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Home Energy ManagementWhy Tendril may (finally) be positioned for growth
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Aug 23, 2012
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By Jesse Berst
For the past few years I've been negative on home energy management. Sales were slow. And hundreds of companies were fighting for a piece of that tiny pie.
(Yes, I said hundreds. Research firm Groom Energy has identified more than 300 companies in the energy management space.)
Today I'm going reverse my stand and predict that the sector is about to turn the corner, starting now, accelerating in 2013 and becoming widely known in 2014. Sales are rising (albeit gradually). And at least four companies are starting to separate themselves from the pack. Opower and Aclara in the data presentment subsector. And Tendril and Silver Spring Networks in data presentment + device control. (Use the Talk Back form at the bottom to nominate other contenders.)
In this article, I want to talk about Tendril and its prospects. As widely reported in the press, Tendril recently went through layoffs. Today it has 160 employees, with four offices in the U.S. and one in Australia.
Despite the layoffs, I think the company is positioned for a rebound. First, the sector is slowly ticking up. Pike Research says the category will grow at 38% per year to reach $2 billion by 2020. Groom Energy is even more optimistic. It says the energy management software category (which includes commercial and industrial as well) is already a $5.2 billion industry in North America alone and is growing at 40% per year.
Second, the company is positioning itself to be a leader in the next phase, which -- as I'll explain below -- will be about automation.
Tendril's beginnings
Tendril began by creating a platform to connect wireless sensors, with an emphasis on the ZigBee protocol. Once that had been accomplished, the company started to look for problems that its solution could solve – that is, to look for sectors that would soon have many wireless sensors on the network.
Tendril dabbled in building automation and parking automation and home health before stumbling upon the nascent smart metering market. The company reoriented itself to sell to utilities because "when we started, there were very few ZigBee-enabled devices except for smart meters," explains Ivo Steklac, Chief Sales and Strategy Officer.
Tendril's first order of business was to solve the connectivity piece – to learn to talk back and forth with all the meters and other devices. Once that was accomplished, it started to look for additional value it could provide from that connectivity. And from all the data it was collecting.
That quest for added value led Tendril to purchase Grounded Power, a startup using behavioral science for customer engagement. It is that technology that forms the core of Tendril's current differentiation. (But I predict it will NOT be the heart of the next phase, as we'll discuss.)
Tendril's current differentiator
When I asked Ivo Steklac how Tendril differs from the competition, he made this claim: "We are the only company that does both consumer engagement and consumer enablement." Whether or not you agree that Tendril is unique in this regard, you should pay attention to the company's dual goals. Eventually, every utility needs to achieve both.
The first piece is engagement – getting consumers to pay attention to and to sign up for utility programs. Utilities have several tools here, including paper reports, online portals and social media.
Tendril wants to see its utility clients move to an online presence as soon as possible "because that is where you can best accomplish the second piece – enablement," says Steklac. Enablement means providing consumers tools that give them more control over their bills and their energy use. With the software provided by Tendril, for instance, utilities can give customers personalized energy-saving recommendations; or offer them new tools such as communicating thermostats; or sign them up to special programs. It is online that a utility can "recommend action and fulfill it at the same time," he explains. "The software lets you have a dialogue with customers, not just deliver a speech."
The power of variables
To make those customized recommendations, the Tendril software considers 600 to 700 energy variables, including but not limited to:
- Building envelope: age, size, number of levels, attic, basement, garage, aspect ratio, building orientation, age, internal mass, roof construction, roof reflectance, etc.
- HVAC: age, type, efficiency, zoning factor, cooling schedule, setback schedule, etc.
- Weather data: temperature, humidity, wind speed, insolation etc.
- Pool/hot tub: size, heated, heating fuel, solar cover, etc.
- Lighting: types, quantity, hours of operation, home/work schedules, etc.
- Occupancy: number of occupants, ages, home/work schedules, etc.
- Kitchen: appliances, electric/gas, load, efficiency, appliance schedules
- Laundry: washer, dryer (electric/gas), loads, efficiency, water consumption, etc.
