Energy Savings Alone Isn’t Enough, and Other “Insider” Info
By: Dave Weinerth
Thanks for visiting SCIenergyCoach.com. As a reward, I’m going to leak some information about SCIenergy and myself. But, you have to read the whole thing. Fair enough?
The definition of ‘value proposition’ is
ratio of benefits—preferably quantifiable—to total cost of ownership. So, if your technology creates energy savings that drives a payback of fewer than 18 months, that’s pretty good, right? Most solution providers have been told that’s a no-brainer—of course it’s good. So why is Energy Efficiency the “highest priority for virtually no one?” Like any customer-focused company, we at SCIenergy believe the customer is always right, but perhaps doesn’t always know their full set of options. We do know they value sustained energy savings. But, only through a number of market iterations do we now understand that the customer wants something else to come with it.
We’re now in our third iteration of assembling the correct product/service mix for building owners and operators. We call it SCIenergy 3.0. I’ll explain that later. SCIenergy 1.0 was about a specific technology developed by Scientific Conservation—automated fault detection. We named the product SCIwatch®, and it used data from a building automation system (BAS) and performed complex diagnostics to detect “drift”, or mechanical degradation and changes in system performance. Subsequently, SCItrack™ used data from the utility meters and sub-meters, sometimes through the BAS, to track energy consumption and provide analytical tools to identify savings opportunities. Building systems diagnostics—check. Energy consumption tracking—check. We had it covered, and customers were interested. But, they wanted more.
Buildings are complex. Every building has its own ecosystem of mechanical and lighting systems, varying control software, and a unique set of stakeholders. If you’re lucky, you have a company who owns the building, manages it, and works in it. That’s often not the dynamic in a commercial building, however. To make matters more complex, optimizing building performance requires access to lots of data. Navigating these stakeholders and BAS vintages requires people. Experienced people. They need to have skillsets that include building controls, gateway devices, communications protocols, HVAC, lighting, and energy. Enter SCIenergy 2.0, with the merger of Scientific Conservation and Servidyne. It was brilliant—high tech from the SCIenergy cloud™ plus high touch, to produce actionable insights! We even launched Intelligent Retro-commissioning™ or iRCx™. We would not only identify the fast-payback energy conservation measures, we’d also implement them. This clearly was resonating with customers; and, partners—primarily engineering service companies—wanted in. iRCx works, and the sustained performance is an obvious improvement over conventional utility programs for retro-commissioning. But, our customers had buildings where they wanted to do more than optimize existing systems. They wanted upgraded systems, with one additional caveat.
Pay for it.
At first glance, that sounds like a lot of leverage on the customer end. Bring the technology, upgrade building systems, deliver the energy savings, and now pay for it. And, if the savings isn’t there, suck it up. That doesn’t sound like a fair exchange, does it? On further reflection, we understand that the building owner and operator weren’t downplaying the role of technology or expertise; rather, they were saying, “Put your money where your mouth is.” We interpreted it to mean a turnkey approach to energy efficiency, using whatever tools we need to deliver a step-change in performance. SCIenergy’s acquisition of Transcend Equity Development Corporation was targeting just that. SCIenergy 3.0—using SCIenergy cloud applications to create the visibility for engineers to model performance and implement energy efficiency projects. We’re looking for step-changes in performance, the kind that can help to re-position a building in the marketplace. Transcend had done this for 30 buildings over the past nine years! They averaged 26% savings across their buildings under management—it really works! Now, we’re raising an investment fund to scale MESA™ (Managed Energy Services Agreement) by an order of magnitude. We’re wildly excited about this!
Okay, here’s the bittersweet part (“insider” information coming). SCIenergy 3.0 required three companies to be integrated. That means there were redundancies in sales, marketing, operations, IT, finance/accounting. This market requires agility, which translates to lower operating expenses in order for the company to take flight. Agility has been restored, but primarily through tough choices and leaving good people behind. Unfortunately, this author (mostly good) is included in that group, but still wildly excited about SCIenergy’s potential.
A few years ago, solar companies had to adjust from system sales to leases and power purchase agreements. Customers were initially dazzled by solar systems and tax incentives. Perhaps they were just making early adopter, “green” statements with modules on their roof. Then, they started to question why they were taking all the performance and financial risk. The companies who have survived are solution providers who innovated around their customer delivery models. The ones who have thrived apply their technology-based efficiencies for their own gains. Oops—did I just spill the secret sauce? Study up on MESA and find out!
About the author
Dave Weinerth has a diverse background in the cleantech space, having provided marketing and business development leadership for technology-rich companies with renewables, energy management, and building performance solutions. He joined SCIenergy in 2010 to develop strategic accounts and lead the company’s efforts in commercial real estate. Until recently, he led SCIenergy’s global marketing efforts. Prior to SCIenergy, Mr. Weinerth served as Director of Business Development at the Palo Alto Research Center (PARC) where he led the group’s Energy Domain of Innovation as well as a solar company spinoff, SunLyne Corporation, as CEO. His background also includes consulting for Technology Ventures Corporation, founding a wireless telemetry company, along with a variety of management and engineering roles at BOC Gases (now Linde), Guardian Industries, and the United States Army. Mr. Weinerth graduated from the U.S. Military Academy at West Point with a degree in Engineering Management, and received a Masters of Business Administration from the University of Michigan, Ross School of Business. He can be contacted at firstname.lastname@example.org.