Opower seeking world domination

Opower, a startup using software and big data tools to help utility customers reduce their energy consumption, is expanding outside the U.S. for the first time. On Wednesday, the company announced that it will be working with U.K. energy company First Utility, which reportedly has about 60,000 electricity and natural gas customers.

First Utility was one of the first energy companies in the U.K. to offer all of its customers smart meters, and Opower will be using the smart meter data to provide First Utility customers detailed mailed reports, as well as access to a website to view energy consumption, text and email alerts about high bills and other social media about energy use.

Energy companies in the U.K. have come under fire lately, criticized for raising their prices and also for providing confusing energy rates. U.K. consumer watch dog company Consumer Focus accused First Utility specifically of increasing its prices for new customers soon after they signed up. Opower’s service could help First Utility’s customers both save money and get better access to information about their consumption.

The deal is a reminder of just how big the energy efficiency and smart grid market is outside the U.S. Countries in Europe like England, Germany, Denmark and Spain are looking to the smart grid to help integrate more clean power, and countries in Asia like Japan and Korea are using their broadband industries to roll out smart grid networks.

First Utility’s decision to use Opower’s online portal, text, email and social media options also highlights how Opower is well positioned to expand its services beyond its standard detailed mailed energy bills, to online and mobile services. Opower’s business model has been successful because utilities send Opower’s detailed bills to its customers automatically (as an opt-out service), and the bills have a very high chance of being opened because the envelope looks like their standard utility bill. But Opower can use that utility connection to move into other forms of home energy management, like potentially one day offering a home energy dashboard.

Opower says its software and services will be able to help save one terawatt hour worth of energy collectively from U.S. homes by the end of 2012. One terawatt hour (or 1 million megawatt hours) is equivalent to the energy consumed by 100,000 American homes over a year, and is worth a whopping $100 million in consumer’s utility savings. Founded in 2007, Opower is backed by venture capital firms Kleiner Perkins, Accel Partners and New Enterprise Associates.