Startup: Lucid Design Group, Network Effect on Energy Use

luciddesigngroup_logo2.jpgCan the social network effect change energy consumption habits? That’s what Oakland, Calif.-based startup Lucid Design Group is looking to find out. The 5-person company, which was founded in 2004 out of research at Oberlin College, sells a software and sensor service that monitors the real-time use of electricity, natural gas and water.

The sensors collect data on electricity and other resources consumed, then use a dashboard to display the amount of money both spent and saved. The company is hoping to add more of a social network component, so consumers can, say, compare their savings to their buddies online. The company has already set up its system in 50 or so buildings – mainly commercial – and is profitable.

But, as CEO Michael Murray puts it, “the residential market is the holy grail.” To that end, the startup is now taking a bit of a risk by shifting its focus toward the average consumer. Not only is the residential market bigger (i.e. more financially attractive), but Lucid wants to cause a behavioral change for homeowners:

“The once-a-month utility bill is inadequate — behavior change needs immediate and actionable feedback. We can’t rely on guilt and bleeding hearts to change consumption habits.” – Michael Murray, CEO Lucid Design Group.

Murray has limited but tangible proof underpinning his belief that real-time savings and consumption info can change habits. In a competition at Oberlin College, the company found that its system prompted students to cut their electricity consumption by more than half. We’ve written about how companies working on technology like smart thermostats and meters are looking to have a similar effect; utilities are starting to test some of these technologies as well.

Not only can knowledge of personal consumption change behavior, but the idea is that the network effect could amplify that experience. Think “Facebook meets green,” explains Murray. Lucid hasn’t worked out exactly what the social network component will look like, but it’s easy to imagine an application on your Facebook page proclaiming your certified green savings habits to your friend list.

Lucid won’t make its service available to homeowners until it’s more consumer-friendly; currently, for example, the system requires an electrician to install. Ideally, the company will sell a system that the buyer can install for roughly $200 through a distribution channel like Best Buy (BBY), and then charge $3 or so per month for a service subscription.

Currently the company is funded by friends and family. But in order to shift the focus toward the consumer, Murray and his team are looking for additional funding. They are also one of 50 finalists that have been chosen by the California Clean Tech Open.

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