Google's PowerMeter Bypasses the Smart Meter, Signs Up First Gadget Partner

TED5000When Google (s GOOG) started talking about its energy management web tool PowerMeter earlier this year, a big hurdle quickly became apparent: The search engine giant’s market for the device would be limited to consumers whose utilities are deploying smart meters (meters that have two-digital communication). That’s a small piece of a very small pie, given only a little over 6 percent of U.S. electricity meters are smart. But now Google says it’s able to bypass the smart meter and today the company tells us that it has signed up its first device partner, Energy Inc, which makes The Energy Detective (TED).

The good news for consumers is that we can start using Google’s free energy monitoring software that much sooner. People that own, or plan to buy, Energy Inc’s latest gadget, the TED 5000, can opt-in to use PowerMeter as its online interface and connect with their Google account and the iGoogle gadget. Google says no data will be sent to the customer’s Google account unless they decide to opt-in. The TED 5000 costs around $200 (up to $300 with additional features), can be bought online here and requires an electrician to install.

Google has been working on the strategy of partnering with device makers for PowerMeter for a while. Back in April Google’s Tom Sly told me that the company was actively talking to gadget makers to work with PowerMeter, and Sly told us today that they’ve been talking with Energy Inc for about a year.

The advantages of bypassing the smart meter aren’t just the quick deployment times of these energy management devices. The set-up could also offer the customer more detailed and quicker energy data than data coming off of smart meters. Devices like TED are connected to the user’s home broadband connection and, working with PowerMeter, can be quickly displayed to the customer in almost real-time. TED 5000 will show energy data via PowerMeter every 10 minutes.

In contrast, many utilities are building smart meter networks that can significantly delay the time it takes the energy information to reach the customer. As we pointed out in this article, utilities today are largely designing smart grid networks to collect data from smart meters in a time frame that ranges from between every 15 minutes to an hour, then bringing that data back to a collection point on the network. From that collection point, many utilities are only bringing data back to the utility back office where the numbers are processed and packaged for consumers once a day. So the info coming off of smart meters will often be from the previous day’s energy use.

Utilities say the delay comes from the fact that they have to bring the data back to the control center, process the information and connect it to the user’s billing account. Remember most utilities’ networks aren’t exactly robust given cost constraints and the fact that information technology hasn’t traditionally been their strong point (though hopefully that will change in the coming months and years). From the perspective of the utility, the data that goes directly from TED to PowerMeter and to the consumer (bypassing utilities’ networks) probably won’t be considered “revenue-grade,” predicted Google’s Sly, meaning the utility won’t likely run a billing program around it.

But Energy Inc and Google have both been working directly with utilities, and TED and PowerMeter can be incorporated into utility networks in a variety of ways. President and CEO of Energy Inc, Dolph Rodenberg tells us that about 40 percent of its sales come from utilities, but declined to name its utility customers. Energy Inc was actually founded back in 2001, before energy management was a hot topic anywhere.

Why is close to real-time energy data important? Carrie Armel, research associate at Stanford’s Precourt Energy Efficiency Center, told me back in June that the more frequently energy data is given to the consumer, the more engaged the consumer is likely to be. Changing energy consumption will come from a behavior change, and our brains are hardwired to respond to quick feedback, said Armel. In addition I think an ecosystem of innovation and new applications that can help change consumer behavior can more easily be built up around a robust network that delivers close to real-time information (for my comparison to GPS and real time information, read here).

The TED-PowerMeter combo only works for North American customers and the deal isn’t exclusive for either PowerMeter or TED. Google hopes TED will just be the first of many devices it will work with — and that this announcement will bring in more energy gadget makers (so reach out to them folks). But given TED is Google’s first gadget partner for PowerMeter, the device will give the company a sizable early platform for this early version of PowerMeter (there are already thousands of TED 5000’s on the market). In line with Google’s “no business model” strategy for PowerMeter, Google isn’t making money off of the TED devices that will use its web tool.

Google will be able to bring a lot of new users to Energy Inc, and Energy Inc’s Rodenberg called what Google can do for TED in terms of “public awareness” outstanding. PowerMeter will be able extend TED 5000’s functionality by linking its energy management service to computers or even mobile devices, and enable users to compare their energy management to the PowerMeter community (not large today, but could someday be sizable). The PowerMeter deal will also likely help with any financing deals — Rodenberg tells us the company is in the process of raising funds, but not via the traditional venture capital route.

At the end of the day I’m glad Google has finally bypassed the smart meter — it seems like a more fitting place for the disruptive web firm than being forced to develop its tool around slow-moving utility partners that sometimes don’t get the benefits of information networks. And we’re even more excited that PowerMeter is now available for anyone that wants to buy a TED 5000. You can bet I’ll be testing this out right away.