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Energy & Sustainability

Weekly Trend: EnergySavvy Offers a Case Study in Utility Partnerships

Peter Lougee

Energy Columnist, 1776

For years, the need to find new energy efficiency measures has been apparent to utilities, as they faced growing demand on an increasingly aged infrastructure. Yet, this very infrastructure proved the biggest obstacle to true savings. Today, there are an increasing number of startups that offer software solutions to address this problem, but adoption by utilities has been slow.

Now, one company seems to have found a solution that actually has utilities interested.

Last summer, the Wall Street Journal reported on a startup called EnergySavvy, which was founded by a former Microsoft engineer in 2008. The company’s mission was to help “utilities run their energy-efficiency programs…with greater accountability and efficiency.”

The key idea behind EnergySavvy was to compete with traditional IT firms such as Oracle. Firms offer generalized solutions, but EnergySavvy figured it could appeal to utility providers by providing a focused product specifically for the utility industry. That way, there would be no need for expensive customization. It took six years, but by the summer of 2014 their plan was working. EnergySavvy raised $7 million in a round of funding led by Prelude Ventures and Pivotal. The successful investment was credited to EnergySavvy’s cloud-based platform, which was seen as an enterprise-level solution, providing energy-efficiency support for “all utility customers, and not just those in certain sectors.”

The investment seems to be paying off, as Greentech Media writes that EnergySavvy “continues to ink energy efficiency deals with large utility clients.” Specifically, EnergySavvy has signed a deal with Salt River Project, Public Service of New Mexico and the New Mexico Gas Company. The software offered by EnergySavvy to these utilities goes beyond the standard demand-side management utilities offered by its competitors. It focuses on “the entire project management” of energy efficiency programs by going beyond customer engagement.

EnergySavvy calls this next step “energy efficiency quantification,” and offers it to its utility partners by leveraging their software to provide “instant feedback” on how a particular program is being implemented. For example, an algorithm can determine that air sealing in private homes should yield significant energy savings—but what if the years-long trial of that program doesn’t produce the expected savings? The program would have been a waste. With EnergySavvy’s software, the utility company could receive very specific, tactical feedback, as the pilot programs were still ongoing, allowing them time to change their efficiency programs. If successful, EnergySavvy’s software could save utility companies “hundreds of millions of dollars annually” on the monitoring and adjustment of their demand-side management programs.

EnergySavvy’s success in partnering with major utilities lies with its focus on the entire cycle of energy efficiency—from the utility, to the consumer, and back to the utility. If other startups seek to compete in the increasingly crowded energy efficiency space, they would be wise to find improvements in the whole demand-side management cycle.

Peter Lougee

Energy Columnist, 1776

Peter is a Washington, D.C.-based freelance writer with a Master's Degree in Public Policy from American University. In addition to startups, Peter likes coffee, books and whiskey.