The company’s Home Energy Reports personalize utility bills and provide energy-efficiency tips for some 13 million American households, all customers of 70 utility companies throughout the country, including eight of the 10 largest in the U.S. The utility company includes Opower’s individualized household report in each month’s bill, where customers view data on how much energy they have used that month and that year, how they compare to their neighbors and what they can do to reduce energy consumption in the coming month. The data is based on Opower’s patent-pending “analytics engine,” according to the company website.
“The basic idea was to change the way utilities communicate with customers,” explains Alex Laskey, president and co-founder of Opower. “We take the utility bill, which is fairly opaque, impossible to understand and not terribly helpful, and give [the customer] a better idea of their energy consumption and help them with saving energy.”
Laskey, who previously ran political campaigns and specialized in healthcare and environmental policy, and co-founder Daniel Yates, friends from their alma mater Harvard University, started Opower in San Francisco in January 2007. The impetus: Yates’ life-changing nine-month trip traveling from Alaska to Patagonia the previous year. “He came back and was so devastated by the environmental degradation he saw and was committed to doing something about the environment,” Laskey says of his partner, who was unavailable to comment for this story. “He came to me and said, `Let’s do something together.’”
Laskey had become disillusioned with politics, which he had entered “to change the world,” he says wryly. He and Yates, who has a software background, determined that the physical world needed changing. One way to help was by reducing energy consumption, one customer at a time. "The attitudes on climate change were politicized,” Laskey explains, “but the idea of saving and not wasting energy, people were in universal agreement that that was a good idea.”
And save they have. In the next couple of weeks, Laskey says, Opower will have helped people collectively save 1 terawatt hour, the equivalent of enough energy to power a city of a quarter million people, such as Orlando, Fla. In the next year, they will save another terawatt, he says, and the company continues to expand its customer base.
Why do utility companies sign on with Opower? Being governmentally regulated monopolies, utilities in many states have financial incentives to achieve energy efficiency. Opower, through its customer empowerment model, helps reduce energy consumption, thereby earning the company a higher profit margin, says Laskey. Utility companies also recognize the importance of customer service, he adds.
“Forward-looking utilities executives believe customers have the right to know this information and understand how they can save.”
Opower itself is forward thinking, opening an office in London and partnering with Honeywell to create a Wi-Fi enabled thermostat that can be controlled through an iPhone or a laptop. As innovative as Opower’s work is, Laskey says, it takes many companies and individuals to truly change the world.
“Our company is not going to be a silver bullet solution for climate change. This is the biggest problem facing mankind,” he says. “The first step in getting people to save energy is making them engaged and informed. The second is providing them the tools to do so.”
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