Generating power for your residence is no longer for the paranoid or the peculiar; more than 2,000 of California’s heavy domestic energy users have signed up with Gen110 to meet most of their own power needs, and investors are sinking more money into the business as its burgeoning potential becomes apparent.
Gen110 CEO and co-founder Jason Brown isn’t your usual “energy guy.” He is a relatively recent graduate of business school with a background in sales, not power engineering, and his membership as part of Silicon Valley’s technorati has been confirmed this week with the announcement of funding by the tech startup’s venture capitalist of choice: Kleiner Perkins Caufield & Byers.
But then Gen110 is as far from an asset-heavy, vertically integrated traditional utility as it is possible to get and still be in the same sector. The firm has a high-touch approach to customer service, and has built a pipeline of customers in various stages of “acceptance” that could benefit from distributed generation on their own property, but is relying on partnerships with specialists to handle sourcing of materials, installation and maintenance.
Solar power on rooftops has been the focus to date, and Gen110 has benefited from the accelerated cost compression in the solar panel manufacturing business as well as an advanced understanding of solar risk that has eased financing complexity. “Both the technology and the financing complexity for distributed generation is getting commoditized,” Brown told Breaking Energy on a recent trip to New York.
“We’re forming strategic partnerships to make sure the components work when they are complete and we guarantee that ‘best of breed’ experts are doing each part of that to guarantee quality,” Brown said.
“This won’t be much different than getting a home or a car loan” soon, Brown says.
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The firm’s model relies on meeting with individual customers their “big data” proprietary technology identifies as being heavy power users, and going over their electricity bills with a sharp eye to the potential for saving money by using installed distributed generation. Brown carries with him a sample California power bill that shows the spike in electricity costs for one of the company’s clients in the past eight years, most of it attributable to transmission and distribution cost increases that can be diminished by increased reliance on distributed generation.
The addition of solar panels, or eventually other forms of distributed generation, to a domestic property is not for everyone, and Gen 110′s customers fit within the parameters of being able to save money by relying largely on distributed power but with continued connection to the grid as source of lower priced power. “Gen110 is targeting those higher tiers of energy use – where energy costs balloon,” a spokesman for the company said. “The grid still provides lower tier, more affordable energy (for now) until costs make sense.”
Even with those guidelines, the potential customer base in California alone runs to half a million houses now, and as technology improves the base should grow to include houses that are not as energy profligate.
The heavy data analysis that drives the firm’s differentiation was part of what attracted Kleiner Perkins, traditionally a backer of promising IT companies, to invest in the two-and-a-half year old Gen110.
“I’m interested in the question of what a world where DG technology is commoditized and there are ubiquitous financing looks like,” Brown said.
“The underlying assumption that people want to pay attention to their power consumption is wrong,” said Brown, arguing that the habit of consumer spending is stronger than marketing for efficiency, smart meter or “green” usage cutbacks. “Customers don’t want to use less, they want more power for less money.”
Brown may be a sales executive with a powerful technology offering, but he sounds more like an “energy guy” all the time.