It turns out that people really are the same everywhere.
OPower, which has created a software service that encourages consumers to reduce power consumption, managed to reduce power consumption by around 2.1 percent for customers participating in an energy efficiency program in Minnesota sponsored by Connexus Energy. The cumulative savings from the project came to almost $1 million.
The results are similar to what OPower has seen in tests with utilities in Sacramento and Washington state, according to OPower CEO Alex Laskey -- and that's a big deal. Skeptics have questioned whether OPower's system would work outside of eco-belts and urban areas. The software is rooted in behavioral psychology. OPower compares your power usage with your neighbors and similar households and then nudges you, partly through guilt and partly though handy energy efficiency tips, to keep up with the Joneses. Meanwhile, efficient homes earn the equivalent of gold stars.
The greater percentage of savings come from the more lax households, "but the gap isn't as big as you'd expect," he said. Thus, it works on both Goofus and Gallant. In general, the company curbs between 1.5 to 3.5 percent off a power bill with the average falling toward 2 percent.
Sacramento -- the seat of government in a state with de-coupled energy prices, a green governor and where air conditioning is a major contributor to peak power problems -- is arguably tailor-made for OPower's sort of system. Washington state, on the other hand, is a stronghold of the environmental movement.
Connexus's territory in Minnesota is almost the polar opposite, said Laskey. It is represented in the U.S. Congress by a conservative Republican. Many of the customers live in rural communities or in distant exurbs. And it's Minnesota where household heating is an absolute necessity several months of the year. Yet the results in all three areas are similar.
Laskey also noted that customers become more engaged, not less, as time goes on, the opposite of what some companies with smart thermostats have experienced. The average monthly savings in Minnesota started below 2.1 percent. Now the savings rate is around 2.5 percent. (Connexus has 40,000 homes engaged in the OPower program and the data from those homes is compared with 40,000 control households. The homes in both groups were selected randomly and are scattered randomly through the service territories to ameliorate any socioeconomic or geographic aberrations.)
There is an added potential bonus, too. OPower manages to get a fairly large number of consumers to engage with its programs. A utility, conceivably, could get a 2 percent reduction in power consumption by getting 20 percent of its customers to become 10 percent more efficient.
"We are getting the overwhelming majority of customers to make small changes," he said.
As a result, OPower can potentially become a channel for information on time-of-use pricing and other future programs. "They [utilities] need channels to engage them," Laskey said.
Minnesota is not a de-coupled state where utilities are encouraged to get consumers to conserve power. Nonetheless, the state has passed regulations requiring utilities to reduce power consumption. It also gives bonuses to utilities that hit efficiency milestones. Thus, the utility is making money by curbing power. On average, every dollar spent on OPower can result in $3 to $5 in efficiency savings, he argued.
The results will likely further buoy OPower's rolling success. The company has inked deals with 37 utilities and garnered $30 million in cumulative revenue, a veritable fortune for a greentech startups.
What happens next for the company? There are, surprisingly, few other companies touting similar programs. OPower thus has become the de facto incumbent for the behavioral efficiency programs and pilots. It has also been beefing up its ranks. It has over 100 employees and has been plucking target marketing experts from places like Amazon, eBay and Capital One to develop ways to better pinpoint motivational levers for different customer segments.
The company's biggest competitors, according to Laskey, are Google and Microsoft. Google's PowerMeter and Microsoft's Hohm, however, offer fundamentally different services. Google and Microsoft want to get consumer consumption data and provide recommendations to consumers themselves. Other IT giants have also talked about automating homes to save power.
The software giants are saying that "utilities aren't good at engaging customers and we want to get them out of the way," said Laskey. OPower works with utilities.
That will be a tough sell, he argues. Utilities sell electricity. It is a commodity. Google electrons aren't going to be any more suave or artisan than those from SMUD.
But as OPower racks up contracts, one can imagine others trying to tap into the power of peer pressure.