Tapping into the Next Wave of Start-Ups: The Software Side of Energy Efficiency

EDF Climate Corps fellow | June 23, 2010

By Megan Rast, 2010 EDF Climate Corps fellow at eBay Inc., MBA candidate at Haas School of Business, University of California, Berkeley, Member of Net Impact

While working at eBay Inc. as an EDF Climate Corps fellow, I have taken up the challenge to make the business case for energy efficiency and carbon reduction initiatives within the internet company.  Hence, the reason I was so keen on attending an event last week called "The Software Side of Energy Efficiency," hosted by MIT/Stanford Venture Lab.

Only in Silicon Valley, can one guarantee that such an event will draw a packed auditorium – a perfect storm of venture capitalists, cleantech enthusiasts, entrepreneurs and software engineers that work and live in one of the greenest energy states in the U.S.  It was a formidable crowd not to be underestimated.

But underestimate, we did.  The panelists were surprised when a quick poll of which audience members had checked their energy usage in the past 6 months yielded 10 times the usual number.

Why?

"Energy efficiency is boring," said Daniel Yates, CEO and Founder of OPOWER, a leading company in the space.  On that principle, the panelists found a theme – we have neglected energy efficiency. This frustrating theme resonated throughout as we discussed:

  • The tendency for politicians to push away from energy efficiency
  • The difficulty of behavior change
  • The relatively small number of state energy commissions with utility goals on energy efficiency
  • The fact that other countries have a higher "energy sensitivity" than we do in the U.S.

Eager to break the avoidance cycle seen in the areas discussed above, a new theme surfaced – Innovation.

Start-ups like OPOWER and EcoFactor have been innovating ways to work around the lack of consumer attention to the energy bill – or the "mean time to kitchen drawer" as John Steinberg, CEO and Co-Founder of EcoFactor, calls it.  Although the venture capitalist on the panel coyly shied from disclosing his firm's investments to an audience with Twitter at the ready, he did estimate that investments in energy efficiency are the next wave (think: Internet boom) and encouraged audience members to work on their start-ups now.

The big players are already on the field.  Cisco Systems, represented on the panel by David Hsieh, VP of Marketing in Emerging Technologies, is already invested in energy efficiency solutions for smart grid, commercial buildings, home and IT. Politically, the Obama administration has made a cornerstone initiative toward a clean energy economy.  Plus, with the appalling BP oil disaster gushing more oil than can be estimated, reducing our energy demand has never looked better.

Unlike other investments towards a clean energy economy, energy efficiency is ready for mass commercialization as the least expensive and the most readily scalable solution, according to an expert report released by the United Nations Foundation.

After attending the EDF Climate Corps training in San Francisco last month, I was already quite familiar with the opportunities of energy efficiency.  I attended last week's event expecting to gain a broader perspective of the space, but I could not have imagined the sheer energy (pardon my pun) circulating the event – the promise of energy efficiency was downright tangible.

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This content is cross-posted on Greenbiz.com.