July 22nd, 2019 — U.S. electricity markets have traditionally been run by utilities operating as regulated monopolies responsible for sourcing and transporting electricity. In the mid-1990s, several states opted to deregulate electricity markets in an effort to reduce costs and improve customer experience. These policies introduced competition for electricity generation and retail, and for the first time allowed residential customers to select a retail electricity provider (REP). Today, 60 million residential households and apartments in the U.S. are in deregulated markets, representing 25% of the population and a collective $75B per year in electricity bills.
In theory, electricity choice helps end-users engage with their energy consumption. In reality, choosing a plan can be a daunting task for those unfamiliar with electricity markets. While price-sensitive C&I customers save money through electricity choice, residential participation rates are low. In 2017, only 13% of residential customers in retail choice markets actively participated in selecting plans. Engaging residential consumers on their energy use is a critical first step to unlocking what the NRDC, EPA and other experts have described as the largest source of CO2 reduction potential: residential energy efficiency.
Opportunities to Improve the Market
Low participation in deregulated markets negatively impacts both REPs and end-users. By selecting default options, consumers fail to optimize for usage or renewable energy preferences. As a result, REPs see limited information about their customers, making it difficult to improve offerings and retain households on plans. For the market to truly help users save money and choose renewables, disconnect between REPs and retail customers must be addressed. WattBuy bridges the gap between REPs and retail customers by building meaningful relationships with end-users as a trusted, neutral entity.
The Benefits of Residential Electricity Choice
WattBuy's online marketplace empowers consumers to choose electricity plans that promote renewables, enable savings, and provide actionable insights on energy use. Using machine learning and artificial intelligence along with household usage data, Wattbuy creates individualized analytics to suggest energy plans and connect users directly to REPs. Retail customers save time and money by quickly identifying plans that correspond to their energy needs, while REPs find customers faster and at a lower cost. REPs pay WattBuy through both an upfront and recurring fee.
WattBuy’s highly scalable customer base comes from partnerships with several stakeholders in the real estate industry that benefit from enhanced services to their tenants. As they continue to grow alongside service companies like Hello Alfred and Zego (which was recently acquired by PayLease), WattBuy is able to enter any newly deregulated market.
Powerhouse is excited to work with founders Naman Trivedi and Ben Hood, who bring 25 years of collective experience from positions at Google, the White House Office of the President, and the World Bank. With user-friendly technology, a strong go-to-market strategy, and significant partnerships, WattBuy is well-positioned to succeed in a large and growing deregulated energy market.
Congratulations to WattBuy on the close of their $1.2M Seed round.
Special thanks to Marie Thompson, Alex Harbour, Eli Oftedal, and Anna Yee.
To read more about Powerhouse Ventures’ other publicly-announced investments, visit our Insights page.