Opower Finds Energy Niche

Monday, 28 June 2010 22:47

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An Arlington, Virginia, company that gives consumers a detailed analysis of their energy consumptions is proving to be more user-friendly than similar services being offered by Google and Microsoft. Opower, founded by Dan Yates and Alex Laskey in 2007, has 105 employees and is expected to generate more than $35 million in revenue this year.

Opower takes raw usage data obtained from utility companies and creates detailed reports on how each customer’s consumption compares with their neighbors’ usage. The report also provides suggestions designed specifically for each customer on how to reduce their wasteful behavior in order to better conserve power.  Opower also revamps utility Web sites to send emails and text alerts that update customers on usage.

Teresa Mastrangelo, an analyst with researcher Smart Grid Trends told the Washington Post, “We’re starting to see stronger adoption of Opower’s product by a lot of operators. It’s a very simple way to start educating consumers on how they use energy.”

Opower is contracted by 35 utilities in 16 states and currently delivers reports to two million households. Yates and Laskey anticipate that number doubling by the end of the year.

One of the utilities using Opower is Dominion, which retained Opower in early 2010 for a pilot program in Charlottesville. Spokesman David Botkins says the utility is “very pleased thus far. We wanted to see how the product and the information would be received, and so far it’s been very favorable.”

Co-founder Laskey adds, “When you give people the context to understand how they compare to their neighbors in similar-size homes, it’s a very powerful engagement mechanism and they will pay attention.” He says the average consumer receiving the reports reduces consumption by approximately two and a half percent. “Now 2.5 percent for one house is a small number, but 2.5 percent across the entire country – we’re talking about $5 million a year in savings for customers.”

Mastrangelo says Opower has succeeded because it’s services are more consumer-friendly than services offered by larger companies, such as Google’s PowerMeter, which requires homeowners to buy a monitoring device if they are not signed up with one of its four utility partners. “The Opower product ties into the bill that you are already getting from your utility,” she told the Washington Post. “Customers can understand their energy consumption without requiring a smart grid structure to be deployed or having to put in a lot of devices in their homes.”