energy management tools are largely applauding the attention, Google’s moves raise a lot of questions for this fledgling industry and could furthermore directly threaten the business models of some of the more entrenched smart meter companies.

On the face of it, the energy management startups appreciate the attention. More awareness of the sector means more smart meter adoption, and more customers. As Adrian Tuck, the CEO of home energy gear maker Tendril, told us, the largest risk for the smart meter industry is moving too slow. “The biggest brand possible just jumped in,” says Tuck, which will only speed up adoption and consumer demand.

Tendril’s reaction partly stems from its close relationship with Google — Google chose the startup to speak at its smart grid event with GE in Washington, D.C., next week, and Tuck describes the relationship between Tendril and Google’s PowerMeter as “dating.” Tendril shares Google’s view that open platforms will help speed adoption and make the consumer experience better — last week the startup said it’s opening up its API for third-party developers, and Google says it plans to release its PowerMeter API in a similar manner.

Other energy management startups that aren’t as closely aligned to Google as Tendril, are, for the most part, excited about the search engine bringing much-needed attention to the space. “It’s great to have Google on the energy-efficiency train,” said Agilewaves CEO Peter Sharer. “Over the past couple of years we’ve been largely swimming upstream.” Greenbox CEO Jonathan Gay expressed the same sentiment, saying he thinks Google will shine a spotlight on the sector and attract interest. Even a spokesperson for meter maker Itron, Sharelynn Moore, said Google “adds enthusiasm and validation” to the industry.

But Google’s entrance into the space does raise a lot of questions for these firms. First off, will Google be a competitor or a partner? Gay said it’s too early to tell if the product will be competitive to Greenbox, but explains the two as follows: Google is building a platform, while Greenbox, which is focused on the software side of home energy management, is an application that can ride on that platform.

Google and the energy management startups also note that Google’s tools are just offering up energy information, and that there’s plenty of room for software that can analyze and better visualize the data as well as control appliances around the home. And hardware makers will be eager partners. Yet I also can’t help but think that the fact that Google will be offering its online tool and software for free will undercut some aspects of the new businesses, all of whom are struggling to figure out revenue drivers in a very nascent industry.

Perhaps a bigger question than whether Google is friend or foe is, who owns the relationship with the customer? Google’s longstanding online presence could mean energy customers turn to it for energy data info, while bypassing utilities and young startups that are also trying to build communities and aggregate eyeballs. Startups will be willing to play second fiddle to Google, but utilities have years of history with their customers and might not be keen on one of the Internet’s perkiest brands moving in. Cell phone companies felt the same way when Google expressed its intentions to work on mobile software.

Beyond the issue of customer loyalty, Google’s entrance into smart meter software brings in a heavy-hitter for companies that are looking for Internet Protocol to be the basis of the next-generation smart grid. While some companies are hoping IP will be the dominant standard, many older companies have built networks and technologies on different standards, and even proprietary standards. Incumbent smart meter companies like Itron, Landis+Gyr, Elster and Aclara (part of ESCO Technologies) have already expressed concern over language in the stimulus bill that emphasizes Internet protocol for the smart grid.

Itron’s Moore says that while it’s easy for a company like Google to say that consumers should be able to access energy data for free through the Internet, the current system is just not architected that way. There are issues with security, utilities controlling their own assets, and keeping costs down — IP is part of the smart grid network, but there are a lot of other factors in the network, she says. Google itself, has admitted to the technical challenges of free, open-standard energy info in its CPUC comments, but said:

While we recognize there are some limitations today on the ability of utilities to provide data to customers in this manner (even with AMI), we believe that advances in Home Area Network technologies will make this entirely possible in the near future.

You can bet that if Google was the sole architect of the smart grid it would build it like the Internet: based on IP. That’s something that the companies that have built a business based on their own protocols don’t want to see, and you can bet they’re thankful that Google is still just dabbling in the energy info space.

  1. [...] biofuel production without killing the environment or water supplies, at Green Inc. Google’s entry into the smart grid field has sparked both excitement and fear as the giant will reshape the nascent industry, at [...]

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  2. [...] in annual revenue and its constant noise about open standards and free access to information, is hard to ignore when it crashes into an unsuspecting industry. As cell phone companies, publishers, advertisers and software makers have all seen over the years, [...]

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  3. I really don’t know what value Google would be providing here. People’s homes need some physical sensing. (That Dryer isn’t going to monitor itself.) Some kind of pricing information needs to be provided by the utility. Many consumers will want and demand a non-computer interface to access and review this information. And finally, there’s not that much grid-wide processing to be done, just lots of local choices that might feedback and alter pricing.

    The fact that google can make a nifty graph on your computer (for FREE!!!) doesn’t really impress me too much. Send me a wireless current monitor for free (make that a dozen or so) and then I will perk up a bit more.

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    1. @Jim. Think of Google PowerMeter as the energy equivalent of Google Analytics. You’re absolutely right that it requires a sensor (versus a snippet of javascript) but I think it’s a fair bet that the current iGoogle widget will grow into a much more robust analytical dashboard in time. I wrote more on this in this Big Ideas for 2010 post:

      http://www.energycircle.com/blog/2009/12/31/10-big-ideas-home-energy-efficiency-2010

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  4. [...] Malik | Wednesday, February 11, 2009 | 6:46 AM PT | 0 comments How Google’s PowerMeter will impact the smart meter business. [...]

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  5. I don’t see how Google is moving into the utilities turf. Are they going to start generating power? No. If anything, this will probably help utilities keep costs down when upgrading to smart meters given Google’s propensity for setting prices low.

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  6. @ Josh, Google won’t be acting as a utility, but they are calling for consumers to have real-time, free access to their energy data in an open-standard, easy to understand approach. Pretty much no utilities in the U.S. currently have an energy info system set up like this and many will resist it if there are significant added costs.

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  7. Great article, Katie. It will be interesting to see how Google’s entrance affects (or upsets) the business models of startups. Will consumers pay more for another service when many will be content with an easy and free tool on their iGoogle page?

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  8. Google is smart to team with Tendril. Tendril’s TREE platform is top notch.

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  9. I am glad the Google has jumped in to ‘disrupt’ the smart energy marketplace. So far, this rodeo has been ‘all hat, no cattle!’

    I wish that they had also teamed to support Natural Gas smart meters

    But I am very disappointed that PG&E in currently NOT scheduled to install smart meters in the heart of Silicon Valley until December 2009 and beyond. There should be a way to allow motivated users to shorten that delay.

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    1. on approximately Feb 10, 2010, PG&E Installed the smart gas meter monitoring at my house in silicon valley.

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      1. Yes, the PG&E sub-contractor arrived at my door step and installed the GE Smart Meter today: 05-FEB-2010. They also tried to install the gas meter smart meter on the face of the old meter, but due to a poorly designed installation back in the 70s, it does not fit. It will be interesting to see how PG&E resolves this.

        The GE meter has a sticker under glass with Silver Springs device address on it.

        Now I need to go back and learn if the Google Power meter / PG&E relationship has unfrozen. It is not clear to me that I will be able to use Power meter any time soon.

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  10. From over here in the UK, this is pretty interesting stuff. The value that Google will add, and what will scare utility suppliers, is the prospect of them having constant face to face contact with the end consumer. That’s something that utilities have failed to achieve, and are consequently extremely poor at improiving the efficiency of consumers homes – or very simply flogging them some energy saving kit. The fact that Google is joining forces with Zigbee says it’s willing to tackle smart metering properly, with the right resources and skills behind it. It’s going to be very interesting indeed!

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