Is This the Silver Bullet for the Environment?

Utilities are willing to pay Google a lot of money for data on your energy usage.

Apr 27, 2014 at 11:40AM

The future of energy efficiency could be driven by data. At least that's what companies such as SolarCity (NASDAQ:SCTY) and Google (NASDAQ:GOOG) (NASDAQ:GOOGL) are banking on. SolarCity offers its customers PowerGuide, a home energy monitoring system. Meanwhile, Google's recent purchase of Nest Labs came with the Learning Thermostat, which also monitors home energy use. Both systems are aimed at saving consumers money by using data to reduce energy consumption.


Photo credit: Google. 

The idea is that homeowners will use this information to make money-saving changes to their energy consumption. SolarCity cited research that found that "immediate feedback" on energy use could save users 5%-15% on their utility bills. This happens because customers will use the real-time feedback provided by the data to shift energy-intensive activities, such as washing clothes, to off-peak hours to level out usage. This saves the homeowner money and reduces peak load demand at the utility, which could mean burning less coal.

Google's Learning Thermostat can actually take this data one step further. In select areas of the country, utilities will actually pay owners of Google's Learning Thermostat to have their thermostats turned down during peak demand on hot summer days. The program, called Rush Hour Rewards, could enable homeowners to receive rebates of $20-$60 from their utility for unit, in addition to the energy savings from turning down the air conditioning during peak demand.

Nest Cooling With Leaf

Photo credit: Google (nest cooling with leaf)

The program allows the thermostat to pre-cool a home when it's cheaper to do so. Then, while everyone else is paying peak rates, the Rush Hour Rewards member's AC unit auto-adjusts to a higher than normal temperature. This should keep participating homeowners comfortable, while saving them money and reducing peak load demand for the utility.

Utilities are willing to pay big money for demand response systems such as this. It is estimated that a good demand response system, which will reduce energy use in a home by 30% during peak times, is worth about $80 per thermostat. Nest believes that it can actually reduce consumption by 50%-60% during such periods with its thermostat, making it even more valuable to utilities and to homeowners.

Access to have real-time data to drive energy use down could have a significant impact on demand. Data could encourage SolarCity customers to hold off on energy-intensive activities, while that same data could lead to rebates to owners of Google's Learning Thermostat. While this trend might not be the silver bullet to save the environment, it can help by leveling out some of the energy load during peak times. Not only will that reduce the amount of fossil fuels being burned to meet demand, but it will save both consumers and utilities a lot of money.

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Matt DiLallo owns shares of SolarCity. The Motley Fool recommends Google (A shares), Google (C shares), and SolarCity. The Motley Fool owns shares of Google (A shares), Google (C shares), and SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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