How Home Energy Modeling Will Transform the Real Estate and Solar Sectors

As Tendril builds an energy database of every home in the world, the company looks beyond traditional efficiency.

Consumers have more choice and transparency than ever before. With the tap of a smartphone, a person can find out almost anything about what they're buying. But information about the energy component of their purchases is still somewhat limited.

This is changing in the electricity sector, where deregulation and ever-cheaper distributed energy like solar PV are expanding choice. The rapid improvements to modeling, analytics software and metering technologies are also dramatically improving transparency for energy consumers.

There are many other markets where energy modeling is important, however. And the tools to provide consumers with the choice and transparency they've come to expect must improve.

"There's a need for better solutions in markets where energy is relevant," explained Hunter Albright, the senior vice president of new markets at Tendril, a data science and software company focused on personalization of energy in the electric sector.

Over the last decade, Tendril has applied its TrueHome Simulation Model to behavioral energy-efficiency programs, utility customer engagement initiatives, and, most recently, customer acquisition for things like community solar.

The company is now using that model to create a library of energy-related content for markets where data access is limited, or hasn't been effectively harnessed to improve the customer experience.

"The capabilities that we have can help solve some core problems around acquiring new customers, engaging existing customers and activating or orchestrating the activities of customers," said Albright. "They're highly relevant to other sectors."

In the immediate term, those sectors include real estate and rooftop solar -- areas where Tendril's work with regulated utilities on customer retention and efficiency engagement has direct applicability. 

Using physics-based modeling to build the library and expand applications

Tendril's move into new markets is enabled by its core underlying technology: the physics-based model.

Tendril models home energy consumption using physical characteristics of the home such as year built, construction material, and square footage to calculate the heat transfer and energy balance properties of the home. This differs from statistical regression models, which require historical data to make predictions. While utilities in North America have historical data, it's rarely available in markets like real estate and solar.

"The regression model falls apart in these new markets. The physics-based approach is much more universal," said Mark Gately, Tendril's senior manager of decision science.

Tendril has already mapped all 133 million homes in North America and is in the process of mapping out the physical characteristics of homes all over the globe using this model. With local tax assessment records, it's possible to fill the database with information on the size, age and occupancy of homes. Image analysis makes it possible to gather details on the shape and orientation of homes. And Tendril can also simulate local weather conditions based on latitude and longitude.

With all of this information compiled, Tendril applies existing assessments of residential building stocks that help infer information about insulation, infiltration and occupancy. 

The model, which feeds Tendril's constantly growing database, is the reason the company can expand into sectors like real estate.

"Because we can simulate the energy consumption of every home in the North America, we can create a scoring algorithm to compare homes against each other," said Gately. "We can also simulate particular home-specific upgrades. If you upgraded the windows or add insulation, we can simulate those and the return on investment you get for those and provide a very personalized cross-sell offer."

The same is true for solar, where Tendril can use its database to customize and cross-sell solar services.

"We can size systems and simulate solar generation on any home in the U.S. and provide a very personalized return-on-investment estimate for a solar offer," said Gately.

Making real estate more transparent

Within real estate, Tendril is focused on two different segments: the search process and brokerages.

Real estate search sites that help consumers compare homes continue to improve. But energy is not often included among the many dimensions tracked on these sites. Considering that energy costs typically make up the largest monthly expense behind the mortgage, this is a vastly underserved area.

"Energy should be a key factor to compare and filter homes," said Albright.

The second offering is the build-out of energy-related content and software to engage customers who are searching for homes or apartments. There is already a big strategic push in the market to engage with customers beyond just the initial home search. Adding information on how to improve energy use or how to choose a home based on energy consumption could be one way to improve customer engagement.

"The real estate search sites are trying to develop deeper relationships with consumers during a potential home transaction. We're starting to work with them about how they can create ways to get consumers to come back to the website," said Albright.

Brokerages are critical players in home transactions -- also making them a key target. Tendril is providing agents with detailed information about homes in order to educate the consumer about energy expenditures and potential improvements.

"That kind of additional content will allow an agent to develop trust and credibility to help close the sale," said Albright.

Arming real estate professionals with energy information also benefits utilities and retail providers. Providing this type of insight to homeowners and potential buyers creates cross-sell and up-sell opportunities for related products and services.

Expanding solar with better customization

Although solar installers are growing quickly and expanding into new markets, customer acquisition costs for some leading companies are actually going up as they reach beyond early adopters.

With more customized reports using Tendril's modeling, solar installers will be able to speed up sales and make the entire customer acquisition process more efficient. After the sale is closed, customer engagement strategies can be improved by bringing together generation and consumption data in creative ways to make the investment more real for consumers. 

"The solar companies that we've worked with so far don't have the tools to simulate energy consumption and give highly personalized solar ROI offers. That's why they're working with us to do that for them," said Gately.

The utilities are a crucial target as well. In order for solar to become mainstream, traditional power companies need to see it as complementary to their business. With better data, utilities can proactively plan for the future by knowing which consumers are likely to install rooftop solar. That data could also help utilities identify which homes are not suitable for rooftop solar, thus allowing them to plan out different engagement strategies.

Complementary markets

Tendril has been working with regulated utilities on customer engagement and energy-efficiency strategies for 10 years. This push into new markets is an extension and complement to that existing business. 

"We're just taking the capabilities we've already built and expanding them into new verticals," said Albright.

Because Tendril can go into a market and offer complete coverage across all single- and multi-family homes, it makes sense to use that data in more diverse ways. As the company refines its real estate and solar offerings, new verticals will likely open up. "We're setting the foundation for expansion into more new markets," said Albright. 

That foundation will be Tendril's growing database of homes -- the most sophisticated in the world.

"Nobody out there can compete with the amount of utility data or consumption data that we have. And we will continue to get to improve the models as we go forward," said Gately.

Find more details on Tendril's offerings for the utility, real estate and solar sectors here.