Congratulations to Opower on its initial public offering today. Dan, Alex and the team there have done great work, especially helping utilities achieve energy efficiency compliance mandates. But as I sit back and think about the state of our industry, I can’t help but wonder…is this it? And if it isn’t, where do we go from here?
By no means am I trying to take anything away from Opower. The company’s behavioral analysis approach is compelling and their programs have helped utilities achieve energy reduction goals. We have seen our own share of success with similar efforts. We partner with Duke Energy to deliver paper reports to 1.2 million customers across five states. To date, we have sent out more than 14 million reports, making it the largest such program in the United States.
This is worthwhile work that is delivering results. But did Tendril and Opower really get into business to simply execute paper-based energy efficiency programs? Quite simply, no…at least we didn’t. So, what’s next?
Tendril’s Marie Bahl McKenna wrote last week about developments signaling a shift in the energy market. The sheer volume of these moves in such a short amount of time tells me the industry is quickly migrating from that of pure-play commodity providers to more of a services model. In other words, we are seeing a move beyond executing compliance-based programs to enabling the creation of mainstream personalized service organizations. These Energy Service Providers (ESPs) will be dedicated to generating new revenue streams and offerings by providing energy as a bundled service. Helping to drive this transformation is where the long-term growth in our industry lies.
So while I congratulate Opower on its IPO, I also have some advice for all the traditional and emerging energy providers out there. Start asking the hard questions of Tendril, Opower and any other company trying to sell you a “program”. Here is a couple to get you started:
- “What’s next after energy efficiency mandates?”
- “How will you help me survive and thrive with the influx of new players?”
- “How can I turn solar and storage from a threat to an opportunity?”
- “How can you improve my bottom line and drive new revenue streams?”
The answers to these should tell you everything you need to know about the partner you are considering.
Any questions you would add?
Adrian Tuck is the CEO of Tendril, a leading provider of energy services management (ESM) solutions. Its open, cloud-based software platform provides the infrastructure, analytics and understanding required to deliver personalized energy services.