Applying Technology to Energy Efficiency

Observers of the VC industry might have noticed that clean technology has been attracting ever larger amounts of financing. In the most recent quarter it received $843 MM, trailing only software and biotech. We're quite interested in the space at OATV as well. However, primary investments in fuels and generation don't meet our parameters for capital efficiency. As a result, we've been looking for what we've termed "second-order investments" -- particularly the application of software and networking to efficiency. This is an area which hasn't gotten much funding to date, but is just starting to get noticed by the press and a few VC's, such as Rob Day.

One area of particular interest to us as of late has been the management of home energy use. We've noticed a number of technology early adopters showing an interest in reducing their energy usage or even getting off the grid. These early adopters driven by the same concerns as people who offset their carbon emissions. However, with the advent of wide spread demand response systems such as PGE's Smart Meter, it appears that the financial incentives needed to drive wide-spread interest in home electricity management might finally be in place.

Simultaneously, it appears that the technology for enabling this might be emerging. In particular, we're fascinated by the combination of low-cost wireless sensors and widespread home broadband.. One can easily imagine an energy saving kit comprising of sensors to monitor the power usage of all major appliances , a WiFi gateway to connect these sensors to the internet, and a web application which aggregates the information. The web application could then provide energy saving tools such as trend analysis, comparisons to aggregate usage, and what-if modeling (for a bit of news from the future, check out the UK Design Council's work in this area).

We think that the potential for energy savings from concepts like this is tremendous. It is doubly attractive for the opportunity to create a lot of economic value while simultaneously achieving clear environmental benefits. If you've got an interest in this area, and particularly if you've got an entrepreneurial itch, we would love to hear from you.