The Three Reasons the New Facebook Energy App Might Not Fail

by ‐ Tags: current events, alternative energy

A few months ago, my colleague Nate wrote a blog article discussing the respective closings of Microsoft Hohm and Google Powermeter. Hohm and Powermeter each worked to provide home energy usage summaries and benchmarks, which allowed users to better understand and assess their energy habits and property efficiency.

Despite this red flag, Facebook, the National Resource Defense Council (NRDC) and Opower, have partnered and are forging ahead with a very similar program, a social energy application for Facebook, due for launch in early 2012.

Will this program be different enough to succeed where its predecessors failed?

I think so, and here’s why: 

Data Sharing

Presently, there is no defintive national legislation on who actually owns utility information. This grey legal area means utility companies are generally hesitant to share cost and usage histories with third parties for fear of being sued. Google and Mircrosoft each dealt with this issue differently; Powermeter sought specific partnerships with utility providers who employed smart meters and similar devices, and Hohm established more general partnerships with three west coast energy companies, and offered manual upload options for particpants outside this service area. Unfortunately, Powermeter’s data collection required that the client possess a smart meter (a factor limited by a home’s location and utility provider), and Hohm’s system required users outside of the partnership range to be invested enough to manually input data each month. Each was ultimately unable to collect the data necessary to deliver accurate and useful benchmarks to all interested particpants.

The new energy app will face similar challenges, but has the advantage of working off of Opower’s existing utiity partnerships, which have taken five years to develop but now include eight out of the US’s ten largest providers. Not all of Opower's 60 partner utilities have signed onto the app but those that have supply power to over four million, including all residents of Chicago. And according to the press release last week, other utilities are expected to sign on before the official launch.

describe the imageMarket Adoption

Even though Google and Microsoft have large customers bases that are eager to try new products, they are primarily word processing and e-mail management clients, so persuading customers to sign up for energy tracking – particularly when energy tracking is not commonplace – is an unexpected, and challenging jump. While Facebook is used for similar communications, its position in the social media realm is just different enough to make this leap where these other platforms couldn't. To be specific, Facebook has a tradition of games and competition and a heavily used app database. This existing framework, besides providing a model of how participants could share and compete with their data, also introduces an easy way to advertise and publisize the program. And again, the partnership with Opower will prove invaluable here, as this company brings on 10 million households who are already participating in some sort of energy benchmarking.

Powermeter and Hohm both launched in 2009, when green efforts and energy benchmarking were just starting to take off. Over the past three years, we’ve seen $30 million directed towards green jobs through the American Recovery and Reinvestment Act for 2009, and along with it, increased awareness of climate change and the importance of energy efficiency. This past year alone, during which Powermeter and Hohm decided to close, new commercial benchmarking ordinances in NYC, Seattle, D.C. and San Francisco, took effect, contributing to an even broader understanding of energy benchmarking. College and university students (Facebook's original user base) are also becoming more aware of energy use through dorm energy competitions, where students compete to reduce their dorm's energy footprint. There is now a precedent for sharing and competing with energy usage.

Perhaps more important than this general increase in energy use awareness, is actual legislation that may ease sharing of utility information. The Electric Consumer Right to Know Act is currently making its way through congress, and will serve to clarify that consumers own their utility data and are able to share it with any third party of their choosing. Though the new energy app cannot rely on this legislation to remove the barriers of data collection, it may be possible that it will help over the next few years. 

Google Powermeter, Microsoft Hohm and the new social energy app are all indicators of a hole in the energy efficiency field. Presently, the average homeowner spends about 6 minutes --annually -- considering their energy usage, despite the fact that building energy use accounts for 40% of total overall energy use in the United States, and makes up a substantial portion of household spending. Part of the reason for this is that consumers don't have the tools to understand their usage numbers, or a common standard to compare their energy footprint to. Providing these tools is essential to reducing residential energy usage; the average Opower customer uses 2 - 3% less electricity than their counterparts. By tapping into social media avenues, it may be possible to quickly bring the energy benchmarking that has these types of energy reduction results to scale in a big way.