Just because Google and Microsoft have bowed out of the home energy management game doesn’t mean it’s not a growth market. For companies with the sole focus of giving people more insight into their utility bill -- and how to curb it -- opportunities continue to arise.
Opower announced on Wednesday that it is reaching across the Atlantic by inking a deal with First Utility in the U.K., one of the country’s largest independent energy companies. All of the utility’s 65,000 customers will receive Opower’s energy management program, which includes reports, tips and alerts via snail mail, a web portal, email, text messages and social media initiatives.
Unlike the piecemeal approach of smart meter implementation in the U.S., the U.K. has called for every home to have a smart meter by 2019, which will open the door for companies like Opower that want to provide analytics and services on top of that data. First Utility is expected to complete its smart meter deployment by the end of 2012.
The U.K. also has a deregulated market where consumers can choose their retail electricity provider. For First Utility, which is looking to pull customers from the incumbents like British Gas, having a customer-facing platform is another way to win and keep customers. “We’re seeing an evolution from being power providers to becoming energy management service providers,” said Ogi Kavazovic, Senior Director of Marketing & Strategy for Opower.
The information is badly needed in the U.K. While Americans gripe about their monthly utility bills, British customers might pay estimated payments all year long and only receive an annual bill.
That lack of visibility is one of the reasons that the British government has called for nationwide smart meters. “Their interest is to push the utilities for real energy savings,” said Kavazovic.
The U.K’s Department of Energy and Climate Change also just released a report about how to empower people to save energy through rebates or other programs. Opower was one of the companies mentioned in the section about giving people visibility in their energy bills. “The U.K. government is a fan of behavioral science and what we do with it,” said Kavazovic.
Although Kavazovic said that they hoped to do more business in the U.K., Opower isn’t limiting itself to the British Isles. Opportunities in other deregulated markets, like Australia or other parts of Europe, are also being pursued.
Opower says it has about 10 million households under its belt in the U.S. and now that it has tailored its data sourcing and analytics for one other country, it will be easier to complete more international deals.
Currently, Opower’s success stems from its low-tech approach of behavioral science blended with multiple delivery channels, from paper to electronic. However, as utilities transform themselves into energy management companies, moving away from just delivering power, some customers will require hardware to either take part in peak shaving programs or just cut energy use overall.
Opower consistently delivers about 4 percent savings, but steady double-digit savings require some hardware for control and automation. Opower said it will be ready to adapt as the market matures. “We’re trying to add things to our platform at the speed of consumer demand,” said Kavazovic. “It starts with information -- but it doesn’t end with information.”