Editor’s note: This is part of VentureBeat’s series “Startup Spotlight.” Every week, we’ll sift through the scores of companies applying to be promoted and profile the best one. Companies can sign up here at the Entrepreneur Corner, which is currently sponsored by Microsoft. (Of course, we’re still interested in covering startup news and innovation in our day-to-day coverage.) Today, we continue the series with Power2Switch, below.
Power2Switch, a young startup bringing the energy market to the web, may just be innovative enough to disrupt the way small businesses buy electricity. The company has launched a web portal that gives enterprises more information on energy suppliers and empowers them to switch to a new vendor without any interruption in service.
The ability to choose between energy providers is significant for several major reasons. Via the portal, businesses will be able to find the most cost-efficient electricity solutions to fit their needs — stirring competition and perhaps even driving electricity costs down across whole segments of the market. On top of that, it gives them agency in choosing where their electricity comes from. Power2Switch says that one of its core goals is to inform users how to tap into renewable sources of energy if they are particularly interested in shrinking their energy and emissions footprints. This is particularly relevant to small business as eco-friendly practices become an increasingly compelling marketing tool — not to mention as Congress mulls carbon reporting, cap-and-trade and carbon tax legislation that could have a real impact on businesses of all sizes.
Because the site is so young, it’s not yet fully operational (and not as polished as it probably will inevitably become). The homepage asks you submit your street address and zip code promising to list competing electricity vendors to choose from. For now, this information is only available for a very limited number of locations — in fact, just commercial areas in Illinois for now (the company is based in Chicago). A national or residential rollout may be in the cards, but won’t come close to fruition before the model has proved itself in this region.
Power2Switch has certainly set some lofty goals for itself. Not only does it advertise that it can knock 10 to 40 percent off users’ energy bills, it promises that switching certified electricity suppliers is possible not only immediately, but also without any change in metering or infrastructure. Still somewhat stealthy, the company has provided little information on how it makes this possible. For its soft launch in Illinois, the startup is in negotiations to recruit up to 23 retail electricity providers. The state was chosen due to the Illinois Electric Service Customer Choice and Rate Relief Law, which passed in 1997 to deregulate and allow for competition in the energy market.
Power2Switch’s claims are legitimized by its partnerships with Transparent Financial Services — an online comparison shopping platform for small businesses — and Berkeley Ventures, the recently launched Bay Area incubator. Its leadership also bring impressive experience to bear. Co-founder and chief executive officer Seyi Fabode came to Chicago and Power2Switch from the electricity industry in England. In Europe, it is standard for consumers and enterprises to be able to compare rates and choose from a flock of competitive energy providers — so he’s observed the model firsthand.
Attitudes toward energy utilities and electricity bills are shifting rapidly these days, with massive smart metering initiatives deploying across the U.S. and home energy management systems like Google PowerMeter and Microsoft Hohm entering the spotlight. Consumers appear to have a larger appetite for data on their power consumption habits, and are more eager to modify their behavior to conserve electricity and save on their monthly bills. The current method for buying electricity has been likened to paying a single bill for groceries at the end of every month, which sounds ludicrous to most people. Companies like Power2Switch aim to provide more transparency into the process so that users can see exactly why they are shelling out as much as they are, and whether or not they have a choice in the matter. It might take a while, but these are ideas are likely to take hold across the country — or at the very least outside of Illinois — before too long.
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