How Big Data is Driving Innovation in Energy

By Markets Fool.com

Continue Reading Below

Commercial installations are a major focus for SunPower, and a growing trove of information will help grow the business. Image source: SunPower.

How much electricity do you use in a typical day? What are your peak hours of consumption? What devices in your home use the most energy?

These are questions that most people (including me) probably don't know the answers to, and something even sophisticated businesses don't know either. How are you supposed to make smart energy decisions if you don't even have good information about your energy usage? This may be the biggest challenge and biggest driver of innovation in energy today.

Image source: SunPower.

Continue Reading Below

Information is unlocking our energy picture
As the energy landscape has evolved over the last few years, it's become possible to generate solar energy from your own rooftop and save money with dynamic pricing and demand response. As a result of these changes, it's become more important to know when and how energy is being consumed and how demand can be adjusted to save costs.

Commercial and industrial customers in particular are seeing value in more complete knowledge about their energy usage, as demand charges -- which vary based on a customer's peak load, no matter how long the peak lasts -- have become a third or more of some customers' energy bills. When these customers can make a few changes to lower demand charges even a few percentage points, it can save thousands of dollar per month.

But the first step is having the information necessary to make more informed energy decisions.

How EnerNOC brings information to its customers
EnerNOC started as a demand response company, selling energy abatement to markets like PJM to avoid using the open market to cover heavy loads. But that business was very volatile, and the company has been transitioning to providing energy information to commercial and industrial customers who don't have good energy information today.

That's where its recent partnership with SunPower comes in. EnerNOC is partnering with SunPower to cross-sell their products and provide more information to optimize renewable energy cost savings for commercial and industrial customers. This could lay the foundation to further energy advances, like incorporating renewable energy, demand response, and energy storage, but for now it's focused on cross-selling and providing information that most customers don't have today.

Carports are another commercial business that could take advantage of new adjacent products. Image source: SunPower.

How SunPower and EnerNOC view this partnership
Over the past few days I had the chance to talk with Fielder Hiss, EnerNOC's VP of Marketing and Product Management, as well as Ivo Steklac, SunPower Vice President of Solar Energy Solutions, about the partnership and how it will advance their companies' goals.

The first takeaway I had was that they're serving similar customers but don't have a lot of overlap; the partnership covers commercial and industrial customers -- which are the segment of the market our discussions were focused on -- and it happens that they don't have many in common. But their customers have similar goals, given that they're looking to EnerNOC and SunPower to provide energy cost savings. So cross selling will be a value add for both companies, and likely lower sales costs as well.

The information EnerNOC is providing to its customers will be packaged with all of SunPower's commercial and industrial installations, providing a way to track and confirm SunPower's promised cost savings. Solar is often sold as a way to save cost, but this gives customers a way to confirm those savings.

It will also allow SunPower to add to its knowledge base around how its solar systems are creating energy, when customers demand energy, and how the grid's cost structure can provide savings opportunities. It's this knowledge base that leads to the real potential of a partnership like this.

The next phase for SunPower
I asked both Hiss and Steklac about how this partnership plays into new products like energy storage and demand response with solar. They said that's not the focus today, but it's the logical next step.

With energy storage becoming more economical by the day, the information that companies like EnerNOC and SunPower partner Tendril provide will allow SunPower to know when to store locally produced energy and when to discharge it to optimize cost savings in the future. This is really when the electricity industry will be disrupted by innovative technologies like solar energy, demand response, and energy storage. But information plays a key role in that equation, and that's why SunPower sees EnerNOC as a valuable partner today.

The article How Big Data is Driving Innovation in Energy originally appeared on Fool.com.

Travis Hoium owns shares of SunPower. The Motley Fool owns shares of EnerNOC. 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.