It can be tough to understand energy bills. That's true whether you are a homeowner in the U.S. or a factory owner in China.
The latter group now has EEx Charge, a new cloud-based tool to help manage and reduce energy bills. Efficiency Exchange developed the software in the U.S., but it is a product that is intended solely for the Chinese manufacturing market, which is estimated to encompass 5 million to 7 million factory sites.
“We respect the manufacturers as their own businesses,” said Taryn Sullivan, CEO and founder of Efficiency Exchange, “and we want to solve their problems first.”
Sullivan spent about seven years working for large American retailers with manufacturing in China, Taiwan and India. Her experience with Chinese manufacturers led her to conclude that there were pressures on the factories to improve energy efficiency, but that the consulting and auditing options were neither cost-effective nor scalable, and that software tools generally were not tailored enough for the needs of the Chinese market.
Although Sullivan started her career working for multinational brands, she saw that the solution had to be local. Many facilities managers in China may have the equivalent of a high school diploma, so a complicated software platform likely would not work.
“You’re working with a different user,” Sullivan said. “It’s not a typical enterprise system; it almost looks like a consumer product.”
EEx Charge requires the name and location of the factory and about ten data points from the utility bill, such as reactive power charges and consumption data. To make it easier to enter the right information, the dashboard mimics the layout of factory's local power bill.
With just the limited data points, EEx Charge runs analytics that mimic what a consultant might do with a handful of utility bills in hand. The result is not a virtual audit, but more basic recommendations, such as ensuring the factory is paying the right amount in the first place. Customers average a 15 percent to 20 percent rate of savings.
The low-hanging fruit does not involve swapping out motors, or even light bulbs. Instead, the savings might come from maintenance on equipment to reduce reactive power or how the factory buys power. In China, factories either buy power based on how much their transformers are rated for, or they can buy less power based on demand, but pay slightly more.
Sullivan said EEx can help factories evaluate the best purchasing agreement for their needs. The annual subscription is based on how many power bills the factory has, which correlates roughly to how many transformers are used by the customer. The fee is about $200 per bill per year.
One path to market the company isn’t taking is to push the product through supply chains via the types of multinationals that Sullivan used to work for. Although some companies have approached Efficiency Exchange about supplying this product to the factories they work with, Sullivan is holding off on that for now, because “people rely on the brands too much to be a channel to customers.” However, factories can use EEx Charge to show retail customers progress that they are making.
Once customers get a taste of savings, many are asking for more functionality. Sullivan said they have helped some customers install smart meters to better understand their power use, and in the future the company could offer retrofit recommendations, such as more efficient motors to further reduce reactive power charges. If customers use the product for one year and are not happy, there is a money-back guarantee.
The Efficiency Exchange staff is small, comprising approximately six people split between the U.S. and China. The company, which currently has about 100 factories using its software, is backed by Blue Tiger Ventures and another early-stage investor that is not named.
Efficiency Exchange is working with manufacturing associations and technical institutes that do factory training to expand its reach, as well as relying on word of mouth from satisfied customers. “The network effect is stronger in China than anywhere else in the world,” Sullivan said. “There are lots of avenue to scale.”