, the high-end home energy monitoring startup that’s refocused on helping small commercial buildings manage their electricity, has just raised a long-awaited $3 million Series A round. If homeowners aren’t willing to pay money or attention to energy efficiency, maybe chain store owners will be.
That seems to be the rationale behind the Newton, Mass.-based company’s shift from the crowded, yet virtually nonexistent market for home energy management to a commercial market that, while as yet untapped, may have more incentive and wherewithal to spend money on energy-saving technology.
The $3 million round from SOSventures has been a long time coming. Powerhouse raised a $500,000 seed round of funding in 2009, and said back then that it was looking for $2 million or so more to expand its presence in the residential energy management market. It raised a reported $1 million in a round led by CommonAngels in early 2010, and an additional $400,000 that summer. Added to the $3 million series A round reported Tuesday, that’s a tidy sum, but nothing compared to the tens of millions raised by home energy management competitors such as Tendril, EnergyHub and iControl, to name a few.
Powerhouse’s e-Monitor system, on sale since 2010, is definitely a higher-end product for the home market. CEO Martin Flusberg told me last year that it included sensors on every circuit in the home, giving it insight into all the major household power loads and whether they’re drawing power normally or wasting it in one way or another. The system includes analytics software and the ability to display energy usage, set and send energy alerts and even control some power loads via Web interface or smartphone, and can reduce power usage by 20 percent or so, the company claims.
All that fine-grained sensor and control capability doesn’t come cheap, however. Flusberg set the price of a typical system at $499 and up, on top of a two-year subscription fee of $189. That’s much more than most studies indicate homeowners are willing to pay for technology that helps them track and save energy at home. Indeed, it's not clear that most homeowners are willing to pay anything at all, or even avail themselves of free energy management tools, as highlighted by Google and Microsoft's decisions to pull their free home energy Web portal projects earlier this year.
The small commercial sector, on the other hand, has people who actually pay utility bills for their job, and who would like to lower those bills to invest the savings in money-making propositions. In July, Powerhouse released its eMonitor c-Series, built for commercial sites like restaurants and convenience stores. Tuesday’s $3 million round is aimed specifically at expanding the company’s presence in that market -- specifically, the 4 million buildings or so under 20,000 square feet that Powerhouse is targeting.
A typical chain store doesn’t have much more complexity than a single-family home when it comes to its major power loads, though presumably your home doesn't have a bank of deep-fat fryers working from 6 a.m. to 10 p.m. every day. But like homes, chain stores are often neglected when it comes to fine-tuned energy management, if for different reasons. Store managers aren’t energy experts, and can’t be expected to be adjusting thermostats and lighting controls all day.
That’s led a number of startups to focus on the small commercial space, either as an adjunct to home energy or as a stand-alone line of business. San Diego, Calif.-based Advanced Telemetry provides HVAC controls for fast food chains including some McDonalds restaurants, as well as home energy management in partnership with General Electric. Austin,Texas-based Incenergy provides energy management software to both utility-sponsored residential deployments and to commercial customers, with a key target being the 35,000 to 75,000 square foot range of buildings.
Larger buildings, such as grocery stores, are the targets of companies like Verisae and EnerNOC. New York-based startup ThinkEco and Palo Alto, Calif.-based startup People Power are trying to shrink the concept down to the individual office building tenant level with platforms to connect smart-plug devices and built-in office appliance energy sensors.
Indeed, a simple, easy-to-use platform that can set alerts, automatically cap excessive power use, make sure lights and other gear are turned off at night, tweak thermostats on peak power days without drawing complaints from customers about the heat, and other such functions could be a valuable energy saving tool. The main challenge is hitting the right balance between simplicity and real efficiency, and not sacrificing one for the other.