Positive Energy sheds light on home energy

If Daniel Yates, founder and CEO of Positive Energy, hits his goal this year, he'll unplug the equivalent of 75,000 homes.

The Arlington, Va.-based company late last month revealed that it has raised $14 million from New Enterprise Associates to build up its software service designed to cut home electricity use.

Because of the recession and a growing interest on cutting wasted energy, efficiency is expected to be one of the most active areas in clean tech. Already there are dozens of smart-grid outfits that make Internet-connected meters, networked appliances, or in-home displays.

Positive Energy is taking a somewhat more traditional tack to the same goal, relying on software-based data analysis and plain-old direct marketing campaigns led by utilities.

The premise behind the company is that people would change their behavior--and lower their energy usage--if they simply had more and better information, according to Yates.

"Everyone knows how efficient their car is. But even at the broadest brush stroke, people don't have the ability to talk about their home energy use, and that's a big problem," he said.

The company has developed a hosted software application that takes in utilities' customer data and generates quarterly or monthly reports for consumers on how their energy use compares to people in the same area.

Utilities use the data to offer more targeted efficiency programs. For example, it could offer a wealthy homeowner an incentive to set up zoned air conditioning.

Its first trial in Sacramento, Calif., was effective enough to cut the equivalent of 700 homes' electricity use. That's only a 2 percent energy efficiency improvement, but compared to most typical utility programs, it's very effective, said Yates.

Utilities are notoriously conservative about adopting new technologies. But the hosted software application means they don't need to spend a lot of money upfront or launch a long installation process.

With the $14 million, which follows a seed round from angel investors, Positive Energy plans to enhance its software to crunch data from so-called advanced meters, which give utilities regular updates on energy demand. It will also give consumers more data online, said Yates.

Yates was inspired to get into the energy efficiency business after being struck at how pervasive environmental degradation was during a 10-month trip from Alaska to the tip of South America. He decided to pursue efficiency at utilities through software because it was an area that would have a big environmental impact while playing to his strengths in software.

The company has 10 customers and is seeing strong demand. In the coming year, federal government incentives could boost the growing number of state-level mandates for utility efficiencies.

"The same week that Google put solar panels on their roofs (in 2007), I read another article about how New York had installed 8,000 (efficient) refrigerators in low-income housing, saving five times as much energy at two-thirds the cost of Google's solar panels. That was my 'Ah ha' moment," he said.

Updated January 10 at 6:50 A.M. PT with corrected name of New Enterprise Associates.