REGEN Energy, a startup that’s turning thousands of dumb rooftop AC units into smart, networked building and grid-responsive energy assets, has raised a $7 million Series B venture investment to push its technology into more markets -- and to start bringing more devices under its “swarm logic” control.

"Swarm logic" is the term the Toronto-based startup uses for its networked sensor and control devices, which integrate with rooftop air conditioners to manage their duty cycles (how often they turn on and off to reach the temperatures set by thermostats inside buildings). By learning each unit’s typical on-off schedule, then fine-tuning their coordinated operation during times of peak energy demand, REGEN can get them to avoid running all at once and pushing the building’s energy usage to costly levels.  

“These are the worst set of stranded energy assets,” Tim Angus, REGEN president and CEO, said of rooftop AC units. Even sophisticated building automation systems don’t have insight into each unit’s energy usage characteristics, or how the “fleet” of rooftop units interact as a whole. In the meantime, about two-thirds of small to medium-sized commercial buildings have no automation systems, but instead have thermostats, which generally interact with their rooftop AC units by turning all of them on and off en masse.

REGEN’s system, by contrast, measures each unit’s energy consumption, duty cycle and other characteristics in relation to overall building temperatures and energy profiles, then uses “adaptive duty cycle” algorithms to get them to shift on-off cycles to minimize peak energy consumption, Angus told me last week at the DistribuTECH conference in San Antonio, Texas. That can drive a 30 percent to 40 percent peak AC load reduction without affecting comfort inside buildings, compared to simply moving thermostat temperature settings up and down, he said.  

REGEN’s node devices, networked via ZigBee mesh on rooftops and communicating via cellular networks to the company’s cloud computing management platform, were first tested in 2007 by utility Toronto Hydro (PDF) to manage peak loads at customer sites. They’re also being deployed in Southern California Edison's automated demand response program, where about 7,000 rooftop units make up roughly half the utility’s fast-reacting load reduction portfolio, Angus said.

REGEN’s technology, which is compliant with OpenADR 2.0b, the latest version of the emerging standard for automated demand response, is also being used by North American demand response aggregators EnerNOC, Comverge, Energy Curtailment Specialists (now owned by NRG Energy), and Constellation Energy’s VirtuWatt platform, he said. Last year’s partnership with big AC vendor Carrier has brought REGEN’s technology to commercial customers under the Carrier Energy Demand System brand name.

Tuesdays $7 million initial close, led by an unnamed “international energy company” and including previous investors BDC Venture Capital and NGEN Partners, brings REGEN’s total funds raised to about $15 million, he said. The company plans to use the money to expand marketing, sales and support in North America and internationally, and to develop new features and capabilities for the technology, including using the data collected from networked AC units for preventative maintenance, he said.

REGEN's system can also work for “any discretionary loads,” he noted, including electric vehicle chargers, water pumps, commercial lighting systems and other systems that tend to lack intelligent monitoring and control today. On the features side, REGEN is working on new algorithms that could put networked ACs to use for frequency regulation services, or to balance out rooftop solar PV systems' intermittency, he said.

REGEN is far from the only startup trying to network and manage the world of disconnected, energy-unaware building systems. HVAC systems are a focus of startups like BuildingIQ and building systems giants like Honeywell, Johnson Controls, Eaton, Siemens, Schneider Electric and the like, although they focus on building systems as a venue for energy control. Smart lighting is a world unto itself, with startups like Enlighted, Digital Lumens, Daintree Networks and others looking to network other systems within buildings. Small and mid-sized commercial buildings also have their particular needs, which startups such as EnTouch, SCL Elements, Powerhouse Dynamics and others are striving to meet.