Nest lab presentation_2013_03_06

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  • Given the obvious demand for energy savings and specifically smart thermostats, Nest will need to focus on how best to meet that rising customer demand. Studying customer preferences to determine how to invest research and development funds is critical for future success.Tugrul U. Daim, Ibrahim Iskin, (2010),"Smart thermostats: are we ready?", International Journal of EnergySector Management, Vol. 4 Iss: 2 pp. 146 - 151
  • GE Nucleus Home Manager – Requires a smart meter to measure the energy consumption of the home – IEE (Institute for Electric Efficiency) estimates that 1/3 of residential homes currently have smart meters in a 2012 (http://www.edisonfoundation.net/iee/Documents/IEE_SmartMeterRollouts_0512.pdf)
  • Given that the majority of a typical household’s energy bill (almost 50%) comes from heating and cooling the house, it makes sense to reduce the cost associated with that function. Although http://www.energystar.gov/ia/partners/prod_development/revisions/downloads/thermostats/Summary.pdf
  • Calculations base on EIA data from 2005:Table SH9. “Average Expenditures for Space Heating by Main Space Heating Fuel Used, 2005 Dollars per Household.” Used natural gas figures. The average expenditure of natural gas for heating per U.S. household is $544 per year. Table AC7. “Average Expenditures for Air-Conditioning by Equipment Type, 2005 Dollars per Household.” Used electricity figures. The average expenditure of electricityfor cooling per U.S. household is $335 per year. Table SH7. “Average Consumption for Space Heating by Main Space Heating Fuel Used, 2005 Physical Units per Household.” Used natural gas figures. The average U.S. household consumes 49,000 cubic feet of natural gas per year. Table AC5. “Average Consumption for Air-Conditioning by Equipment Type, 2005 kWh per Household.” Used central A.C. systems figures. The average U.S. household consumes 3,475 kWh of electricity per year.
  • Orange Line – Industry Sales Trend “Sales of programmable thermostats have doubles over the last 10 years.3”Green Line – Nest Sales TrendStarted selling October 2011 but had some supply chain issues and couldn’t meet initial demand “Sold at least 10,000 by April 5th, 20121”Since releasing the first Nest last October, sales have been “in the mid-hundreds of thousands” of units, according to the company by October 2012.2
  • Blue Line – 91 million which is U.S. Market Saturation
  • Product Standards: Working with ENERGY STAR® on “Program Requirements for Residential Climate Controls - Partner Commitments” and maintain a system to comply with these standards once industry standards are defined.Work with policy makers to develop standards that would increase demand for the Nest Learning Thermostat.Private Partnerships:Establish a system to maintain partnerships with utility companies (electric and gas) in major U.S. metropolitan markets and government to provide Nest, installation, and servicing to consumers in exchange for service contracts. i.e. Nest partnership with Reliant, a Texas-based retail energy provider to offer a Nest thermostat to customers who sign on for a two-year contract. Reliant serves 1.5 million retail customers across Texas, Connecticut, Delaware, the District of Columbia, Illinois, Maryland, Massachusetts, New Jersey and Pennsylvania. http://www.engadget.com/2012/06/25/nest-partners-with-texas-utility-offers-intelligent-thermostat/ Government Programs: Lobby strategically on the state (state legislatures, state EPAs on greenhouse gas reduction, state energy departments, state commerce departments) and federal level (Congress, DOE, department of commerce).
  • At 20% energy savings, based on EIA monthly average a home consumes 940kWh/month based on this the nest saves about 188kWh/month or about 2.16MWh/year/household this multiplied by the estimated number of nests sold (500,000) leads to an annual energy reduction of 1.08TWh/year from nest alone. This value times the EPA estimated metric ton CO2/kWh leads to an overall reduction of 744,624.8 metric tons CO2Even with current market value in california selling the CO2 trades at 10$
  • ----- Meeting Notes (12/3/12 09:47) -----Cost of User Time:-assume user makes 75K/yr; workyear 2080 hrs-roughly $36/hr-assume user spends five min weekly programming a simple programmable thermostat (4 hrs/year)-Nest automatically does this saving user money based on their value of time
  • Nest lab presentation_2013_03_06