- Electronics: number and type (TVs, cable boxes, DVDs, audio, PC's/laptops, tablets, cell phones, cable modems, gaming consoles, printers), schedules, etc.
- Water heater and use: age, fuel type, rated input (BTU/hr), water temp, delivery temp, energy factor efficiency, recovery efficiency, use hrs/gallons, etc.
- Solar electric: array tilt, azimuth, efficiency, temp coeff, inverter load curve, nominal power, etc.
The software can also use its behavioral model to make offers only to those customers most likely to sign up.
Page 2: What comes next, including challenges >>
| Burying the lede? |
| "The real action these days is in small- to mid-sized commercial." Great point here. |
| Jonathan Brill - 08/23/2012 - 08:51 |
| Irish company Climote gets traction with utilities |
| Irish company Climote Ltd are in trials with 6 of the top 10 Irish and UK utilities with their patented remote controlled multizone thermostat that uses the Mobile GSM network to communicate with its built in SIM. These 10 utilities have 28 million residential customers shared out between them between do to get trials with 6 of them says a lot about the technology and the direction these utilities are heading. This winter the company can confirm commercial roll out will start with at least 2 of the utilities. |
| Derek Roddy - 08/23/2012 - 13:52 |
| Customers + technology |
| This is a great summary of Tendril and what to look out for in the energy management space. Lots of good points. However, I take issue with the following: "I've long argued that relying on consumers to change behavior is at best a stopgap. It will be far better and far easier to train devices to be smart about energy than to train every customer." It's true that you can often get more bang for your buck with "smart" set it and forget it technologies. But there are 2 problems with this approach in my opinion: 1) Technologies don't function in a vacuum without people. If your only goal is to conserve/shave peak load, that's one thing, but if you're looking at the bigger picture, then at some point you have to approach customer education, motivation, and/or engagement. Companies like OPower and nonprofits like the SGCC would not be so productive if customer engagement was a negligible issue. 2) Hopefully OTS technologies have "smart' default settings- we know that people will either stick with the default or anchor their adjustment based on it, whether it be a smart thermostat or a service gateway /HAN controlling smart appliances in the home. However, customers need to be aware and motivated when they SET these devices- to achieve maximum energy savings/peak load reduction. If we cut people out of the picture, we're missing an opportunity here-- smart customers +smart technology = best results. I'm a psychologist working on a smart grid demo project. My $0.02. |
| Nicole S - 08/23/2012 - 18:43 |
| autoDR and autoEE on the cheap |
| $100M plus is wasteful use of capital. My small startup, FutureDash, is implementing an autoDR / autoEE solution on top of our EnergyBuddy home energy management solution for a utility HAN trial. It takes in to account customers' preferences and operates both with and without grid events: it responds to grid demand-response events, but also simply allows customers to keep their energy usage and cost within their personal preferences fully automatically once it has been setup. We've implemented the whole system, including the underlying basic energy monitoring system software and hardware, for less than 1% of the the capital that Tendril has raised. |
| Kevin Strong - 08/24/2012 - 01:11 |
| Consert \ Commercial Bldgs |
| Seems to me that Consert is making a pretty big push with their deployment in San Antonio. They are also using their relationship with Hometown Connections to be able to win more municipal utility business across the country. And they also received capital from GE as well as other big names (Verizon, Qualcomm)... sounds like a good portfolio strategy for GE. Tendril has done a better job of marketing than their competitors\peers (that's a compliment). The point on commercial building DR is salient. I'd like to see more price signaling from utilities to interface with commercial energy management systems using already established protocols. On the residential side, more of these companies are going to have to offer their devices at regular retailers and they will have to be interoperable with whatever DR signaling system the utility uses. Aren't all the companies using the same Load Control switch anyway? The Nest thermostat is retailing at $250. There are cheaper wifi enabled thermostats available too. |
| Sean Dempsey - 08/28/2012 - 22:49 |
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