Startup Spotlight: Arcadia Power Is Giving People Freedom to Buy Renewable Energy
In 2006, Whole Foods became the first major retailer to make the switch to 100-percent clean energy, putting the money where the mission was in terms of the company’s “Green Mission.” But what Kiran Bhatraju wanted to know was, why doesn’t everyone have the same freedom to choose the type of energy they buy?
Thanks to Arcadia Power, they can. Arcadia is the first country-wide clean energy provider that works in all 50 states, allowing customers anywhere in the U.S. to take charge and switch to clean energy. And Bhatraju, the startup’s cofounder, says his team is just getting started: Ultimately, he wants Arcadia to become the best known utility brand in the country.
1776 sat down with Bhatraju to learn more about his company and vision, offering a sneak peek at what’s in store for consumers as utilities get unbundled.
How did you end up in the energy industry?
I grew up up in coal country, in Kentucky, so I’ve always been interested in energy issues and how they relate to people. I worked on Capitol Hill on energy issues, and I learned a ton about the smart grid and emerging markets. This is my second energy startup.
How did you get the idea for Arcadia Power in particular?
The idea was based around two big things. First, you had huge companies like Google, Apple and Whole Foods buying clean power on the grid, and you hear these stories in the media all the time. They do some on-site generation and then they buy on the market. So first of all, my cofounder and I saw that happening.
The other factor is that utilities just provide terrible service to customers. Most people don’t know what a kilowatt hour is, but yet everyone pays a power bill every month, probably until they die.
We said, these two things—in and of themselves—kind of create a huge vacuum. People want access to clean power, but they might not be able to get access to solar panels for a variety of reasons. Maybe they live in an apartment, or even if they do own a home, maybe the roof is tilted the wrong way or there are trees overhead. So we asked, can we take the same buying practices that Google and Apple use and provide it to the average person who’s paying a power bill?
What makes Arcadia stand out? What’s your competitive advantage?
We’re a unique offering in 35 states in the U.S. We’re the only nationwide clean energy provider that’s also on a utility bill. Other companies only work in Texas or de-regulated states. Our innovation is that we’re able to work across virtually every electric utility in the U.S. We’re the only player in this space in California, Florida, Virginia, and we provide a better consumer experience. We put a lot of effort into helping customers understand how they compare to their neighbors and where they’re buying their clean power from. They get rewards and savings from our partners, so we make it a consumer Internet experience.
What impact does D.C. have?
It’s a great place to start a company—especially doing what we’re doing. Utilities are heavily regulated, and there’s a lot of nuance to what we do. Utilities are being unbundled from multiple angles. Companies like Solar City are taking the traditional power generation role away from monopoly utilities like Pepco. We wanted to unbundle the customer interactions and really own that part apart from utilities.
D.C. is full of really talented people who are interested in things that I think are double bottom line, like the fact that we sell clean power. There is inherent good in our product. It’s a great place to start a company in a regulated industry.
Many of your major projects so far have been in the Midwest and West Coast. What about the East Coast?
Well, that’s where the wind blows! A lot of what we buy right now is wind power. But we are going to diversify our energy set, and we’re going to be looking a lot more at solar next year. Where solar plays well is very different from where wind is most attractive. We’ll be doing a lot more in solar, but in the beginning we wanted to get projects where we’d be most productive.
What are some of Arcadia’s biggest successes so far?
We just crossed 10 million kWh, which is really exciting. That’s about the output from 8 industrial wind turbines—it has a significant impact on the energy market.
A few months ago, we got customers in all 50 states, which I think says a lot about the breadth of what we can do. It’s interesting to get feedback from customers who say, ‘I never had a choice; thanks for doing this,” and, ‘I’ve learned about my home energy use and what that means for my own bottom line.”
So are you finding that the biggest issue is that customers don’t understand ways to switch?
Only about 15 percent of Americans can ever really access rooftop solar, for various reasons. So for the mass market, the thing is, everyone already pays a power bill. We just give them the ability to choose clean energy every month. Whether they know it or not, what they’re buying is traditional fossil fuels every month.
What’s in store for the future of Arcadia?
We want to become the nation’s largest utility brand. We’re on our way there—customers in all 50 states—and we’re going to be doing a lot more with the small business market. We currently have small businesses across 30 states buying from us. We want to get into financing and community solar, and ultimately do all the things for customers that really provide value and empower them regarding home energy use. We’re going to roll out a lot more things around efficiency and renewable products.
Do you have any advice that you would offer to entrepreneurs or potential startup founders?
First, keep after it. Startups are hard. They get glamorized, but they’re tough and you just have to keep at it.Secondly, I’d say, anyone can build the next big, on-demand laundry app, but there are many big problems out there that need solving. You need more people who don’t have biases about how things were done in the past to come and tackle these issues.