When it comes to saving money on utility bills, good data beats out fancy energy displays any day, say the founders of energy efficiency start-up Opower.
The Arlington, Va.-based company on Thursday officially launched its energy efficiency recommendation service, after months of operating in stealth mode.
Opower, previously called Positive Energy, has signed on with 18 utilities in the U.S. to provide customer usage information and recommendations on how to lower consumption of electricity and heating fuel.
After receiving a monthly bill from the utility, consumers get a utility-branded report which has an analysis of their bills, showing how they compare to people with similar-size homes in their area. Based on a customer profile, home type, and weather information, the reports can suggest steps to trim their bills.
Opower now offers that information through an online portal where people can see historical data and delve down into specific questions. Customer service representatives can also view that profile data to walk customers through efficiency steps.
The bulk of the recommendations fall into the category of "conservation," or changing behavior, said company CEO Daniel Yates. For example, a report might note that one household's energy use is higher than a neighbor and suggest relatively simple changes, such as turning off computers or adjusting the thermostat.
Many states have regulations that give utilities incentives to lower energy consumption of their customers. But in general, participation in programs, such as rebates for upgrading to an energy efficient refrigerator or hot water heater, is not very high.
With Opower's service, consumers are getting between 1.5 percent and 3.5 percent savings in their bills. The company first started with one utility in 2008 and is now used by 2 million customers online, it says.
A single-digit cut in energy use may seem small, but that's much better per capita than typical utility-sponsored energy efficiency programs, said Yates. A 2 percent cut in energy use in half the homes of the U.S. would be the equivalent reduction in greenhouse gas emissions as the entire output of solar and wind power right now, he said.
There's growing interest in the country over the smart grid, which is supposed to make the electricity grid more efficient and reliable. In a home, smart-grid technologies will generally mean a meter that can communicate with a utility in regular intervals. More advanced smart-grid programs have wireless thermostats that can control heating and cooling or energy displays that help consumes get more detailed information on their usage.
Opower software engineers have updated their analytical application, which is built on statistical software from the open-source R project, so that it can take information from smart meters. But Yates thinks there is too much attention paid to the gadgetry that's involved in the smart grid, rather than the goal of reducing usage and generally getting consumers more engaged in a home's energy use.
"We have every belief that in the next 20 years there will be smarter appliances and two-way control thermostats so that at some point, you don't have to think about it and your house will switch to sleep mode when you leave," said Yates. "We want to be the nervous system to help the utility and customer control and set those devices."
In its trials, Opower found that consumers have taken actions on home energy because the reports show personalized data and provide consumers a baseline to compare themselves to others.
"Some people think that real-time data (from smart meters) will solve everything but it's not realistic for a consumer to sit in front of a display watching energy use tick up and down," said Michael Sachse, the director of government affairs and general counsel at the company. "They want a regular check-in with tips on how to fix things. Our belief is that in the long run, analysis and insight will trump real-time data."
The company raised $14 million late last year but does not need to raise more money, said Yates.