Californian startup Ohmconnect has developed an online tool that helps householders to get paid for cutting back on their electricity consumption during peak periods.
In the wake of a combination of US federal and state initiatives, plus the massive expansion in use of smart meters, home energy data in California has finally emerged as a vector for innovation. A startup such as Ohmconnect could not have existed a few years ago but the company has succeeded in building a website on which almost everyone in California can now enter their utility account details and make money by reducing their electricity consumption at peak periods. The tool which Ohmconnect has created can be used in tandem with Nest and Tesla Model S products and smart home automation products such as those from WeMo. The startup uses an economic ‘demand response model’, which has been looked into by a number of companies focusing on new ways of using technology to this end. However very few of them have found a way to involve consumers directly and make them responsible for their own energy consumption without the need to purchase additional smart devices for their homes. Ohmconnect’s basic idea is to enable any and every consumer to sell power back to the market. This is currently only possible in a few states, such as California and Texas, because to do so you need to work in tandem with local government initiatives such as the Green Button programme set up by the California Department of Energy.
Getting paid to consume less energy
The United States electricity grids are designed to produce just enough of the cleanest possible energy, which means that they have to switch to less efficient and less environmentally-friendly power generation plant during periods of peak demand. Ohmconnect monitors these peaks, informs users and encourages them to reduce their energy consumption at such moments so that they can sell the power they save back to the market and make money. Ohmconnect co-founder Curtis Tongue estimates that the platform can help consumers to make $100 to $130 a year, equivalent to around 5 - 10% of their annual electricity bill. The Ohmconnect dashboard enables consumers to track their consumption and the amounts they are paid, to compare their consumption with that of their neighbors, and to receive alerts when the electricity they are using becomes more expensive so that they can immediately switch off equipment and devices they do not really need to use. Payment is then made monthly on to the user’s PayPal or Venmo account. The startup employs an economic ‘demand response model’ to calculate when to cut back on usage, making adjustments in real-time however, instead of just a few times a year like some companies. At the moment Ohmconnect is focusing on the Californian market where, following new US legislation, 95% of all homes have installed smart meters, which you need in order to take advantage of the Ohmconnect system.
Competition to provide data services in the power sector
The system of paying householders to consume less electricity stems from US regulations which seek to encourage energy management by making it mandatory to compensate extra capacity creation at the same wholesale rate as power generation. More and more homes are now being equipped with connected devices, which provides Ohmconnect with an opportunity to extend its reach. In fact the company is planning to increase its device control capacity and has integrated its capabilities with connected equipment such as the Nest thermostat and Tesla cars, so that devices can be controlled remotely. Most companies working with the demand response model for home energy consumption use smart connected thermostats which work with companies seeking to optimize energy consumption, such as EcoFactor, EnergyHub, and Opower. So when Ohmconnect adds functionality to automatically control user equipment it will be competing with these players, who are already well-known to both consumers and suppliers. In fact Ohmconnect goes further than the demand response model, using energy data which could prove very useful for all kinds of energy management and sustainable development initiatives. The company is not the only one on the market however and some other firms sell their data collection services to the energy utilities. Data analytics firm Bidgely has for instance developed algorithms which can itemize home energy usage at the appliance level, and uses this data to sell consultancy services to power companies. Meanwhile Gridium offers enterprise solutions focusing on energy consumption data analysis and tracking, catering to the commercial and industrial sectors.