Internet of Things: Chai Energy's Connected-Home Technology a Win for Consumers

Issue: 
Cole Hershkowitz

You are CEO of Chai Energy, Inc., which is involved in next-generation home energy and automation. What’s the essential promise of Chai’s technology?

Cole Hershkowitz: A lot of people classify our industry as “energy monitoring” or “behavior change.” At Chai, we try to view energy data more humanistically.

A lot of people collect energy data in one place. In the best case, they’ll put a graph, dial, or number on your phone. At Chai, we go a step beyond that. We interpret that data. We try to figure out what all those energy numbers mean. We’ll tell people if their refrigerator is inefficient, and how much they could save by getting a new fridge. We’ll show them the rebates that they can get for that fridge in order to save money. We’ll offer different financing options.

We do similar things for washing machines and dryers. We’ll look at the schedule of your thermostat and compare it to when you’re home to figure out if your thermostat is cranking away when no one’s there. How much money are you wasting by doing that?

It’s about boiling energy data down into information that can help people make decisions and live more sustainably.

For years, energy conservation efforts have been challenged by how best to incent consumers to modify behavior based on facts and information. How is Chai contributing to enticing consumers to voluntarily modify their energy behavior?

Instead of thinking about trying to modify a given customer’s behavior, habits, or lifestyle, we approach it from the other side. We look at how people live their lives and the problems they go through—whether it’s having to purchase a new fridge, not understanding their thermostat, or not knowing when to run the washing machine. We add a little bit more information, clarity, and understanding around how decisions will impact their bill today, in the future, or 10 years from now when they’re still paying off their solar loans. We’re not trying to modify people’s behavior. We’re just trying to help them make better decisions.   

            Instead of starting with the analytics, which is where a lot of energy monitoring and data science companies start, we start with the customer—the problems they face and the life that they want to live. We then track that back to the user experience and eventually to their habits and behaviors.

Chai reportedly was one of 10 select companies to participate last year in a Microsoft / American Family Insurance-funded Connected Home Accelerator. Share the nature and value of participating in that accelerator. Why was Chai the only company that American Family ultimately invested in?

 The Connected Home Accelerator was great for us. There were a lot of really exciting companies there.

There’s a lot of buzz around companies trying to control the devices in your home, whether it’s the thermostat, plugloads, or light bulbs. There are not a lot of people actually trying to understand the data flying off of these devices.

You can control your thermostat from your phone—but it also knows the temperature and the set point every couple of seconds, forever. The meter in your home knows the energy usage of your home, forever.

We’re one of very few companies actually trying to interpret and understand the data coming out of the home. It’s an unloved piece of the overhyped “Internet of Things.” There’s a ton of value here for customers.

Elaborate on the value of real-time data interpretation and display.

The value for customers is twofold.

First, they’re saving money and energy. That’s how they justify the purchase of Chai.

Second, they feel more connected to their home. They understand what’s going on. People spend upwards of a million dollars on their homes. But they really have no connection to what’s going on in their house.

Chai changes that. We tell them what’s going on and what’s going wrong.  We tell them when things need to be repaired, what’s on, and what’s off.

What Chai technology is now on the market?

We have two products today. One is Chai Energy. It’s a totally free mobile app that you can download in the iTunes App Store and see your energy use. We’ll start running a personal analysis of your house. We’ll tell you how many things you’re leaving on when you’re not at home. We’ll show you your baseload power. We’ll figure out if solar makes sense for you.

Then you can upgrade for $49 to Chai Pro. It’s the cheapest smart device on the market that I’ve ever seen.  It plugs into your internet and pulls down real-time data every couple of seconds from your smart electric meter.

With that data, we can do a lot. We can figure out when your appliances are on. We can look at your fridge’s efficiency and at your air conditioner’s schedule. We can look at when you’re running your washing machine. You can tag appliances around your home and actually figure out in real time how much each of those appliances is using and costing you. Check it out at chaienergy.com.

