Startup iControl, which specializes in home automation and energy management tools, has raised $50 million from Intel Capital, Kleiner Perkins, Comcast Ventures, Rogers Communication and others to bring the total raised to date to over $100 million.
The question now is how and when consumers get excited about it.
Home networking is shaping up to be one of the most promising, and most challenging, markets in green technology. Homes consume approximately 20 percent of all of the energy in the U.S. and a good portion of that power is now consumed inefficiently. Lights get left on, heaters warm homes when the family is on vacation, etc. Unfortunately, home energy management systems can cost a few hundred dollars to install and can take a few years to pay themselves off. Few consumers will spend $300 on something that cuts their bills by $60 a year.
To top it off, the need for networking will likely decline with the proliferation of efficient appliances, programmable thermostats, behavioral programs like those from OPower that don't require hardware and LED bulbs.
As a result, the cost of HAN technologies may ultimately have to be borne by utilities, demand response companies like Comverge or telecommunications carriers that see this as a way to sell additional services on top of existing hardware in the home like DSL boxes. Subsidies make sense: utilities are the largest beneficiaries of HAN systems because HAN can curb peak power. The bright side for iControl, of course, is that the list of new investors includes Cisco, Rogers and Comcast, three giants in home technology. (Side note: in early 2009, we predicted Comcast would get into home energy management. Not many believed it.)
If iControl can latch onto its strategic partners, it will have a tremendous chance to cut the cost of HAN implementation as well as to inherit a well-established sales channel. The fact that iControl also combines HAN functionality with security services helps to defray the costs too.
Competitors, of course, have also been lining up relationships. Tendril has pulled in investments from both General Electric AND Siemens, two enemies in the wild, and will begin large-scale HAN rollouts later this year, a first in the world.
EcoFactor, which operates a HAN service over broadband pipes like iControl, has been showing pretty good results with tests with Oncor and expects to announce another partnership soon.
Stealthy Nest Labs, meanwhile, is expected to unfurl its system and VC support. Nest was founded by people that worked on the iPhone, so they know something about convincing the masses to buy high-priced hardware.