EnerNOC, one of the best-known demand-response companies in the field, has been gobbling up competing and complementary companies to expand its reach, hoping to bring down the costs of its programs enough to cater to smaller businesses. Now it has acquired Boulder, Colo.-based SmallFoot to do just that.
EnerNOC is one of several companies, including CPower and Comverge, that redistributes energy loads on electrical grids when peak demand is climbing dangerously high. Brownouts and outages occur when demand exceeds supply, leading to millions in maintenance costs for utilities, and lost revenue for their commercial customers. Not only does EnerNOC prevent this from happening, it also gives utilities financial kickbacks for reducing their energy consumption during peak periods.
Before the deal, SmallFoot was tackling a very small part of this process. It makes wireless communication systems that sense when demand is getting too high and automates reductions in energy to maintain grid health for small businesses.
Focusing primarily on big-box retailers and major corporate interests, EnerNOC hasn’t had that much success with small businesses. They make up about 25 percent of its client base, even though 90 percent of all businesses are categorized as small. The purchase of SmallFoot provides an inroad into that portion of the market. It will bring new clients into EnerNOC’s fold as well as the technology to run demand-response programs on a smaller, less expensive scale.
SmallFoot is EnerNOC’s third acquisition in the last year. In 2009, it bought enterprise carbon management software maker eQuilibrium Solutions as well as building-efficiency monitoring company Cogent Energy for $3 million in stock. The financial terms of the recent deal haven’t been disclosed.
This is the second big announcement out of EnerNOC in as many weeks. It also recently landed a big deal with Pacific Gas & Electric to provide demand-response services to the utility’s commercial and institutional customers. PG&E will also use the data gathered by EnerNOC’s system to get a better sense of how its customers use energy — and how they waste it.
These commercial and institutional customers will have to opt in to the demand-response programs; they aren’t being deployed automatically. In exchange, these companies will save money they would otherwise have spent on expensive peak power and will receive energy use analytics and reporting software free for one year.
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