The Energy Management Technology market has a compelling ROI, proven technology and concrete examples of cost savings that have made a significant difference in the bottom line for business users as well as consumers. So why hasn’t the market taken off as quickly as expected? Where are the opportunities? The MassTLC Energy cluster explored these questions on Thursday at Foley Hoag in Waltham, MA.Unlike other technology markets such as mobile, curiously there is not a lot of pull from consumers demanding new products. Energy management is not easily accessible as yet to the casual user and although the ROI is there, it is still a high ticket item for both commercial and residential users. But with big data and mobile apps on the horizon, this market may be on the verge of taking off.
The morning started with great excitement in our showcase of technologies from MicroDesk, Millennial Net, NSTAR, OutSmart Power Systems, PepperDash, Powerhouse Dynamics and Save Energy Systems. Attendees saw dashboards, software demos, hardware and talked to representatives from these companies about how their products and services are helping businesses manage energy consumption as a strategic asset — and save money in the process.
Moderator, Scott Clavenna, CEO, of Greentech Media then led an interactive panel session on the challenges facing energy management and the opportunities as we move into the age of big data. The panel included:
- Domenic Armano, Director, Strategy & Innovation, Energy Solutions, Johnson Controls
- Martin Flusberg, CEO, Powerhouse Dynamics
- Carlos Alonso-Niemeyer, Program Manager, Energy Efficiency Services, NSTAR
- Howard Nunes, CEO, PepperDash
The slow adoption is due in part to finding the right way to engage customers with the issues that they care about most, managing their energy costs. Except for the ‘wealthy geeks’, most people do not care about the technology’ what they care about are the business results that the technology offers. For the larger utilities like NSTAR, that engagement happens through the CFO or working with architects and engineers in the design stage to decrease costs. The primary driver for CFOs is energy costs, says Armano. For many of Powerhouse Dynamic’s smaller commercial customers there isn’t a full time Energy or Facility Manager. So finding the right person to demonstrate how energy management can critically impact the profitability of their grocery store or restaurant is important. User experience is also critical for this set of customers as well as the high-end residential customer. PepperDash is partnering with groups like RealComm to reach CIO’s and Facility Managers who are interested in managing energy as an asset with business intelligence and data analytics.
Adoption will happen once people are fully engaged – on their terms. This is true for any business interaction. Currently energy management is a nascent market and companies are focused on their technology. A shift is needed to focus more on the business results for the targeted market regardless of whether it is the person responsible for the HVAC system or a CIO.
Another issue is that VCs think of this space as ‘noisy’. Companies need to think about how to reverse this impression. The development of standards would help address this issue. According to Armano, standards are critical to success in this market, and would also make it easier for the buyer to buy. Buyers fear vendor ‘lock-in’, says Clavenna.
So how is Massachusetts doing compared to the rest of the country in adopting and investing in energy management? In 2011 Massachusetts was first in the nation for energy efficiency and had its highest investment in cleantech on record. Domenic Armano highlighted the great organizations here like the Cleantech Open. Massachusetts utilities like NSTAR offer incentives to support new technologies, http://www.nstar.com/business/energy_efficiency/electric_programs/ . Martin Flusberg spoke from the investor’s point of view and reminded the audience that Boston is a conservative investment market, but that he is seeing signs that VC’s are looking to make earlier investments in energy management companies.
With the onset of the cloud, big data and data analytics, there are ample opportunities for businesses to see patterns in the energy data and realize the potential for cost saving. Specifically, fast growing sectors like IT data centers that have intense cooling requirements and associated energy costs associated with them, can benefit from monitoring tools. There are also many opportunities in healthcare, though perhaps harder to realize given the regulatory environment.
Johnson Controls has recently announced the creation of an open-source platform able to integrate into building systems with third parties developing applications. According to Flusberg more executives with access to data are seeing energy costs as a controllable expense which provides motivation to invest in energy management systems. NSTAR has also started a pilot program for home energy management and mobile reporting, .
The true power of this data is yet to be realized. There will be challenges along the way, such as privacy and security issues, as well as questions regarding the ownership of the data and ultimately how the data can be used to the advantage of service providers and consumers in providing visibility to energy consumption and the ability to realize savings.
Links to participating companies:
Thank you to our Sponsors:
Autodesk & Foley Hoag