Opower[NYSE:OPWR]: Changing the World with Data Analytics

Opower[NYSE:OPWR]: Changing the World with Data Analytics

CIO VendorDaniel Yates, Founder & CEO For many people, a year-long road trip spanning the lengths of the two American continents, traversing latitudes, fording rivers and lakes, and crossing international borders would mean a cosmopolitan experience and a quintessential traveler’s dream. For Daniel Yates, it was more than just that. The amusement of beholding unseen flora and fauna was distinctly marred by the sight of neglected forests and devastated wildlife reserves. In order to eke out a living, the people in the surrounding areas encroach beyond their confines, trespassing with the laws of nature, causing a resonating imbalance, worldwide. Between running an education software company and moving on to the next venture, what started as a leisurely entr'acte, led to a visceral fear for the fragile universe we live in. Daniel Yates, founder and CEO, Opower[NYSE:OPWR] will always recall the day he returned from the trip wondering in what small way could he possibly help and the wheels were set in motion. The answer was evident, “at the end of the day, we were by far doing the worst—using dirty energy,” Yates infers.

Behavior Analytics: The Fourth Perspective

The path leading to an improved energy and utility sector was an incremental one and it takes the most minimalistic of changes t o cause a monumental transformation. Having deduced that, Yates pondered upon the best action plan to put his initiative to practice. It was at this time that Yates stumbled upon an experimental study, orchestrated by world-renowned behavioral psychologist, Robert Cialdini. When Cialdini approached a particular area for study, he campaigned on conserving energy, issuing door-hangers with captions propagating the three-fold benefits— monetary, environmentalist, and society and family—of turning down air-conditioning units when not in use. “There was, however, a fourth caption that promulgated a different perspective,” says Yates. It simply read, ‘Join your neighbors’. Where the monetary, environmental and social advantages failed to catch the eye of consumers, the ‘neighbor ’ card brought down the energy consumption in that area by 6 percent. “When you are operating in a complex environment like energy, you don’t know much about it, benchmarking to wisdom of the crowd is good,” Yates points out.

Founded in 2007, Opower began collaborating with utility companies by receiving their consumer energy data. Preliminary analytics revealed that energy consumption in a group of similar homes from the same neighborhood was dispersed and followed no pattern. They started with electricity bills, and other utility bills, and realized that other than the amount due, the bills carried trivial information, which was in no way helping the consumer. Wielding this opportunity, the Arlington, VA headquartered company launched their first product—Opower home energy report, a purely analytics-driven reporting tool.

Sacramento Municipal Utility District (SMUD) was their first project and Opower sent consumers of SMUD, reports on how their energy usage varied with neighbors. Witnessing a marginal, yet, game-changing reduction of 1.5 to three percent reduction in energy usage, Opower began full-fledged research and developmental operations on analytics and the huge volumes of big data surrounding it.

When you are operating in a complex environment like energy, you don’t know much about it, benchmarking to wisdom of the crowd is good

Meeting Demand-Side Demands

The innovative products that resulted, has multifarious benefits that both DSMs (Demand-Side utility Managements) and end-consumers can equally reap from. Running on top of a Hadoop and MapReduce grid, gives Opower ecosystem the reliability it takes, to ameliorate its analytic perfection on data that is centered on every individual consumer. Energy Efficiency, a DSM software, entitles utility managements to rise to the consumer’s expectations, deriving more profits from the actual cost incurred. With EE, utility managements can build customized programs, which can choose and send personalized home energy reports to consumers, periodically. Utility companies gain accurate insights into the energy usage data, sifting through the data with logical filters to target a particular group of consumers. They can deliver reports based on real-time factors like weather, humidity, and season that have a direct impact on usage of electricity, water, and gas.

Empowering utility providers with information related to live usage activity across specific service territories, Opower ’s Demand Response product helps in managing peak demand. Active monitoring of this statistical information will help them design action plans like sending text messages and e-mails to motivate end-users to save energy during expected peak dates. Bringing a closure to members who contributed, Opower sends feedback with graphical illustrations, welcoming wider participation rates.

What is there in it for Consumers?

No business can thrive in the market and sustain competition, if the end-user ends up with nothing more than the basic offerings of a product. Opower embraces the power of consumers—that largely comprises of households, in the big picture and humans as its micro constituents—and their role in contributing to the future of energy. ‘Digital Engagement’ is a web platform that—with its intuitive and powerful interface—brings consumers on board the digital world in managing their energy engagements. By logging on to the website, end-users can now have personalized and clearer insights into their billing details, and live statistical information regarding their utility usage.

A one-stop-go solution, Digital Engagement is a consumer-centric effort, which encourages utility users to conservatively utilize home energy and in turn offers them perks like Amazon gift vouchers, Starbucks coffee coupons and various other redeemable reward points. With embeddable widgets and APIs, Opower allows easy-deployment and seamless integration of these implementations.

Bill Advisor is an indigenous innovation, which thrusts the baton of responsibility into everyone’s hand. With active alerting systems, consumers are instantly notified on high volume utilization and a projected figure of bill due that month. It also compares the usage with that of the same month the previous year and ancillary feature, helps them identify the major source of hike with a breakdown—from heating, appliances, lighting, and electronics to name a few. As a retrofit attempt, Opower delegates its CSRs (Customer Service Representative), to answer service calls more efficiently and effectively. By equipping them to handle calls and tactfully respond to energy-related queries, Opower saves energy utilities to reduce handle times by 30 percent, trim down the occurrence of repeated issues, and prevent truck rolls for meter testing.

"We wanted to make an incremental improvement and we made it, and since then it has been snowballing"

Augmenting the Experience

Opower’s clientele includes some of the top players in the energy and utilities industry. Spinning the spotlight on Opower’s proficiency in delivering a sophisticated energy experience, Jason Teller, VP of Customer Solutions, Puget Sound Energy recounts his experience with Opower. PSE, headquartered in Bellevue, WA, is Washington State’s age-old, thriving energy company, serving gas and electricity to over a million customers. “In a time when customer expectations were on a surge, we wanted to bridge the gap between their expectations and our delivery,” says Teller. They were on a lookout to collaborate with companies that were best-in-class, and whose core competency dealt with data and analytics. “That was where Opower fit in the puzzle,” Teller adds. Opower targeted at augmenting the experience for a customer with its added features for billing, call center, move-in and move-out, new construction and replacing an appliance.

Opower has collaborated with potential retailers and third parties, who can join their campaign in providing low-consumption products and solutions. Personalized content would mean personalized recommendations for the end-consumer, where they have several options at their disposal like energy saving home-appliances, lighting, and other electronic goods.

Opower started as a simple idea to work with utilities for mapping energy-use in homes. With over 500 billion meter readings from more than 60 million households and businesses, Opower has declared a battle call globally, convening awareness to its energy campaign. “We wanted to make an incremental improvement and we made it, and since then it has only been snowballing,” states Yates.

- Chithra Vijayakumar
    March 15, 2016