Efficiency 2.0

Joining the slew of energy monitoring programs recently launched - Google Powermeter, Microsoft Hohm, GE’s Home Energy Manager, and eMeter, to name a few - we’ve just become aware of a dark horse candidate that has for four years been quietly developing what may be the most user-friendly home energy program yet.

 
Efficiency 2.0, a New York based startup with backing from a number of Connecticut hedge funds, has already partnered with about the same number of utilities as Google PowerMeter, according to Earth2Tech.
 
Efficiency 2.0’s mark of distinction is its math.  The company has developed complex algorithms well beyond the scope of what the big players have yet developed.  Designed to tailor energy-saving recommendations based on demographic and personal information, the program would work much like - to use Earth2Tech’s apt comparison - an Amazon or a Netflix, which personalize product recommendations based on a complex combination of user history, ratings, preferences and geography.
 
This is a smart move.  In all things pertaining to energy consumption, geographic differences matter. As Wired noted earlier this year, Efficiency 2.0 deduced that upgrading to an energy efficient refrigerator would save about 1,000 lbs of CO2 annually in Chicago, but only 582 lbs in New York. Alas, the fruit that hangs low in California may be harder to reach in Michigan. Customized information, particularly geographical information, is invaluable to a user looking for the best options to reduce energy usage and the relative impact of that reduction.
 
Although the program is being marketed to utilities (and we have long argued that the goals of energy efficiency are best served when information is placed in the hands of homeowners), the business model is nonetheless innovative.  The platform is being marketed mainly to “decoupled” utilities, those whose profits aren’t determined by the amount of electricity they sell.  For these utilities, the more customers reduce energy consumption, the more subsidies the utility is eligible for - so there is real incentive for an energy management tool like Efficiency 2.0 to work.
 
Given that the company is targeting utilities in what, across the country, is a diverse fiscal and regulatory landscape, as well as an increasingly competitive market for home energy management tools, it will be interesting to see how the startup fares.
 
The real test for us is whether this platform, which on the surface is so consumer-focused, will achieve broad penetration with utilities as their primary customer target.