    1. 1. Nest Labs Innovation for Energy and the EnvironmentMario Avila, Jeffrey Quackenbush, Carlos Saborio Villalta, and Christopher Yoder S
    2. 2. Executive Summary S Nest Labs S Smart Thermostat S Revolutionizing the heating and cooling industry S 42% of consumer home energy expenditures attributed to heating and cooling (EIA) or roughly $1,000 a year S Large thermostat market and an even larger home appliances market S Savings of $201 per year
    3. 3. IntroductionS 1st and 2nd generation Nest learning thermostatsS Constant connection via a smart phone, tablet, and InternetS Sold at Lowe’s, Best Buy, Amazon, and the Apple StoreS 130 employeesS Based in Palo Alto, CAS Kleiner Perkins, Google Ventures, and 5 other well established venture capitals
    4. 4. Current and Future Demand/Market Typical Energy Consumption of US Households $85 $257 Heating and Cooling Water Heating $269 $1,056 Appliances Lighting Electronics Other $287 $317
    5. 5. Nest Learning ThermostatS The results of a October 2012 report found that homeowners using Nest’s Auto-Schedule and Auto-Away features saved 20.1%.4S Works with 95 percent of all 24V systems including gas, electric, forced air, heat pump, radiant, hot water, solar, and geothermal
    6. 6. Rich Patent PortfolioUser Friendly Interface Thermostat Graphical Thermostat User for Control Unit - US User Interface - US Interface - US 8,195,313 2012/0203379 A1 2012/0131504 A1 B1 Thermostat With Self- System Methods forConfiguring Connections Adaptive Power Stealing Updating Climate Control to Facilitate Do-It- Thermostat – Under Algorithms – UnderYourself Installation - US Review Review 2012/0248211 A1
    7. 7. Tony Chip Leadership MattYoky Erik John
    8. 8. Market Demand Customer Preferences 17% For Smart Thermostats 23% Cost Savings13% Interface Ease of Use Connectivity 7% 20% Reliability Features 15% 5% Tugrul U. Daim, Ibrahim Iskin, (2010),"Smart thermostats: are we ready?", International Journal of Energy Sector Management, Vol. 4 Iss: 2 pp. 146 - 151
    9. 9. Thermostat Competition Nest Competitors $350 $300 $250 $200Cost $150 $100 $50 $- Honeywell Heat Only Honeywell Programmable Nest Ecobee Smart Thermostat Honeywell Prestige Thermostat Thermostat Thermostats
    10. 10. Other Competitors S Pulls information from smart meters and certain GE products S Doesn’t allow customers the ability to control units remotely only provides informationS Tado is currently only sold in GermanyS Free hardware but $126 annual subscription fee
    11. 11. Current and Future Demand/MarketS 91 million households have thermostats with 25 million smart thermostat.3S $200 X 66 million = $13.2 billion 91 million 25 million
    12. 12. Economic Analysis Nest Average GHG Emissions Savings by Region 0.9 (U.S.) 0.8 0.8 0.8 0.7 0.6 Tons of GHGs 0.6 0.5 0.4 0.4 0.40.4 Heating (Natural Gas) 0.3 0.3 Cooling (Electricity) 0.3 0.2 0.1 0.0 Northeast Midwest South WestData: EIA, 2005. Geographic Region
    13. 13. Economic Analysis Nest Average Energy Bill Savings by Region (U.S.) $250 $213 $200 $169 $172 $150Dollars $118 $100 $50 $- Northeast Midwest South West Data: EIA, 2005. Geographic Region
    14. 14. Economic Analysis $181 $20 $201Energy 1.1 Ton TotalSavings GHGs Savings
    15. 15. Learning and Diffusion Smart Thermostat Market 30,000,000 25,000,000Number of Smart Thermostats 20,000,000 15,000,000 Nest Industry 10,000,000 5,000,000 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year
    16. 16. Learning and Diffusion Smart Thermostat Market 100,000,000 90,000,000 80,000,000Number of Smart Thermostats 70,000,000 60,000,000 50,000,000 Nest Industry 40,000,000 Market Saturation 30,000,000 20,000,000 10,000,000 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year
    17. 17. Environmental Management Systems GovernmentProduct Standards Private Partnerships Programs
    18. 18. Private PartnershipsS Energy providers S Retail stores S HVAC professionals
    19. 19. EMS Framework Research Assess Define Strategy Strategy & TargetsRelationship LobbyingManagement Recordkeeping Communication
    20. 20. Life Cycle AssessmentS Manufacturing – materials, processes, location, regulationsS Transportation – Pacific Ocean, North AmericaS Energy Savings – energy bill, emissions, geographyS Disposal – silicon, IC’s, no collection program, e-wasteS Minimal impact on water
    21. 21. Externality AnalysisS In using the Nest, customers are reducing GHG’s and other associated emissions with power plants based on geographic locationS CO2 currently valued at $21/metric tonS Nest alone accounts for reduction of 744,624.8 metric tons CO2/yearS Net savings of $15.6M / year in CO2 costs
    22. 22. Nest Learning Thermostat
    23. 23. Sensitivity Analysis Nest Smart Thermostat Tornado Plot Energy SavedElectricity Price Fuel Cost Discount Rate Capital Cost -$500.00 $0.00 $500.00 $1,000.00 $1,500.00 $2,000.00
    24. 24. Sensitivity Analysis $1,200.00Net Present Value of Purchase $1,000.00 Discount $800.00 Rate Capital $600.00 Cost Fuel Cost $400.00 $200.00 Electricity Cost $0.00 0% 50% 100% 150% 200%
    25. 25. If you don’t trust us, ask them!
    26. 26. 1. http://gigaom.com/cleantech/nest-makes-its-smart-thermostat-er-smarter/2. http://bits.blogs.nytimes.com/2012/10/02/nest-second-generation/3. http://www.energystar.gov/ia/partners/prod_development/revisions/downloads /thermostats/Summary.pdf4. http://downloads.nest.com/summer_2012_savings_white_paper.pdf

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