Houston’s Innowatts says it can help electric utilities find that perfect client.
The startup’s software is deployed through smart meters installed by utilities. Data analytics helps those utilities figure out which clients use how much energy and when, enabling them to tailor the energy efficiency programs they offer customers.
“We do predictive analysis on which customer is right for which kind of energy product,” says Siddhartha Sachdeva, Innowatts’ CEO and founder.
So far, Innowatts has about 3 million customers on its platform through utilities in Texas, California, and the Northeast U.S. Earlier this year, Innowatts raised $1.1 million from Take Solutions in New Jersey. Sachdeva, a veteran of NRG Reliant in Houston, says the two-year-old startup this month reached a milestone of being cash positive, and he expects to go to the market for another funding round in 2016.
In both deregulated and regulated energy markets in the U.S., utilities face an increasingly competitive environment, Sachdeva says. Though small, new players like solar providers can give customers more control over how to use energy most efficiently. Utilities must offer that sort of control, too, he added.
Companies like Innowatts and Arlington, TX-based Opower (NYSE: [[ticker:OPWR]]) are selling proprietary software that offers predictive and prescriptive analysis that allows utilities and end-user customers, depending on the market, to manage energy consumption in real time and monitor how external factors like weather impact energy needs.
“This is transforming a commodity-based industry to more of a customer service-based industry,” he says. “If you want to innovate in the industry, you need customers to be engaged.”
Right now, consumers don’t feel like they have much control on their electricity costs. They get a bill each month, which tracks consumption after the fact. But Sachdeva says Innowatts can help utilities analyze these consumption patterns so they can then offer customers energy efficiency programs that best match their usage. For example, NRG Reliant in the Houston area has plans that offer the security of a fixed rate or plans that are tied to the drop in natural gas prices or to wind-generated electricity in generated in Texas.
“In Houston, we have different retail energy providers,” he says. “They all have different rates, but those rates are primarily based on how they are hedging supply, not your consumption patterns.”
Sachdeva says utilities can “unlock” this information customer by customer by using Innowatts.
Right now, it’s sort of hit-and-miss the way utilities can market these programs. With Innowatts’ data, utilities are able to better target those marketing dollars, Sachdeva says. Customers can get more personalized energy plans with more transparency on pricing, he adds.
I spoke to Sachdeva while he was on a trip to India, where he was scouting potential partners at utility companies there. Innowatts is planning to expand internationally and is targeting customers on the subcontinent, as well as in Singapore and Japan.
“The regulations are evolving,” he says “They are open to integrating new business models.”