What are the public policies in California that either support or distract Chai Energy from getting to goal?

I’ve been tracking a couple of really exciting bills in California.

The first is AB 793. It allows products like Chai to be part of weatherization, which promotes rebates.

The second is AB 802, which allows utilities to take credit for behavioral energy efficiency. Up until today, a lot of the policy work has been around replacing this fridge with another fridge that’s scientifically proven to reduce energy usage. There’s no way that the customers get rebates, credit, or any sort of recognition if they just turn off the lights more often, or if they reprogram their thermostat. These kinds of behavioral energy efficiency go totally unrecognized. I think policymakers are starting to understand that, especially in the residential space, energy efficiency is so much more about how we use and program the devices around us and a little less about large capital investments in more efficient appliances.

Those two bills are very exciting. We’re watching them through every step of the process.

And outside of California?

A couple of other states are pushing open-data initiatives. Illinois is a huge one. New York and Massachusetts are thinking about it. We use customer data to help those customers save, so any opening of customer data is huge for us.

We’re looking at states like Florida and Georgia that have massive numbers of smart meters installed, but we just are not willing to share the data with their customers. We’re hoping they feel the pressure from other states who open their data.

Please share Chai Energy’s history and your experience.

The company is largely born out of two places.

One is the Caltech Solar Decathlon, where I worked with my CTO on building sustainable homes. We built one of the first smart, connected, sustainable homes. We built the first iPad app in the world that allows you to control your home. We saw that IoT had a huge opportunity to infiltrate homes. We also saw that sustainability had no place on people’s phones at the time.

The second place was Southern California Edison, where I worked with Evan Birenbaum, another co-founder and COO, on rolling out the smart electric grid—helping utilities reach their energy-efficiency and demand-response goals.

Utilities are horrible at engaging with their customers and getting their customers to buy into programs. That’s why we created Chai—to help promote utility energy-efficiency and demand-response programs, and to actually get people to participate in them.

You’re a Los Angeles-based company in an app technology world that, in the past, was always thought of as Silicon Valley-centric. What’s the promise of Los Angeles?

There are an incredible number of talented people coming out of the schools in Southern California. Our challenge is to snag them before they move up north.

We’re in Southern California because we have a compelling enough product and a compelling enough vision that we can snag people out of school or just out of a job. I think the talent in Southern California is as good as anywhere else in the state or in the country.

How many employees does Chai have, and from where have you drawn them?

We have about 10 full-time employees. They’ve all been pulled through the network. We have people from UCLA, USC, Caltech, Oberlin (which is my alma mater), and Occidental.

How would we know when the company is successful?

We’re hugely successful today, in the number of customers we’ve gotten over the past couple of months.

Real, true success for us looks like Chai Energy in millions of homes, collectively saving terawatts of energy

How is Chai financing the path to get there?

Today we’re venture-funded. We’ll most likely continue to be.

What does the device look like? Is it as neat as Nest?

No, but it’s one-fifth the price. It’s a cute little black box that sits by your router and gets hidden away. I know how cool and sexy Nest is. That’s something we’re thinking about, but we don’t have anything to announce today.

What’s the proof of concept? Who in the marketplace has subscribed or bought into this?

We’ve had tremendous traction from customers and users. We put together a couple key partnerships, as well.

Lastly, you were a VerdeXchange 2015 plenary panelist last January, where you introduced Chai Energy’s ambitious goals. You will be a part of VerdeXchange 2016 again this coming January. What might you be reporting?

Over the past year, we’ve shown that if you can make the data digestible and understandable for customers, you can get engagement that is off the charts.

It’s pretty incredible how a little bit of design and a lot of care around the product can change how customers interact with something. It’s about energy use, so I think we’re all going to benefit in the long run.

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"We’re one of very few companies actually trying to interpret and understand the data coming out of the home." -Cole Hershkowitz

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