cleantech
cleantech insights

The Ever Elusive Killer App for Energy Efficiency May Be Yoga Lessons

David Cheng

Earth Aid is what you get when you have an Internet mashup for energy efficiency.  Earth Aid, which just raised $4 million from investors, belongs to the new class of energy efficiency companies that focus on changing user behavior.  The company directly engages residential homeowners to lower their energy and water bills and rewards good behavior with discounts to local and national retailers (such as a free Yoga lesson).  In other words, it’s the Mint.com for energy use, pulls a yodlee.com on your utility bill, compares household performance a la OPOWER and then gives consumers Groupon-ish rewards when they redeem the points they have accumulated from their energy/water savings.  It’s almost as if your utility bill got a TechCrunch makeover.

Earth Aid is not just another OPOWER-like clone looking to eke out that 1-4% in energy savings for utilities.  In fact, it’s doing something bolder—it’s attempting to drive energy efficiency adoption through consumer pull.  From the moment “decoupling” was a tour de force by Art Rosenfeld (who’s getting honored at our upcoming San Francisco conference) and colleagues, energy efficiency has largely been led by policy or command and control business models.  Even OPOWER, which has demonstrated the ability to materially alter consumer energy consumption behavior, still works through utility channel partners.  Many of the home energy management hardware companies like Tendril also choose the utility channel.  While this approach allows for a broad and captive user base, the sales cycles are notoriously long and the old adage still holds true: you can lead a horse to water but you can’t make him turn up the thermostat during critical peak pricing.

End-customer-driven energy efficiency adoption is not new.  KPCB-backed RecycleBank has been working on a points-based rewards system for recycling and has accumulated more than $70 million in venture capital and a deep list of sponsors.  But what makes this new wave of energy-efficiency companies different from past attempts?

Some will say the social aspect of OPOWER is its killer app.  There’s a real psychological “keeping up with the Joneses” (or shame factor as my Tiger Mom would put it) that OPOWER taps with their household performance data.  Earth Aid also leverages comparison data to engage its users to accumulate more points.

Another differentiator is how easy it is to engage these programs.  An end user has to do very little to utilize Earth Aid’s resources.  It literally took me five minutes to opt into its service by seamlessly pulling my utility data into its dashboard.  This low adoption hurdle is the same reason why Scientific Conservation (previously covered here) has been so successful in converting commercial buildings into its customer base.  Without a hardware install, a significant segment of the existing building stock is already qualified for SCI’s autonomous commissioning.

Finally, it appears that energy savings alone may not be enough of a carrot for adoption.  For Earth Aid and RecycleBank, the siren’s call of discounted coffees could lure end users to lower their carbon footprint.  If you think this isn’t enticing, perhaps you didn’t see the massive Groupon raise a few weeks ago.  For commercial customers, enterprise software-as-a-service providers like Hara and ENXSuite pitch their services as a way to optimize business and strategic decisions based upon a holistic energy and resource analysis.  In either case, the “secondary” benefits of energy efficiency may be a bigger draw than the energy savings.

Finding a way to drive energy efficiency adoption through end user pull is a hard nut to crack.  In the case of companies like Earth Aid, they’re borrowing business models from a few of the most well known Internet start-ups to make it easy and fun for energy efficiency.  There may be no singular killer app for energy adoption but a few companies are taking some swings at it.  Now excuse me while I go replace my incandescent with an LED.  A few more points and I get to redeem a free Yoga lesson.

To get this and other Cleantech Insights stories delivered weekly to your inbox, sign up for the Inside Cleantech Newsletter:

 


You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or create a trackback from your own site.