Smart Buildings

“Turning Entire Cities into Virtual Power Plants” with Opower & FirstFuel

Just 2 months after the signing of a strategic partnership between energy intelligence and software firms Opower and FirstFuel, the companies claim to be feeling the benefits already. The partnership signed in September this year, brought together Opower, who provide cloud-based software for the utility industry, and FirstFuel Software, provider of commercial energy intelligence. Combined, the firms provide a package to serve all customers across residential, commercial and industrial sectors. Third quarter financials were above expectations and Opower CEO Dan Yates said during his company's earnings call that a "major expansion" was also finalized during the third quarter 2014. Opower’s largest market remains the U.S. but recent growth has been seen overseas and with gas utilities, as well as cross sales with existing customers. International sales made up 16% of third quarter revenue, a figure that the company foresees growing to 50% in the long term. Within the U.S., however, Opower also sees significant room […]

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Just 2 months after the signing of a strategic partnership between energy intelligence and software firms Opower and FirstFuel, the companies claim to be feeling the benefits already.

The partnership signed in September this year, brought together Opower, who provide cloud-based software for the utility industry, and FirstFuel Software, provider of commercial energy intelligence. Combined, the firms provide a package to serve all customers across residential, commercial and industrial sectors.

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Third quarter financials were above expectations and Opower CEO Dan Yates said during his company's earnings call that a "major expansion" was also finalized during the third quarter 2014.

Opower’s largest market remains the U.S. but recent growth has been seen overseas and with gas utilities, as well as cross sales with existing customers. International sales made up 16% of third quarter revenue, a figure that the company foresees growing to 50% in the long term.

Within the U.S., however, Opower also sees significant room for growth. It will grow its platform with third-party vendors and also claimed it is working with a large system integrator that could help bring the company's products to additional utilities.

Surveys by the 2 firms have highlighted the desire of end users for “more energy information and advice”, claiming 90% of consumers “want more insights” on their electricity usage. The combination of Opower and FirstFuel products certainly seems to offer just that and, together, they cover all users; residential, commercial and industrial.

Between them the firms have analysed annual data from over 100 billion energy meters, which serves to optimise their energy saving software. Opower, with its 52 million residential and SME customers created savings of 5 TWh and $551 million. Similarly, FirstFuel, who have over 20 major utility and government clients, provide savings of 4.5 TWh and $600 million annually.

In late 2013 Opower piloted a project, which went one step further, their behavioural demand response programme. “We had to move from getting customers to reduce energy use some of the time to all of the time,” said Tom Mercer, group product manager for Opower.

Behavioural programs can also help increase participation in automated programs, by getting customers more involved in and used to energy saving programs, Mercer went on. It seems logical that only through considerable user engagement, can we achieve the levels of energy usage efficiency possible, and in that light, we can see the significance of the behavioural demand response programmes.

"We think there's enough information to show this is game-changing," stated Roderick Morris, Opower's senior vice president of marketing. "Behavioral demand response gives us the ability to engage any service territory anywhere instantly, turning entire cities into virtual peaking power plants".

For the fourth quarter, 2014, Opower said it expects total revenue to be in the range of $33.2 million to $33.6 million, and adjusted EBITDA is expected to be a loss between $5.5 million and $6 million. Total revenue for full-year 2014 is expected to be about $127 million, an increase from prior expectations of total revenue between $120 and $123.5 million. For the year, Opower anticipates adjusted EBITDA is will show a loss of around $15 million.

With more energy saving results and reports expected in the spring of 2015, we should expect to see further expansion of the Opower / First Fuel solutions, both in the US and internationally.

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