By Andrew Nusca
Posting in Architecture
Smart meters are rolling out across the United States, but consumers aren't yet seeing the benefits. Why? GreenWave Reality CEO Greg Memo explains.
If the hype of utility companies is to believed, the smart meter will not only tell you your energy consumption, but remove your electricity bill altogether, green your house in one motion and cure cancer -- all while efficiently doing your laundry.
The reality is far less rosy. The smart meter will indeed make it possible for the consumer to save on their energy bill, but it won't help do that by itself. In fact, all a smart meter immediately does is helps utility companies get better readings on your electricity use -- not the other way around.
But new companies are starting to bridge that smart meter gap -- the curious space between utilities saving energy and money and consumers doing the same.
GreenWave Reality is one of them. (So is Cisco, Microsoft, Google and Intel. -Ed.) The Irvine, Calif.-based company is making its name in the home energy management market by partnering with utility companies and government agencies to help them deliver on the promise to consumers of a lower energy bill.
I spoke with CEO Greg Memo last month to discuss why consumers aren't pleased with the nationwide smart meter rollout and why there's a business case for utilities to help their customers lower their energy bills.
SmartPlanet: GreenWave sells gateways, power strips, displays and LED light bulbs. What's your sales pitch?
GM: We've created a whole platform, and that's the important point here.
One of the big differences is that we said, "We have got to be affordable." The gateway plus the display is about $200 for utilities.
The EU has effectively banned incandescent [light bulbs] as of 2009. We're seeing the rest of the trend spreading. And CFLs have a number of issues -- most importantly, my wife hates them. In the closet, you don't want a 30 second start-up time. So we've created an intelligent light.
SmartPlanet: These are all products that take advantage of a smart meter. But presuming that a utility company has already installed the meter and are seeing gains from it, what's the business justification that they should go the extra mile and improve a customer's experience?
GM: Just look to the deregulation of utilities. The largest power supplier in the U.K. had 20 percent churn in customers last year. You have to start building loyalty with your customer base. Consumers worldwide don't have a relationship -- and really don't like -- their utility companies.
You can do a lot of cool things with automation in the home. I've been selling products through retail for about 25 years. I understand retail. We really believe the way to get this product out on a large scale is working with utilities: "Powered by GreenWave."
How do you humanize energy? A lot of what we're doing is about smart controls -- an energy coach that gives you recommendations on how to save. Or smart controls, such as a "Smart Switch" where you can turn off the TV, cable box and DVD player but not the DVR, all digitally. Or remotely turn off lights from an iPhone or a display or a web portal.
SmartPlanet: There's no denying the 'cool' factor of home automation. If I'm a consumer, I'm asking: "Well, what do I need?"
GM: You need a gateway that's plugged into your router or service provider modem. You plug in the lights and TV and everything into one of our intelligent strips and that's it. Every port is individually controllable on the strip.
The initial go-to-market is working with utility companies. We are not selling this through retail as of right now. As smart meters roll out, utilities have a need to provide these tools to the end user. Smart meters do not really provide anything to the consumer -- they're really for the utility.
Smart meters provide the capability to be able to do the types of things we are enabling. But the technology and the solution hasn't really come to the marketplace. You put an engine in the car, but you don't put the wheels on it. That's kind of what the smart meter has done. It's a pretty simple device. It actually has a lot of limitations.
We've got to get the U.S. to adopt these technologies. The U.S. is behind.
SmartPlanet: Do you think utilities are overselling the smart meter as an energy bill panacea?
GM: In Europe, there are government mandates that you have to have smart meters -- Sweden, Finland, across the EU, very aggressive -- and they've been deregulated from an energy perspective where people have choice. So they're feeling the pain. They've deployed smart meters and consumers are saying, "What have these done for me?"
Globally, energy continues to go up. If you're not providing tools like this, consumers will switch to a utility that's cheaper, or offers more features.
How will they deploy this? Is this a cost to them? Lots of different models have been experimented with. The consumer pays a very small lease fee, for example.
In the U.S., we're working with the DOE [Dept. of Energy] and at the state level to accelerate the need for this. Only in the Northeast do you have the carbon rating, where there's actual value to have carbon reduction. You're starting to see some trends.
How can we offer the value proposition in the U.S. where you don't have the utility deregulation and the government mandates?
There are some proactive utilities that want to offer these things to the consumer. There are others that need government pressure. The U.S. is years behind what we're seeing in Europe.
It really is more about getting a cap and trade environment in the U.S. There really is a pain point for utilities like PG&E who are rolling out smart meters. If you roll out smart meters and you don't think about the consumer, you do not have a successful rollout.
The current administration is working very aggressively to put more of these things in place, but it's going to take some time. Some people have more pain points than others. You end up being more regional in the way you attack the U.S. You target progressive areas like California and Texas.
