The household water heater isn’t exactly the sexiest piece of equipment to network and control via your smartphone. But then again, neither was the smart thermostat -- until Nest came along.

But like the household thermostat, the value of bringing smarts to the water heater extends far beyond giving homeowners a set of remote-control and money-saving apps to play with. Both represent huge energy flexibility resources -- the ability to turn thousands or more household loads on or off when the grid needs it, or when utilities and energy markets are willing to pay for it.

Last week, Washington, D.C.-based startup Aquanta opened commercial sales of a device it’s hoping could break open the smart water heater market like Nest has done for smart thermostats. It’s an interesting play at getting consumers to invest in a technology that’s been almost entirely driven by utilities and energy services companies to date -- much like smart thermostats have been, until recent years.

“Nest and ecobee and their ilk have changed things. Instead of being top-down and load-control-focused, it was about, 'Let’s make the customer value proposition drive the engagement,'” Aquanta CEO Matt Carlson said. “We’re doing that for the water heater. There are 100 million of these things out there in the U.S. alone, and no one else is bringing an easy retrofit.”

The device itself costs $150, works for both electric and natural-gas-powered water heaters, and takes about 45 minutes and a fair amount of handiwork to install. It includes a sensor that measures the energy coming into and out of the water in the tank, a controller that can turn the heating system on and off, and Wi-Fi to connect to your home router, and from there to your computer or smartphone.

Using Aquanta’s app, users can check on how much hot water they have left, turn the water heater on and off, and receive leak detection and maintenance alerts. But its real selling point is the ability to analyze water heating against household hot water usage, and fine-tune how that energy is used to reduce the amount that’s wasted.

“Between 20 percent and 50 percent of the energy that goes into a water heater is never used -- it’s wasted through standby loss,” Carlson said in an interview. In other words, most home water heaters are sized and operated to provide hot water all the time, even though most households don’t need it except for a few hours per day.

Of course, any technology that reduces water heating better make sure it doesn’t leave homeowners with cold showers. To do that, Aquanta uses a sensor, which plugs into a water heater’s temperature and pressure release (T&P) valve. It’s the same technology developed by the company forsolarwater heating controls under its previous name, Sunnovations.

“It’s not measuring temperature; it’s measuring change in energy,” Carlson said. That’s important, because without that kind of data, it’s hard to determine the relationship between water heater energy use and the changing temperature of the water inside.

“We can discern in fine-grained detail what usage patterns look like and what load patterns look like,” he said. “First, it just starts watching, observing what goes on in this home. Your dashboard will reflect that -- it will show how much hot water you used this week, compared to last week, both in gallons and in energy used. Then it will ask you how energy-efficient you want to be. The user can say, aggressive, medium or not as aggressive, to tell the algorithm, either push the envelope or don’t.”

So far, based on data from its relatively small set of customers using the device over the past year or so, Aquanta has been able to turn this data and control into water heating energy savings of between 10 percent and 30 percent, he said.

In fact, “We think we have the most robust water-heating data anywhere," he said. There are millions of remote-controllable water heaters in the country, using load control switches from companies like Emerson or Eaton's Cooper Power Systems. But they're almost all one-way, pager-controlled on-off switches, installed by utilities that pay customers in exchange for the right to turn off their hot water during times of peak energy demand. Specialty equipment providers like Steffes Corp. are building more sophisticated systems capable of two-way communications and more fine-tuned control, but they're also more expensive than Aquanta's retrofit. 

Aquanta was first launched as part of a Kickstarter campaign in late 2014. “We’ve had units in the field since last spring -- we’ve been piloting this thing for a long time,” Carlson said. “The best studies out there have [included] around 10 to 20 households, that’s what their data set is -- which is really not that great.” While he wouldn’t say how many devices it’s installed to date, “suffice it to say we’ve got a lot more out there than that -- and this is all preproduction.”

What’s that worth to the typical consumer? “It’s going to be a little bit different, depending on what the end user is looking for,” he said. “The data geeks out there are going to want to drill down into their energy consumption data, and we’re going to provide access to that. Others are motivated by the convenience, comfort and control aspects -- that’s where most of the smart home world is.”

Right now, Aquanta’s pitch is aimed squarely at the end user, he noted. At the same time, “our biggest opportunity, and the way we see most devices being put into the market, is as part of a utility efficiency or load control program. That’s the party that has a benefit to incentivize or promote technology like this.” 

That’s backed up by a recent report from the Natural Resources Defense Council and the National Rural Electric Cooperative Association, which found a range of values for grid-responsive electric water heaters that can range from $50 per year in simple applications, to hundreds of dollars per year for more lucrative and demanding grid-balancing tasks. 

Aquanta has been working with about a dozen utilities over the past year and a half, putting the capabilities of its sensors and analytics to the test for these uses, he said. The first of these partnerships is with the industry research group the Gas Technology Institute and Minnesota’s Center for Energy and Environment, and it's just now closing out its first round of recruiting homeowners to participate. Other partners include Vermont utility Green Mountain Power and consultancy ICF International, he said.

At the same time, utilities and the companies that run efficiency and energy services programs are always looking for consumer technologies that they can piggyback on, he said. “They’re looking at this value proposition of customer engagements, energy efficiency, and demand-side management, as a whole. Those three pieces have historically been separate, but now you have these technologies that bring them all together.”