Energy efficiency may be the cheapest way for utilities to reduce power demand, and thus avoid building expensive and polluting new power plants. But that doesn’t mean it’s easy to pick and pay for the projects that give them the most bang for the buck.

In fact, all the work that goes into doing a commercial building energy retrofit, from the initial customer contact and energy audit and assessment to the design, funding and execution of a project, can serve as a significant bottleneck for utilities seeking to hand out billions of dollars in energy efficiency rebates, incentives, cost-sharing grants and other such efficiency-boosting funds.

IT can help smooth that whole process, and unlock some pretty hefty acceleration to market as a result. Take FirstFuel, the Lexington, Mass.-based startup with data analytics expertise and a software platform that crunches 15-minute-interval meter data to yield a “hands-free” energy portrait of buildings, on their own or as a portfolio spanning cities, states or regions.

FirstFuel has raised $12.5 million so far, and has deployed its “inverse modeling” techniques to such customers as the U.S. Department of Defense and several unnamed state government agencies, large U.S. utilities and European utilities. Now it’s starting to get some results back -- and they’re pretty impressive.

In some cases, FirstFuel’s utility partners have seen a six-fold increase in their “energy efficiency sales cycle, the time it took them to engage one customer to take results,” Swapnil Shah, CEO, told me in a Tuesday interview. Another way to describe it, he said, is taking a process that usually takes months, and compressing it into days.

“Today it takes an average of two weeks to a month to get a human out to a building and engage the customers,” he said. Another eight weeks or so may pass to get a customer to take action, in terms of things like replacing lights for a single-digit percentage gain in efficiency, re-commissioning an out-of-whack HVAC systems for low-double-digit savings, or going whole hog and installing sensors, submeters and intelligent energy controls to go after the impressive high-end savings of up to 50 percent or so.

Then, of course, the utility has to measure the efficiency impact of that spending, to qualify for various state mandates, he said. That can take another couple of months using traditional methods. But in FirstFuel’s case, “we automate that entire process into a week,” he said.

Then, of course, there’s the scale possible by using FirstFuel’s cloud-based platform for crunching meter data and coming up with building efficiency insights, he added. “In the time it takes that entire lifecycle to happen for one building, we’re doing 100 buildings, identifying 100 times more opportunities, doing 100 times more engagements,” he said. While that’s not so important to individual building owners, it’s a big deal to a utility that has millions of commercial and industrial customers to sift through, looking for the best targets for efficiency gains.

Turnover time is a big deal in a business that’s measured in the billions. The U.S. utility sector spent about $9.1 billion last year in efficiency programs, and helped customers save $13.3 billion in return, according to the Consortium for Energy Efficiency.

But the CEE’s figures also show that, of the $7.5 billion budgeted for utility efficiency programs in 2010, actual expenditures only added up to $6.5 billion -- indicating that utilities are hard-pressed to identify, prove out and verify projects fast enough to spend the money they’ve got. Likewise, we’ve seen states act very slowly to start spending the billions of dollars in Department of Energy stimulus grants given out over the past two years, another indication of a need to open more markets.

In the meantime, a study out this spring from Deutsche Bank and the Rockefeller Institute found that the U.S. commercial building efficiency investment opportunity was more like $279 billion over the next decade, and could yield nearly four times the energy savings, to the tune of $1 trillion, over that time -- if investment could be grown to match the scale of the challenge.  

Helping speed that pre-project stage of efficiency spending could really open up the throughput on investments that, by most measures, are guaranteed to yield reliable ongoing savings over time. FirstFuel says its unique way of crunching 15-minute-interval meter data to yield building-specific energy insights sets it apart from the competition.

Fellow Boston-area startup Retroficiency is also promising a deep-data-crunching version of hands-free building efficiency auditing and project recommendations, and has landed partners like property management firm Jones Lang LaSalle and utility efficiency program contractors CLEAResult. The utility efficiency program contracting space is a busy one, with energy services companies like Ecova, EnerNOC and ConEd Solutions managing projects across multiple states.   

On the smart building side of things, startups like SkyFoundry, SCIEnergy, BuildingIQ, Lucid and many more are bringing more data collection and analytics to how individual buildings can cut waste and optimize power use. In the meantime, giant energy services companies (ESCOs) like Honeywell, Johnson Controls, Schneider Electric, Siemens, Eaton, and others are promising smarter software to link their huge installed base of building controls systems to more efficient use, and have bought their share of startups in the space to help out.

One big problem utilities face, Shah said, is that over the past decade or so, they’ve already fixed the biggest and most obvious targets, like large industrial or corporate power users or local government agencies.

“A lot of those largest customers have been tapped out,” he said, leaving a messier mix of mid-size commercial, small retail stores and restaurants, laundry shops and bingo parlors and, of course, the residential market. That, of course, increases the need for scale in your efficiency program management, as well as some way to manage ongoing customer relationships over time, just like telecommunications and financial services companies do today, he said.

In that sense, IT can make efficiency itself more efficient -- and that could open up hundreds of billions of dollars in preventable energy waste, now “lying idle,” as Shah put it, for lack of the money and time to track it down and do something about it. It’s yet another example of how big data challenges are driving utilities and building owners toward new technologies to manage the complex challenges they face -- in this case, something as seemingly simple as handing out free money to save energy.

Tags: building energy, demand response, eaton, efficiency, energy efficiency, enterprise it, firstfuel, green building, honeywell, johnson controls, policy, retroficiency, schneider electric, siemens, smart building