PowerIt Solutions helps industrial plants save energy. Apparently indutrial giant Siemens and top steel maker ArcelorMittal think it does a good job.
That's one way to explain the $6 million B round that Siemens Venture Capital and ArcelorMittal's Clean Technology Fund invested in the Seattle-based company Tuesday.
The venture arms of the industrial giants joined previous investors @Ventures and Expansion Capital Partners, which got PowerIt going with a $7.1 million A round in June 2007.
Chalk up another win for energy efficiency. Wasted energy is wasted money, and utilities are willing to pay companies that can waste less – particularly at peak load times. But cutting energy use isn't nearly as expensive as building new energy generation capacity – solar and wind power included.
That's helped companies like PowerIt and EPS Corp., which also helps cut power at factories, raise millions in the midst of the recession (see EPS Gets $30M to Cut Power at Factories).
A host of companies large and small offer those kinds of services in commercial buildings, including Siemens, Honeywell, Johnson Controls, Echelon, as well as startups like Cimetrics and Tririga, (see Controlling Energy Consumption, A Million Square Feet at a Time).
But while turning down the power in a commercial building usually involves little more than a bit of extra heat and dimmed lights on hot summer afternoons, industrial sites can be a bit more complicated, PowerIt President Bob Zak said.
That's because shedding load at a steel mill or a food processing plant can halt a production run, unless it's done properly, Zak said.
"We're a new company, but we're leveraging 15 years of experience doing this," he said. The company started in Sweden in 1994 and entered the U.S. market in 2003, he said. A few years later, it was reformed as a U.S. company and came out with a web-enabled version of its technology called Spara EMS.
Going open source allows PowerIt to integrate with a host of other building control systems, Zak said. PowerIt also makes its own hardware and wireless controllers to control equipment's power usage.
Each factory has its unique challenges and opportunities to save power, he noted. A food processing plant, for example, can turn down power on refrigerators containing produce that isn't scheduled to be processed that day, meaning that the refrigerator doors will stay closed and retain cold better than those that must be opened, he explained.
It helps industrial sites cut power while keeping plants running, to avoid paying peak demand charges when they exceed a maximum load set by their utility. Those are charges large power users agree to pay as a way to discourage using more electricity than the utility is prepared to deliver.
On those savings alone, customers can pay back their investment in less than two years, Zak said – important for plant managers that have a lot of money-making investments to weigh against energy savings.
It also gives customers a chance to participate in demand response programs from utilities or aggregators like CPower and Energy Curtailment Specialists, which PowerIt works with, Zak said.
And of course, finding ways to use less electricity is a money-saving goal of its own.
"The biggest competitor that we have is just getting the customer over the hurdle of doing a project in the first place, taking a proactive approach to treating energy like the raw material that it is," he said.
While neither Siemens nor Arcelor are now PowerIt customers, Zak said that the company hopes to work with Siemens building automation and power metering business units to find "possible alignments of technologies."