Somewhere in the middle of a long run of work travel and vacation (whew, on the road every day from January 5-22), Google acquired Nest.
It’s certainly interesting. And Nest honcho Tony Fadell has got to be smiling. I’ve seen a lot of excitement in the efficiency community about Nest in general and the acquisition. My friend Peter Troast of Energy Circle wrote an interesting piece on why this bodes well for home performance. Peter makes a good case.
But I’m skeptical. I don’t think this has much to do with efficiency at all. And I don’t think it helps efficiency much. Here’s why.
Peter argues that this might help home performance in part be because the folks at Google see a similar opportunity, a lot of homes that use a lot of energy. He’s right. I think, though, the opportunity they smell on that side aligns more what we’re seeing in various forms around the country. Namely, many smart people are eating the utilities’ lunch by poaching all of the easy opportunity for revenue from the utilities, and they are doing it outside or the regulatory environment that utilities face. Have Tier 4 rates in California? You’re a prime target of behind the meter storage and/or solar. And the economics of dropping you down a tier (or two) make sense. We can sell you that today and take prime revenue from the utility. Even outside of Google/Nest, I think we’ll seem some interesting things in this arena as utility commissions are slow to react to the changing landscape. (I’m not even talking about the net metering argument here, but there’s closely related.)
Further, with Nest, Google now has hardware to play in the DSM game. Lots of folks want in, including HVAC equipment manufacturers and big players with products that still compete well with Nest’s $250 thermostat (I’d need seven of those in my house–but hey, Google may drop the price to $25 to get in homes) with their own proprietary tech. We’ll see how the wrestling match with utilities goes–they like to plug in their own widgets.
Get a lot of homes connected, and I don’t doubt this could be done for public good. But it doesn’t have to be. Anyone remember Enron and rate manipulation? Clearly, I can’t say that this is where Google is headed, but it’s not beyond my wildest dreams.
I suspect as Google started sending unsolicited email from Google+ to gmail inboxes, it also sees ways to monetize Nest data well beyond anything energy related. Nest provides another lens into how we live in our homes. Now, I’m not so paranoid of Google having my energy bill data. (If they ask, I’ll send them last years’). But I’d be willing to bet they’ll find a way to sell data to folks who want to sell me stuff, and most of it will have nothing to do with efficiency or even energy. Nest is a good foot in the door, but there are others from streaming devices for TV to smart appliances that will be moving increasingly into homes. With that, efficiency’s moment in the spotlight could fade.
Sure, Nest has captured attention. But even pre-acquistion it also could be a distraction. Heck, if your thermostat can fix everything, why insulate, air-seal, or pay more for a high-efficiency air-conditioner or furnace? Why build a Passive House?
Don’t get me wrong. The right controls could make a Hummer use less gas. But controls won’t turn a Hummer into a Prius.
There is no doubt that technology like that in the Nest thermostat could be used in ways to really promote efficiency. But that is not an automatic outcome, nor I think a likely one. Here’s hoping I’m wrong!
In the meantime, the physics of heat transfer still apply, so let’s keep fixing homes and making our customers happy.