It has taken awhile to arrive, but one of the more interesting — if unsung and unsexy — sectors in energy right now is software. (Below, I share a smart way to profit right now off this burgeoning sector.)
A whole array of new applications is finally hitting the streets: Systems that let consumers monitor their energy usage. Software that helps utilities redesign their grids to accommodate more distributed generation. Solar system design tools. Smart grid management systems. Bigger, better databases of actual solar insolation (sunlight), actual component performance, and actual customer usage, all slowly being integrated together.
Consider, as an example, the transformation that has happened in solar site evaluations in just four years.
Here's what I had to do to bid on a rooftop solar PV system in 2006.
I would arrive at the customer's house with a 16-foot folding ladder and a backpack full of gear. I would spend half an hour going through several years of paper bills (if they had them), copying the kilowatt-hours used each month onto a piece of paper.
Then I would climb up on the roof and look for the best, unshaded location to install the modules. I would use a bulky, domed device to make a drawing of the shading profile on a paper grid.
Then I would spend an hour or more making a hand drawing of the roof, measuring every surface and penetration. I needed two kinds of physical tape measures and a laser measure. I carried a special, foot-long angle meter to measure the slopes. A hand compass would give me the right orientation for all my gear... if some nearby interference didn't throw off the magnet.
I would shoot dozens of pictures and video clips of every roof, hoping to capture details that I might have missed on my hand drawing.
Back at my office, I would re-create the drawing in a CAD program, which could take hours.
I copied the usage data into a spreadsheet, which had very coarse-grained historical data for the hours of sunlight typically received in a given city. Then I would eyeball my drawing of the shading profile, and enter the amount of shading that I thought the system would receive at each hour of the day at various times of the year.
This tool allowed me to estimate the output of a given system design.
Then I would return to the CAD drawing and try to fit the equipment I needed onto the roof, consulting the photos and video as I went. Then I'd have to change the equipment in the estimation spreadsheet.
Rounds of adjustments would be needed to get the system right. Then I would draw in all the associated equipment, and calculate the racking down to the last nut and bolt.
A final spreadsheet would take data from the other spreadsheets and let me generate a financial model based on coarse historical data about the price of energy. And all of the spreadsheets were created in-house by a talented software engineer.
It would take a minimum of six hours just to produce a detailed bid, before the sale was even made. It often took far, far more. It's one reason why I decided to get out of the business.
Now consider what it takes today, just four years later.
There are now over a dozen apps that will almost replace that backpack full of gear with an iPhone.
The angle meter? Gone. You can lay the iPhone on the roof and it will tell you the angle, or you can stand on the ground and shoot the roofline and it will calculate it. The compass? Gone. Even the camera — gone. You can shoot pictures of the site with the iPhone, then automatically stitch them together into a panoramic photo.
Name your site, and the latitude, longitude, elevation and altitude are automatically downloaded via GPS. Pan the camera around, and it figures out the shading, then shows you the path of the sun at various times of the day and the year. Check your overhangs and your solar window, and work around your roof penetrations in a snap.
Then just choose your equipment of choice from the built-in database and the enter the local price of a kilowatt-hour.
Boom. In a couple of minutes, I could do what used to take hours. Sun plot and shading maps, an equipment list, and rough estimates of the system's production and the financials—done.
Other apps will even help you size the wire and conduits, convert units (like Btu to kWh), and make graphs.
For a field rep, the advancement is nothing short of phenomenal. All that's missing now is a way to download customer usage data from the utility right into an app, and some next generation solar add-ons to CAD software.
Software is poised to make as much improvement in energy auditing as it has in PV site evaluations, and in about the same period of time.
Just a few years ago, a highly trained energy auditor would spend hours (or weeks) crawling all over buildings and mechanical rooms, counting light bulbs, copying down nameplate data from HVAC and other systems, poring over floor plans, taking lots of photos, doing data entry in clunky homegrown spreadsheets, and eventually trying to integrate it into various modeling tools that didn't work well together. But no more.
A new system by startup kWhOURS, Inc. promises to slash the time required to perform an audit to a fraction of what it was, and automate the production of reports. It will export spreadsheets and play nice with standard analysis software developed by the DOE.
The San Francisco company Recurve has developed an internal system to streamline its own energy auditing and make it easier to design energy efficiency retrofits. Various builders across the country are now testing the software, which is likely headed for licensing.
On the hardware side, Recurve founder Matt Golden (a friend of mine) has also recently helped formulate a proposal for a new federal efficiency program called HOMESTAR, which would offer rebates up to $3,000 for a host of home efficiency upgrades including windows, insulation, caulking, and sealing for ducts, doors, and windows. President Obama outlined the program this month, touting the thousands of jobs it will create, and savings of as much as $500 a year for participants.
As my readers know, I have long been a champion of energy efficiency retrofits as the low-hanging fruit in addressing our energy challenge. And as Golden points out, over 90% of the materials needed to perform them are "Made in the U.S.A."
A slate of software projects recently approved for $9.3 million in grants under the California Solar Initiative Research, Development, Deployment and Demonstration Program are tackling some of the larger challenges of the "smart grid"...with substantial matching funds.
The projects will be administered by Itron, Inc. (NASDAQ: ITRI), a longtime smart metering favorite.
One in particular, a proposal from Clean Power Research (CPR), caught my attention. With a budget of over $3 million, it will develop a model of solar resources using satellite data. Spatial resolution will be enhanced from 100 km2 today to 1 km2, and temporal resolution from 1 hour to 30 minutes. The system will be built upon an open-source distribution engineering and analysis tool used by utilities, and integrated with PV performance and economic screening data, to help identify the locations with the best potential for high penetration of PV systems.
When completed, the system will be made freely available to the public in California, and should vastly improve the industry's ability to deploy and integrate distributed solar into the network. The participation of various entities from New York and Arizona in the project suggests that the tool could be adapted eventually by other states.
A similar $1.3 million proposal from SunPower Corp. (NASDAQ: SPWRA) will improve temporal resolution of solar resources all the way down to 1 second, and integrate with SunPower's monitoring data and standard simulation tools to help grid operators maintain grid stability in near-real time as sunshine comes and goes in various areas.
Six other projects will work on communications between PV systems, smart meters and utilities; help customers determine the right mix of efficiency measures, energy storage, demand response, and PV; help utilities identify and correct weaknesses in the distribution infrastructure; improve inverter performance; and enable utilities to improve grid control, maintain voltage stability as cloud cover comes and goes, and perform better forecasting.
Recently, my colleagues at Green Chip uncovered a still hardly heard of company with the technology that could, in fact, be the backbone of the new Smart Grid. This technology is a next generation electrical system that's quickly replacing the antiquated and outdated current electrical grid.
In just three months' time, this tech allowed our publishing offices in Baltimore to cut energy bills by 44%, because this particular device saves energy in a way we've never before seen. It is this kind of innovation that will allow us to monitor energy usage, use energy as efficiently as possible, and preserve the future of our grid.
The best leadership in the energy revolution that Silicon Valley can offer is not in seeking the "next big thing" as Vinod Khosla is doing, nor is it in trying to drive carbon to zero in energy, as Bill Gates exhorted in his recent TED conference address.
Instead, it's in doing exactly what it's best at: software and embedded systems. Not silver bullets, but silver BBs.
Hey Bill G — How about working on an open standard with Apple and Google and appliance manufacturers to deliver some sexy consumer energy monitoring solutions for the iPhone?
Until next time,
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