Comverge has always been known as a company that had some specialization in the residential demand response market. With more than half of its business coming from homes -- not businesses -- one of the largest players in the sector is announcing new products at DistribuTECH in San Diego on Tuesday to help solidify its role as the load control choice for going into houses.
Comverge announced two IntelliTEMP DirectLink products, a smart thermostat and digital control unit, both of which leverage a customer’s existing cellular or broadband connection. By using what’s already going into the home, the company avoids the roadblock of needing an additional gateway.
Less stuff obviously means less cost. Comverge hopes the IP-based offering has wide appeal, but the company is particularly focused on the municipal and cooperative market, which often cannot justify the huge upfront costs of bringing 21st-century load control into tens of millions or even hundreds of millions of homes.
“For starters, if you’re never going to have AMI, you now have the capability to implement technology that has two-way control,” said R. Blake Young, CEO and President of Comverge. “If you do have AMI, you can further engage the customer.” The cost savings vary by deployment, but Young said it can be as much as 50 percent cheaper than other demand response programs that rely on a gateway and device that needs another communication network, such as ZigBee.
The announcement comes after a tumultuous year for Comverge in 2012. The company was sold to H.I.G. Capital for $49 million in March, which solved its debt financing and cash shortages for the time being. At the time of the sale, Comverge announced it expected to be cash-flow-positive by the end of 2013.
To get there, Comverge will have to outmaneuver other demand response heavyweights, especially EnerNOC. The focus on residential demand response could pay off, as most other firms focus on the commercial and industrial sector, but only if utilities play along.
For a long time, utilities have loathed the idea of reaching far into the home, even though many have had crude one-way load control programs for decades. To make the transition easier, Comverge also launched its SmartConsumer customer engagement solution on Tuesday.
Utilities already have endless choices when it comes to customer engagement, with players such as Opower, Aclara, EnergyHub and Tendril, to name a few. And while many of those companies can do demand response on their platforms, Comverge argues that it is the only company that has DR at the heart of its mission with its consumer offering.
“The last three wins were all about having an integrated customer engagement approach,” Young said of the company’s recent contracts, including Progress Energy.
“Demand-side management challenges are complex and utilities are increasingly looking for a fully integrated demand response and customer engagement solution,” added Young.
The platform is not just a web portal that provides education -- it also picks up many of the other areas for self-service, such as bill pay, moving and answering questions during load-control events. The system is integrated with Comverge’s IntelliSOURCE platform, which also includes SmartPrice, its dynamic pricing platform.
"Dynamic pricing" still seems to be a phrase to avoid when it comes to a utility's rate plans for homeowners, but the idea of critical peak rebates (more carrot, less stick) has been gaining ground. In Pepco’s territory, Comverge will reach into 300,000 homes as part of the utility’s Energy Wise Rewards Program. Eventually, many utilities hope to shift from peak rebate programs to offering dynamic pricing to customers once they’re comfortable with the idea of varying rates.
Comverge sees the portal and IP-based devices as an evolution to a more elegant solution to deliver verifiable load control. “The heavy lifting is in the demand response management system,” said Young. Ideas like “putting the portal at the market -- those are interesting, but utilities aren’t using those to assure load drop.”
Others may argue differently, and Comverge is not likely to be the only company with new offerings in this space at DistribuTECH 2013.