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California Governor Jerry Brown recently signed a package of climate-related bills into law to help the Golden State meet its climate goals. Among them were three bills supporting building decarbonization.
Building energy efficiency is a critical component of any successful strategy to curb energy use or decarbonize the overall economy, and typically it is cheaper than paying for generation. And yet enticing homeowners and business owners to take on extensive energy-efficiency projects has remained notoriously difficult.
But there is new a opportunity in the U.S. for energy efficiency to be part of an attractive offering, and not just the cleantech equivalent of being told to eat your vegetables. Energy bundles, in a range of different flavors — from smart-home-plus-solar in residences, to facility maintenance and sophisticated demand response in commercial settings — are redefining energy efficiency. These solutions are not only more palatable, but often more pleasing and more sophisticated than in the past.
“In markets all over the world, we have seen the convergence of energy efficiency, electric vehicles, storage and more adjacent capabilities delivered as one unified solution,” said Deepak Budhiraja, vice president of product management for GridPoint, a Virginia-based smart buildings technology company that works with the C&I sector. “When there is a synergy of products and services, a more powerful, simplified relationship is established with the customer.”
A confluence of factors has made this sort of simplified bundle of products and services possible. On one level, energy consumers now expect to be treated like actual customers (not meters or ratepayers) — a development that has put the onus on utilities and other providers to meet the increasing demand for a range of distributed energy products with innovative, customer-centric offerings. In many cases, it’s new entrants rising to the challenge.
SparkFund, for example, a Washington, D.C.-based energy subscription startup, is combining multiple technologies to offer bundled solutions for C&I customers through its Sparkfund Technology Subscription.
At the same time, the proliferation of low-cost connected devices and as-a-service pricing models reduces the cost of integrating different types of technologies. “This model not only reduces the up-front cost burden for customers, but also enables collaborative bundles of other products and services.” said Budhiraja.
Taken together, this is an important evolution. But energy efficiency bundles should not just be limited to the utility industry, and increasingly, they are finding new outlets. Beyond utilities and energy retailers, “there are other partners, like facility management or security companies, that can deliver a greater value through a converged offering,” said Jason Narod, SVP of sales and business development at GridPoint.
Capturing the lost opportunity
For example, Narod points to Bell Canada offering commercial customers emerging internet-of-things solutions that help manage energy consumption and costs. The potential benefits of these more expansive bundles of products and services are especially obvious for overextended small and medium-sized business (SMB) owners.
“What this really does is unlock the SMB sector, because you have owners of a restaurant franchise, and all they care about is serving more meals at their five locations,” said Narod. “If I’m that person, I know I have to buy electricity and security, but I don’t have time to research a building controls program. It opens the door for an offer from someone they already do business with and trust.”
But the benefits aren’t just limited to owners of SMBs — they apply to all commercial buildings. For its part, GridPoint uses its data analytics expertise to optimize bundled services, such as efficiency technologies, storage, facility management, retrofits, utility programs and demand response. GridPoint can then also uncover additional opportunities based on a customer’s unique energy consumption patterns.
GridPoint offers a foundation to build bundles that allow technologies to grow beyond their traditional functionality, according to Narod. “We drive real savings and can uncover insights about the best products to bundle together,” he added, while also delivering the flexibility utilities increasingly require.
For utilities to get the most out of bundling, it often makes sense to partner. “Utilities are focused on their core business, and deploying energy bundles presents both an opportunity and a challenge,” said Narod. “They could scale more quickly by working with partners who have sales and technical knowledge. It makes the customer experience simple and delivers exponential value through one transaction.”
It’s not just the downward cost curve on distributed energy resources, sensoring and technology that’s making bundles a reality, but also the global shift to mobile.
“Most smaller businesses can’t afford to hire energy managers, but everyone has a phone in their pocket. Imagine an integrated bundle with solar, storage and energy management that connects with the utility in real time on your mobile device,” said Budhiraja. “The bundled solution could intelligently orchestrate events between these assets to maximize value for customers and utilities. Everybody wins.”