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After a combination of federal and state initiatives, as well as a far-reaching rollout of smart meters, home energy data in California has finally emerged as a platform for innovation and entrepreneurs. New startups working with energy data don’t need tens of millions of dollars in funding, long-standing partnerships with utilities, or elaborate hardware and sensors to collect the data. They just need new ideas, some smart software and the Internet.
Last week I met with a new startup called Ohmconnect — they officially launched at the Launch Festival about a month ago and are now part of the latest batch of 500 Startups companies. The team is just three eager and passionate entrepreneurs: co-founder and CEO Matt Duesterberg, a former electricity derivatives trader and mechanical engineer from Stanford; co-founder Curtis Tongue, who has a background in business development; and community manager Matthew Levene, who just joined the founders last month.
With just a few months of web development, Ohmconnect has managed to build a site where pretty much anyone in California can enter their utility account information and make money — using a PayPal or Venmo account — by lowering their energy consumption when demand spikes in the state (like hot summer afternoons when everyone returns home from work). The process is called demand response, and many large and small companies have spent years focused on new ways to use technology to facilitate it. But few companies have created products to allow consumers to directly engage in it without utility participation and without consumers having to buy extra connected devices in the home.
The idea behind the site was to democratize the energy markets that traders — like Duesterberg in a former life — now take advantage of. The energy markets are now only able to be democratized in California (and in a few others states like Texas) because of a bunch of complicated work done by a variety of federal and state initiatives, like the Department of Energy’s green button program, the desire by the California Public Utilities Commission (CPUC) to highlight residential demand response, the way California’s Independent grid operator CAISO operates, and orders from the Federal Energy Regulatory Commission throughout the years.
Beyond demand response, energy data can be valuable for innumerable reasons. Ohmconnect also provides data visualizations and feedback to consumers regarding how much energy a home has consumed, how dirty or clean the energy consumed was (and from where) and other information about data use of the community and peers. Duesterberg formerly worked at the utility data analytics company DataRaker (bought by Oracle) and helped build solar data software for a startup called kWh analytics that received a grant from the Department of Energy’s SunShot program.
To be sure, Ohmconnect is brand new and it is just starting to build out features and bring in users. Currently to participate in demand response events via Ohmconnect, users manually turn down their own energy use via recommendations. In the future Ohmconnect plans to add control capability so that connected devices — like a Nest thermostat or a Tesla car — could be remotely turned down (or charging delayed). The savings isn’t all that large at the moment — up to $130 per year, Ohmconnect promotes on its website.
Most of the companies that are focused are residential demand response are currently doing so through smart and connected thermostats and partnerships with utilities. Nest (bought by Google), EcoFactor, EnergyHub (bought by Alarm.com), and even Opower, are all using managed thermostats to shave off peak home energy use so that the occupant doesn’t notice the lowered energy use — they just get a lowered energy bill at the end of the month. If Ohmconnect adds automatic home device control to its features, it will be competing with companies that already have a much larger device footprint in the home and relationships with the connected device makers.
Other companies see the value of demand response, but see a much larger market selling services to utilities, instead of consumers. AutoGrid is selling demand response analytics products to utilities to help them better manage demand response programs and make them more nimble. Gridium also sells energy data analytics tools to utilities and businesses. Bidgely uses energy algorithms to better identify and predict which appliances and devices in the home are consuming how much energy, and they use this data to sell services to utilities.
The reason most startups aren’t focused on building direct-to-consumer demand-response platforms is because a lot of consumers don’t know and don’t exactly care about participating. That could be Ohmconnect’s hardest struggle, too: getting the word out about its site and convincing users that it’s valuable enough to be worth their time and attention.
Whatever the future holds for Ohmconnect, it is an example of young entrepreneurs that are still eager to work on hard and important problems like energy, in contrast to the bubble that’s been brewing in Silicon Valley around social apps and sites. I think there’s a lot more of these passionate entrepreneurs out there than people realize, they just get less coverage in the media because some of these issues aren’t so sexy (like energy efficiency). Ohmconnect’s founders say they were inspired to build the company to contribute to helping reverse the changing climate.
Ohmconnect is also proof that thanks to a lot of work by a lot of entities, home energy data has emerged as a platform that can support the type of innovation and experimentation that other sectors like online advertising have benefited from for years. And that’s a good thing.