Store Loads, Save LoadsA way to manage your energy profile and pocketbook OAP Assessment Thursday, March 6, 2008 Team: Giant Slayers Team Members: Drew Bennett, Christopher Hain, Nick Liao, Jeffrey Spehar, Eric Wan
The Opportunity • Opportunity Lever: Time of Use rates • Product: Energy storage to manage your time of use Power (kW) Peak Rates Off-peak Rates Off-peak Rates
The Target Market • Requirements: • A utility bill with a “Time of use” rate option • Small energy consumption • Target Customer • Residential single-family homes • Focus first on Northern CA • 5.2 Million PG&E Residential Customers • Growth • Annual Energy demand growth: 1.25% • Annual Peak Energy demand growth: 1.35% Source: California Energy Commission Energy Report 2007 • Future Markets: NJ, CO (favorable regulatory environments)
Business Analysis Customer Analysis (Best Case): $2480/yr $1730/yr • Peak demand (storage req.): 12 kWh The Battery: Lead-Acid Technology • Volum. density: 70 Wh/L • Efficiency: ~80% • # of cycles: 500-800 • Cost of energy: 10 Wh/$ • Savings: $750/yr Load shift with storage • To meet peak demand, we make a product that… • is the size of a small refrigerator • costs $1200 to make • lasts at least 5 years.
Business Model • Cost per unit: • $1,200 + $300 overhead, delivery, and services = $1,500 • Revenue per unit: • 3-year payback at $750/yr = $2,250 • Add value of surge protector and backup power “generator”: $250 • Profit projections: • $1000/unit in best case customers, $100/unit in worst case • Size is customizable depending on kWh need of customer • Energy savings has close relationship with kWh need • 5M PG&E customers at 10% penetration rate = 500,000 customers • ~$60M market in Northern California alone
Challenges and Risks Technical • Standard risks with taking a product to market • R&D, Manufacturing and Production, Sales and Marketing • IP risk: anyone can copy our product • Lead-acid technology is relatively mature • Distribution and Installation infrastructure • Safety concerns Market • Rate disparity drives our opportunity • Rates are not under our control • Rates are set by California Energy Commission and Utilities • Possibly Mitigate by Political Lobbying or Partnering with Utilities
Competition and Proxies • GridPoint Technologies • Raised $88.5 million investment. • Named top 100 technology pioneers by Davos World Economic Forum 2008 • Key Differentiations: • Market: Commercial vs. Residential • Control given to utilities vs. residents • The Utilities: “Load-Leveling” • Store and use old EV batteries in a leveling bank • Store off-peak energy and release on-peak • Potential conflict: who has the control? • Utilities or Households? • Potential Distribution Partnership • Also Potential Competition
Growth Opportunities • Expansion after pilot in Northern CA • Almost all American utilities have Time-of-Use rates • “Plug and Play” Energy Platform • Integrate third-party energy efficiency and distributed generation systems • Open Source software to designers of: • Photovoltaics • Cogeneration products • Smart use and energy distribution • Generate and report user statistics
Conclusion • This is a bona fide opportunity. • The market is growing and so is consumer awareness. • The technology is simple, flexible, and gives the consumer control. • Long-term market risks exist, but development of platform standard will mitigate these risks. Questions?