There are a few paths to the consumer-facing smart grid. You can go device-crazy and try to arm every appliance in the house and building with a sensor and radio to go along with a controller, an in-home display (IHD) and an internet gateway (that in some cases connects to your smart meter in cooperation with your utility). This will allow you to monitor and shut off your appliances remotely.
Tendril, Energy Hub, and apparently, People Power (and others) look to be going that route. Add Alarm.com, ControlPoint, Lucid Design, and Microsoft's Hohm to that list in varying degrees. That's going to be expensive and complicated for the consumer and utility.
The indications on the challenges with this type of solution are the small numbers of in-home displays and home area networks actually deployed by utilities. We've spoken to some industry experts who estimate that the total number of all IHDs deployed is probably less than 10,000 to 20,000 units. Leading utilities are only doing tests in the hundreds or low thousands of units. In any case, it's a relatively small number.
What price and level of difficulty are people and households willing to accept to deliver unknown levels of savings?
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Let's take a quick look at People Power.
Gene Wang is the CEO and founder of "still in stealth" People Power, a startup focused on energy efficiency. It's Wang's fifth startup and he's been very successful in his previous companies which he sold to Agilent and HP (Photo Access and Bitfone, respectively), and with another, Computer Motion, that went public in 1997. Mr. Wang calls himself a serial-entrepreneur and he doesn't hesitate to say that he has made millions, if not tens or hundreds of millions of dollars for himself and his investors. Here's Wang's Hillary Clinton video and NY Times write-up.
Despite the stealth identity, Wang speaks at a lot of industry events. I've watched Gene speak on a number of panels, he's been on at least one panel that I've moderated, and I still have no clear idea of what his company actually does. The startup is VC-funded by New Cycle Capital along with angel investors and already has 70 employees, many from Wang's old team at Bitfone. Although I'm not sure if Gene has divulged the stealthy business plan to his VCs or employees yet.
This might be an example of investors betting on the rider, not the horse.
According to the website, People Power is helping consumers save money on their energy bills while helping to save the planet by reducing carbon pollution. Wang said, "We dedicate an entire coal-fired plant to power the nation's TVs while they are turned off."
People Power just received a $1 million SBIR grant. Their first SBIR money was to "enable automated energy management and conservation within the residential community." The Phase II Grant was to "empower the consumer with "actionable intelligence" using demand response services and simple, internet-enabled consumer dashboards and scorecards."
[Pop quiz time: Name an example of a workable residential demand-response business model -- other than a rolling blackout.]
Wang is looking for a Series B funding round and said that it's been very challenging to raise money despite the "capital efficiency of the firm" and the "great team." He mentioned that Vinod Khosla of Khosla Ventures chose to pass on this opportunity.
In a conversation I had with Wang in March, he said, "People Power is accessing the low-hanging fruit of energy efficiency." He calls the firm "a multi-faceted energy efficiency and smart grid company," adding that "the smart grid starts in the home" and "the consumer has to be educated." Press releases mention that People Power will "monitor and control energy consumption at the appliance level."
The firm has not announced their consumer products, although they have announced their $150 developer's kit. According to the CEO, "We intend to create an ecosystem." Wang also said, "We needed to build this platform to enable our products." Wang hints at the consumer product by saying, "It needs to be drop-dead simple to let the house or building shut off devices, to learn the activity in the house and to dashboard the activity of the home."
The main idea seems to be a multi-mode 900MHz HAN that has extreme reliability and extended range. Wang claims that this network will have twice the range of the 2.4GHz ZigBee spectrum while consuming half the power, and will be the only HAN that directly connects orphan appliances like the dryer in the basement with the outdoor electric meter -- without repeaters. In Wang's view, ZigBee won't work well enough for intra-home communication (despite the fact that the firm joined the ZigBee Alliance in March).
People Power's SuRF (sensor ultra RF) set of open source developer's boards is based on OSHAN (Open Source Home Area Network), with wireless sensors enabled by TinyOS.
Wang claims that "energy management is just like device management," though I say that's debatable. Consumer entertainment devices have a different value proposition and behavioral profile than the world of energy usage. The cost and complexity of networking the home's "internet of things" may not be worth the cost savings.
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You could go the minimalist route like OPower.
With more than $30 million in revenue, OPower is a successful energy efficiency company focused on customer engagement and behavior modification, currently providing millions of homes with in-home energy data and efficiency advice via paper reports or online. The platform is described as advanced customer engagement and the firm says that about 85 percent of its customers will cut power consumption by around 3.5 percent. The customized data lets people know how much energy they're using in comparison to their neighbors and then follows it up with a recommended course of action.
And OPower has done it without having to place any hardware in the home.
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There might be a middle path, as well.
EcoFactor goes after the major energy-drawing culprits in the home, heating and cooling, with a smart thermostat and some software. That takes care of more than half of residential energy usage. Most of the company's value is in the software (as a service), not the thermostat itself. And they are working toward being agnostic with regard to hardware and protocol.
Powerhouse Dynamics tries to focus on power-hungry appliances by monitoring residential electrical circuits.
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Which leaves us with the most pressing residential smart grid question:
How much hardware and attention is the consumer willing to devote to save ten percent or twenty percent on their electric bill? How long before those displays and devices wind up in the kitchen junk drawer?
And the uneasy conclusion:
Home energy monitoring motivations and energy usage pain-points are very different than those for smart phones or consumer entertainment gadgets. Many device-heavy consumer smartgrid startups with consumer-oriented entrepreneurs and their investors are going to learn that good and hard in the coming years.