As an American, I'm as frustrated as you are about this. What we're doing makes sense -- if you can go in and stop people wasting electricity, which reduces demand -- no one argues that it doesn't make sense. It's the right thing to do from an environmental perspective and an economic perspective. It's almost more frustrating when you have the right [political] environment. How can we push this agenda forward?
SmartPlanet: Let's come back to the consumer. How do you appeal to them?
GM: When you tell them about [smart-meter based home automation products], they really say, "Man, I want this."
Since 2006, the cost of electricity has gone up 36 percent. A much higher portion of the average consumer's budget is going to electricity. The smart meters bubble up that frustration, and that's why you see the [PG&E] class-action lawsuit.
Consumers want this. I think they're frustrated, but they just don't know these things exist.
SmartPlanet: It's an easier sell on the coasts. But what about your Average Joe in Nebraska, saying, "With a smart meter, nothing's changed. Why should I care?"
GM: As a startup company, we can't affect the Joe in Nebraska. We've got to go to the markets that actually don't have that same argument. We do believe that utility companies want consumers to like them. They know they have to move to smart meters. The worst thing for them is if they get horrible PR when they roll them out. Everyone's going to blame it on the smart meter.
[If that happens,] every smart meter rollout is going to be the same outcome: consumers are not satisfied.
We don't do smart meters. We're adding intelligence in the home and allow you to see what the smart meter is telling you, your home energy profile. We'll allow you initially to monitor and control the energy use in your home. A smart control is where you turn off your TV and it shuts off everything in your home entertainment center. You can automatically schedule things like your electric car so it's not charging at peak times. It's creating way more intelligence than a smart meter can provide.
What we're really creating is an intelligent network: sensors and monitors. In elderly care, we can actually communicate with our gateway through the cloud -- monitor the movement of an elderly person. You can actually set an alert up to send someone out to check them. What we've created in your home is a network that initially is connected to energy
A smart control is "a half step away" from home security. When your kid is home from school, you can automatically unlock the front door. We have those locks already, they're in hotels. And you can sync with the phone and the car.
The reason why we formed this company and left very good jobs is because we believe the time is now to see this technology at the right capability and price point and experience to create an architecture and a platform that can truly enable these types of services. A smart control is really home automation applied to energy.
Everything in your life is becoming smarter -- your car, your phone -- but your house is still stupid. Our goal is to make your home smarter. And the first thing we do is make your smart meter smarter.
Aug 23, 2010
I hear what the CEOs are saying: Deregulated energy. People don't like their utility company. Working very agressively... We've got to get... We've created a whole platform here. When you tell them about... Consumers want this, but are frustrated. Utilities want customers to like them. The CEO should read his words. The problem is ownership. The utility companies are owners. And the owners are asking consumers for a 'partnership,' which is ridiculous on its face. -Consumers do not want to give up free choice and independence, but they would do it if everybody was going to pull together, except we are in the era where everybody is supposed to gnaw the other guy's leg for a profit. -Consumers don't like buying a foreign-made smart meter from the same companies that pronounce loudly 'we consumers are the reason our jobs have disappeared overseas.' -Consumers know that utility company websites know exactly who they are, and they do not want to get information or share information in that way. -Consumers know that power to rich people will never be cut, and that hardships will fall more heavily on the working guy. -Consumers know they are buying a gift for utility company investors by agreeing to peak pricing while local meter reader jobs are lost. -Consumers know that profits from the smart meter will not go into increased production, but instead will line the pockets of investors. -Mr CEO, you can't answer these questions, which is why your plan will fail all day every day.
Here is a side note: my oxygen concentrator doubled my electric bill. Not even summer A/C does that. Can't imagine what Home Diaylsis would cost. And yes, the guy who showed up from the electric company to help me get my bill under control was driving a Hummer. LOL
Oh-you mean like all the pressure I keep getting from my utility to let them control my electric for me so they can reduce my air conditioning during the day when I'm not home? Only I bloody well don't have any air conditioning to start with! In the summer, we sweat, drink lots of ice water, sit in front of a fan and when it gets really hot, go to a nice air conditioned movie somewhere. We use the CFLs (and I did see a drop in our electric bill). I unplugged my 30yr old inefficient freezer and pitched many of my mostly useless electric gadgets. We recycle our gray water, wear our clothes and shoes until they are pretty ragged, compost, recycle and buy used goods whenever we can. I get really tired of hearing people tell me how I have to reduce my consumption and am especially wary of control from outside. I mean, last winter we kept the house at a cozy 62 degrees. I surely do not need the government or my oil company telling me my allotment of fuel oil will be cut 10% this winter because it will save me money! Nor do I need the power company using a smart meter to decide I don't need enough electricity to run my refrigerator! If the controls were smart enough to realize I don't own air conditioning, maybe I would be more interested! PS--a big part of the problem is that it seems to be mostly well-dressed people who have nice cars, big houses, new furniture, and plenty of air conditioning who are telling me not to be such a big consumer!