Remote minigrids are a tough market for a traditional smart meter vendor. The meters that minigrids use need to be cheap, rugged and reliable, and they must be able to adjust to the often unstable operating conditions of solar-powered standalone grids.
They also need to carry enough computing power to support a growing array of prepay and pay-as-you-go options and diagnostic capabilities, all without reliable internet connectivity or the typical back-office utility IT staff and technical support that come with a full-scale utility deployment.
SparkMeter, a Washington, D.C.-based startup, has made it its mission to provide a metering platform to meet these atypical operating conditions. From its start in 2012 as a spinout of a nonprofit group bringing power to Haitian towns and villages, the company has expanded to more than 22 countries and more than 100,000 meters sold. Its customers range from local solar installers and developers to venture-backed minigrid developers such as Husk Power and Powerhive and the minigrid arm of global energy giant Engie.
On Tuesday, SparkMeter closed a $12 million investment led by Clean Energy Ventures and Breakthrough Energy Ventures, joined by Alitheia Capital, Total Energy Ventures and other investors, bringing its total funding to date to $16 million. The funding will help SparkMeter grow its share of metering for the fast-growing off-grid energy market, which has exploded in the past half-decade or so with more than $1.7 billion invested as of the end of 2018, most of it in the prior two years, according to Wood Mackenzie.
The new round will help SparkMeter launch a new Digital Solutions business unit, aimed at providing grid data analytics for a new set of customers. The idea, said CEO and co-founder Dan Schnitzer, is to expand from serving the estimated 1 billion people who live without grid access to the roughly 1 billion more “who still suffer from low-level electricity access, despite having access to a grid — what you might call a 'weak' or a 'broken' grid.”
The World Bank’s International Finance Corp. estimated in a 2019 report that 840 million people worldwide are served by power grids so unreliable and intermittent that they need to use diesel generators as a daily backup. That’s an expensive and unhealthy alternative, driven by what Schnitzer called a “vicious cycle” of uncollected revenue, uninvested capital and continuing degradation of services.
“Metering and billing is a central factor in explaining why these grids are so weak,” he said. Many developing countries in Asia, Africa and South America suffer from a combination of poor service and what’s known in the utility industry as “nontechnical losses,” which includes customer energy theft and corrupt business practices on the part of utility personnel and government agencies. In some regions, these nontechnical losses can add up to nearly half of total electricity sales.
Losses of that magnitude make it hard for utilities to pay for the power they’re buying from generators or producing themselves, which undermines their ability to invest in new or more reliable generation and distribution infrastructure; this in turn leads to continued degradation in service.
Similar problems plague many minigrids, Schnitzer said. Well-meaning government and nonprofit efforts often founder on the lack of robust and reliable systems to meter and bill customers for the electricity being supplied, undermining their business case and leaving them without funds to maintain their systems.
A technology platform for underserved markets
Traditional smart meter systems from companies such as Itron and Landis+Gyr tend to be too expensive and complex to meet the needs of these markets, Schnitzer said. A typical utility advanced metering infrastructure (AMI) deployment costs around $250 per metered endpoint, and the “soft costs” of network and back-office support can boost that cost to between $500 and $800, he said.
SparkMeter’s solution, by contrast, costs about $35 per meter and uses a proprietary mesh networking technology to collect billing data in 15-minute intervals. Central data collection hubs can time-synchronize and store data for days or weeks at a time, ensuring that intermittent internet connectivity won’t prevent that data from being verifiable when it’s able to be uploaded to the cloud.
SparkMeter's system is designed to be stood up quickly and with a minimum of technical skill, and it supports a variety of meter-to-cash and prepayment systems, such as mobile pay, for people who can’t rely on regular monthly paychecks. The meters can shut off power to customers who exceed the minigrid’s maximum load and provide operators with circuit-level data to diagnose outages or shutoffs.
These capabilities serve as a starting point for SparkMeter’s new foray into analytics for grid-connected systems, Schnitzer said. “In addition to helping you improve your metering, billing, payment and collections process, we’ll also provide analytics that help you understand the asset health of your distribution network as a whole.”
Utilities with large-scale smart meter deployments have been pursuing this type of grid analysis as well, with different levels of success depending on how aggressively they’ve moved to integrate AMI data into their grid operations and planning regimes. Lower-cost, lighter-touch systems exist for smaller utilities with fewer IT resources to draw on.
So far, SparkMeter’s work with utilities consists of a handful of studies aimed at providing system visualization and congestion analysis, Schnitzer said. It’s planning a full-scale release later this year to automate these types of analyses for users of its platform.
SparkMeter doesn’t see a lot of competition in this market application from metering vendors targeting low-cost markets, such as Slovenia-based Iskraemeco or Chinese metering giants such as Wasion Group, Linyang Electronics, Ningbo Sanxing and Holley Metering. While these companies provide prepaid metering in a variety of flavors, they don’t yet offer more advanced data collection and analytics to these underserved markets, Schnitzer said.
“That’s where we’re pretty different from the other metering vendors,” he said. Prepayment alone “is a necessary, but insufficient, condition for these utilities to be viable.”