Home energy management startups face what investors and entrepreneurs have identified as a key conundrum – whether to wait for utilities to help pay for the costs of equipment, or make the case to homeowners to buy the gear themselves.
Ellen Pao, a partner with Kleiner Perkins Caufield & Byers, thinks the route to a homeowner's interest in energy efficiency lies through their security concerns.
That's why Kleiner has chosen to back iControl, a startup offering energy monitoring as an add-on to its home security offering, out of the range of home energy management startups out there, Pao said Tuesday at the ConnectivityWeek 2009 conference in Santa Clara, Calif.
Kleiner led a $15.5 million investment into the Palo Alto, Calif.-based startup in April 2008, in a round joined by previous investors Intel and Charles River Ventures, VentureBeat reported.
The company gives homeowners a web-based and mobile device connection to their home security systems, IP cameras, sensors and wirelessly linked lights, locks and thermostats – the latter an entryway into home energy management. The system plugs into an existing home network.
"We found consumers weren't willing to pay hundreds of dollars" simply to watch and curb energy use, Pao said. "They didn't see the benefit of doing that in the short term."
But when it comes to home security, "Consumers will pay hundreds of dollars to put in new technology, they'll pay $30 to $40 a month to secure their peace of mind... we found through this Trojan horse that we can bring in new technology" for energy management.
Other companies have taken alternative entries into the home to introduce energy management. Control4, for example, is a high-end home security and entertainment system maker that now offers energy management services in partnership with smart grid software developer Gridpoint. It is piloting the technology with utility Xcel Energy's SmartGridCity project (see A Broadband Smart Grid?)
And telecommunications giant Verizon is planning to add energy management to the suite of services it offers with its new FiOS server – a move that other telecommunications companies may be mimicking, according to industry observers (see Verizon to Add Energy Management to FiOS and Are Telcos Eyeing Home Energy Management?)
Something Pao didn't bring up Tuesday is that iControl doesn't get into customers' homes on its own. In January it landed a deal to integrate its technology with gear from top home security firms ADT Security Services, and in April announced a similar partnership with Black & Decker. IControl technology also works with General Electric and Honeywell security equipment.
IControl is part of the Z-Wave Alliance, by the way, and uses the low-power Z-Wave wireless protocol for its networking. Z-Wave, while popular with home automation system makers, has had less success so far in the home energy management market, where rival ZigBee has gained most of the attention (see Sigma Snaps Up Perennial Smart Grid Hopeful Zensys).