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6 ways software rules the clean power economy

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The clean power economy needs hardware of course — billions of dollars have gone into creating more efficient solar cells, meters with two-way communication features, and more powerful batteries for storing renewable energy and running electric cars. But software has been the key focus for investors lately, when it comes to new ways to deploy these clean power systems.

It takes smart software and analytics tools to network clean power devices, integrate them into the electric grid, make money from them and educate consumers about the benefit of owning them. We wrote about the need for more software and services back in 2010. Sungevity, a solar installer, is holding a solar hackathon this weekend in Oakland, Calif., to promote building mobile and web apps.

Here’s a look at how software is making a difference:

1. Power forecasts: Solar and wind power production varies because it depends heavily on weather conditions. But utilities are used to managing the steady stream of power from fossil fuel-based power plants. The North American Electric Reliability Corp. said in a recent report that better wind energy forecasts are needed since data shows that a wind farm could produce anywhere from zero to about 21 percent of its stated production capacity during hours of peak demand.

Because solar energy could come from large power plants or little rooftop systems scattered across cities, predicting solar power output and its impact on the local grid presents a different set of challenges. Creating accurate forecasts for wind and solar will require pulling lots of data on wind speed, clouds and other meteorological conditions. AWS Truepower and WindLogics are two companies that have been at this for a while. More recently, Clean Power Research announced a data and forecasting service for managing a fleet of solar energy systems.

2. Putting energy storage to work: Many pilot projects are underway to see how battery systems could complement wind and solar farms by banking these intermittent sources of power and releasing it into the grid to meet peak demand or stabilize the grid (maintaining a balance of supply and demand is crucial to avoid back outs and other problems). These are largely projects that involve large wind or solar farms. But in the future, energy storage systems could make their way to small businesses and homes and enable their owners to also make money from selling, say, solar power back to the utilities.

Carlos Coe, chairman of battery developer Xtreme Power, told me the bulk of the company’s technical expertise actually lies in the software that controls its battery system to make sure it works well with the control system of a utility or power project developer. Companies that are focusing on developing energy storage software include Growing Energy Labs and Greensmith.

3. Energy diets: Energy costs are set to go up overtime, and that has prompted many commercial and industrial building owners to consider technologies that will help them rein in costs. Being able to accurate predict daily or even hourly energy use and take quick steps to reduce or maintain the amount of electricity being consumed throughout the day requires some hefty data crunching, and that’s what companies like startup GridNavigator are doing. This type of software gives building owners a finer control of their energy use.

Another way to reduce energy bills is to sell unused power back to the utility or grid operator. Some utilities pay their customers to dial down power use during times of high demand in order to avoid blackouts. You can expect new software being developed to serve this demand-response market.

4. Home automation:  Energy management equipment and software developers have historically targeted the commercial and industrial building owners, who tend to be heavy energy users and might be more willing to invest in energy efficiency retrofits to cut costs. The average consumers, on the other hand, doesn’t really give a hoot about monitoring their energy use hourly or daily and adjusting their lifestyle accordingly. At least not manually.

Automating this process, on the other hand, will make a big difference. And this is why devices such as so-called “learning thermostats” from startups like Nest can be a game changer. A learning thermostat figures out its owner’s energy consumption behavior and adjusts the heating and cooling of a home accordingly.

5. Building an ideal solar roof: Solar installers such as Sungevity and SolarCity have all touted their software development expertise in marketing and engineering solar electric systems (SolarCity sought to build an energy auditing and retrofit business by developing software that performs more accurate energy audits and can better quantify saving). Geostellar recently raised nearly $14 million to build a business that pulls together a bunch of data – including weather, roof slope, property values, electricity rates and government incentives for installing solar panels – and sells the crunched data to installers and others who want to hone in on their ideal customers. The company also claims to be able to estimate power production of solar panels on each roof.

6. Solar monitoring: Solar energy systems – whether they are on a rooftop or in the desert – are meant to be long-term investments, so there is a need for good monitoring and management software to pinpoint problems quickly. The ability to check the performance of individual solar panels is partly what makes microinverters – which convert the direct current from the solar panels to alternating current for the grid –an appealing option.

Making monitoring data easily accessible is just as important. GreenVolts, a developer solar energy system that uses mirrors to boost the power produced from solar cells, recently made it possible for its customers to monitor their GreenVolts systems on their smart phones and other mobile gadgets.

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