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31 May 2019

Tendril and Resideo snap up smart home energy analytics firms

Tendril and Honeywell-offshoot Resideo have both acquired firms that will expand their smart-home oriented energy analytics offerings, in moves that are attempts to entice utilities looking to embrace demand-response (DR) capabilities for grid-balancing tasks. These are purchases that are going to take a while to pay off, but we’re already in the early stages of utilities gaining much more influence over the home than has been the case historically.

Put simply, if a company can gather enough DR homes under its control, it can begin pitching to grid operators and utilities as if it were a more conventional grid asset, like a storage battery or a solar array. Using DR, this company can increase or lower the demand for energy to help the grid out, for which it will be paid a fee. This payment is going to be required to help pay out to the homes, as most DR programs are essentially a voucher or rebate scheme that pays up when the home’s demand is adjusted – usually by lowering demand via control of appliances, or delaying a scheduled task for a more optimal time.

Once you factor in the increasing penetration of smart home technologies, these early-stage DR players can leverage greater ecosystems of connected devices and functions, which give each home a greater DR potential. EV charging, white goods scheduling, and HVAC control would let the DR firm act as a larger grid asset, enabling it to charge more for its services.

Of course, the utilities would like to have this capability in-house, but the process of building up their own smart home platforms will be resource-intensive and likely cost-prohibitive. Centrica’s Hive is the best-placed option in the energy industry, but in the smart home sector, Amazon and Google are going to be the kingmakers.

This is why we are so interested in their activity in this sector. Honeywell would like its Resideo to join the discussion as an alternative for Hive, and Tendril has some fairly advanced integrations with Google’s Assistant platform and also the Nest devices.

Tendril’s purchase of EnergySavvy comes only a few months after Tendril acquired EEme. These acquisitions followed a significant investment in Tendril from Rubicon Technology Partners, and it seems that the cash was intended to enable Tendril to take a lead in the US market – and potentially expand globally.

To this end, Tendril says it now serves five of the top ten US utilities, and that ten of its utility customers were already EnergySavvy customers. It now says it has about 45 utilities and public agencies using its energy efficiency, demand response, and customer engagement programs, under white-label contracts. Customers include Minnesota Energy Resources, National Grid, New Mexico Gas Company, and Seattle City Light.

Specifically, the EnergySavvy special sauce was its Next Best Actions tool, which would provide a personalized list of recommendations for homes that were interested in saving energy and reducing their bills. The technology backbone behind this capability is data science and some machine learning tools. The utilities that use the platform apparently find that there’s a 50% increase in the number of customers that switch to an offer or program, which should translate into better planning decisions.

Tendril is wary of the power of Oracle, which has been a rival since it acquired Opower in 2016, but’s EnergyHub subsidiary is another rival with considerable potential reach. EnergyHub signed a deal with Bridegly, a startup and Tendril rival, to provide EnergyHub with data analytics services for home energy devices.

And then of course there’s Whisker Labs, which has been acquired by Resideo – the spun-out Honeywell Homes assets that recently acquired Buoy Labs, a smart home system for tracking water usage and detecting leaks. It seems that Resideo is trying to flesh-out its home services offerings, and energy usage capabilities takes it straight into the Tendril realm.

Whisker Labs’ technology would create a model of a home, to analyze how to optimally use HVAC systems to reduce energy consumption while maintaining comfort levels. It would blend the model with local weather data and the data from a home’s connected thermostat, to determine the best heating and cooling cycles.

Speaking to CEPro, Resideo’s VP Scott Harkins said that this thermodynamic modelling technology was the main reason behind the acquisition. He added that it allows an integrator to offer homeowners a program that can automatically adjust their thermostat to save them money, similar to what certain utility companies do now for certain homeowners. In those demand response programs, homeowners allow the utility to remotely adjust the temperature in their home, so that the utility company can avoid brownouts and stresses on the grid.

Harkins expanded on this point, arguing that the integrators are very well placed to use Resideo’s products in this offering -“imagine an integrator going to his customer and saying, ‘If you pay me $5 per month, I will save you $150 per month in energy bills.”

Resideo is keen to pursue this opportunity. It points to its “presence in 150mn homes and unparalleled channel of 110,000 professional contractors,” as evidence of its being in “a prime position to deploy this technology at the next level, making our smart home products even smarter while saving homeowners money on their energy bills.”