High-end gadgets aren’t really working for the home energy management market. Will an option that’s free, web-centric and doesn’t require utility permission for energy data be a hit? That’s the idea behind Earth Aid, a startup that launched its beta site about a year and a half ago, and this week, according to a filing, raised its first round of $4.04 million in institutional funding led by Point Judith Capital.
The site’s secret sauce is based around the algorithms that can help users — and the site — gain access to utility data. If your utility has an online account, and you give Earth Aid permission to link that account to its system, then the site will pull in your energy consumption data to its network. Compare that to some free web-based energy management tools like Microsoft’s Hohm (s msft), and Google’s PowerMeter (s goog), which tend to only access utility data via a partnership with the utility.
Earth Aid then uses that data to offer the user recommendations for how to reduce energy consumption and also creates a sort of social network around energy consumption. A user can see how they stack up against their “friends” (people with whom they’ve agreed to swap energy data) and they can see where they stand within their “community.”
Earth Aid CEO Ben Bixby told me in an interview on Wednesday that the company plans to use the funds for growing its site and service. Currently, Earth Aid has “tens of thousands of households actively using the Earth Aid beta.”
The company also plans to launch the next generation of its product soon, which Bixby says will have more tools for engagement and discovery of energy-efficiency products, as well as more ways to incorporate higher resolution data. (Right now, if the company is tapping online utility bills before smart meters are installed, it’s not uncommon to have just a once-a-month energy bill figure.)
Earth Aid is facing a very new market — consumers starting to think about home energy management — and one which has seen a variety of failed experiments, as well as new startups emerge in recent years. Bixby compared Earth Aid to a Mint.com for energy, which is a metaphor I’ve heard a few times before, from the now defunct Hug Energy, from Efficiency 2.0, and from OPower, which recently raised $50 million from Kleiner Perkins and NEA.
Because Earth Aid’s business model isn’t based around utilities (unlike OPower and Effiency 2.0) the company needs to bring in a lot of users. That will depend on creating a compelling service (bringing them back and adding value) and also marketing (bring them in for the first time).
Bixby explained to me that the company is generating revenues based on affiliate and lead generation. For example, the site successfully connects you with a solar installer in your area and brings in a lead gen fee. Another company building a business around energy lead gen is Wattbot. The other way Earth Aid will look to make money, Bixby says, is to make co-branded software as a service products.
I also thought that perhaps utilities wouldn’t necessarily like the fact that Earth Aid is making a service around data that they aren’t giving permission to use. Utilities don’t necessarily have the same mind-set as Internet firms, which often support the idea that the data is the consumers’ to use at will. Bixby said the company hasn’t gotten push back from utilities, and the utilities, in fact, like the service because it’s a value-add. I asked a competitor, which has a service that relies on utility permission, what they thought about this question and they told me awhile back:
Once there’s a standardized way to get this data, that might throw a wrench into the Earth Aid business model. I’m not expecting standards to get hashed out anytime soon, so they probably have quite awhile to build up a user base. I definitely think there needs to be a website that delivers this type of energy management functionality and gets utility customers excited about energy efficiency, but it will be a difficult market to crack.
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