How Solstice and Bayou partnered to make signing-up for community solar 82% faster
Solstice needed a way to get accurate consumer utility data quickly for enrollment, at scale. With Bayou Energy’s instant utility data API, Solstice provides a frictionless sign-up experience for any American to access clean energy that’s 82% faster than alternatives.
❓Challenge
Solstice needed a way to get accurate consumer utility data quickly for enrollment, at scale.
✅ Solution
With Bayou Energy’s instant utility data API, Solstice provides a frictionless sign-up experience for any American to access clean energy that’s 82% faster than alternatives.
Clean energy for every community
Solstice is bringing affordable, clean energy to every household in America - today connecting more than 12,000 customers across the country to community solar, a more accessible way to go solar than installing panels on your own home.
While rooftop solar can generate massive long-term energy savings, most Americans can’t access it because they can’t afford the high upfront cost (often greater than $20,000), don’t have the FICO scores to finance the purchase, own shady or otherwise improper roofs for panels, or are renters so they don’t own a rooftop for solar. Community solar, on the other hand, allows households to reserve a share of clean energy at a nearby solar farm. There is no upfront cost to join, no installation on customers’ property, no need to own your home (renters can participate), and usually there are no FICO credit score requirements. Community solar, then, is a key piece of the puzzle for solving climate change because it provides Americans with a way to support clean energy and earn consistent savings on their utility bill through virtual access to a local solar farm without the barriers that have held most households back from going solar to date.
Utility data for community solar enrollment
When enrolling a new customer, Solstice looks at their utility bills to understand how much energy a customer has used historically and then sizes their solar subscription to match this energy usage. Before working with Bayou, Solstice worked with another provider to get customer utility bills during enrollment.
The experience for connecting customer utility accounts was poor, often requiring customers to wait a full minute to verify their utility credentials and then to wait again between 10 minutes to two weeks for Solstice to receive the utility bill data needed to complete a customer’s subscription. This was particularly problematic for any in-person enrollments conducted through direct sales channels, Solstice’s community engagement events, and online enrollments where usage was needed before the customer could complete enrollment. Due to these issues, In many markets Solstice had to fall back on asking the customer to upload a bill, resulting in frequent quality issues with the data provided that required Solstice to implement tedious manual quality control processes.
Solstice identified improving their customer enrollment experience and lowering the cost of customer acquisition as a key priority, especially as they prepared to dramatically scale their business after they were acquired by MyPower, the North American clean energy arm of Mitsui. Achieving this business outcome presented a key challenge - the lack of a solution in the market that could quickly provide high quality customer utility data and a great customer experience. Solving this internally would be a non-starter for Solstice, requiring them to increase their operational costs by building and maintaining their own in-house utility connections across utilities by hiring several full-time engineers, a dedicated product manager, and designer.
Built with Bayou
Solstice connected with a new startup called Bayou Energy who had built an instant utility data access API - one that authenticated customer utility accounts in 1 second, returned data in less than 60 seconds and offered a quick and easy process for their software engineering team to switch over from their existing service. Solstice jumped at the opportunity to become an early design partner for Bayou’s API and, after more than 6 months of full deployment, the results have been significant.
Looking forward
In addition to scaling up their existing customer enrollment experience powered by Bayou, Solstice and Bayou are also exploring other ways to use Bayou’s platform to enhance their business. Continuous access to a customer's utility data allows Solstice to ensure customer solar subscriptions always match 100% of their usage, maximizing their utility bill savings and fully offsetting their energy usage with clean energy. Continuous utility data access also allows Solstice to monitor a customer’s utility bills for community solar bill credits provided by the utility. This is key to providing a better billing experience that reduces customer churn and supports cost savings and time to cash.
Bayou is thrilled to partner with Solstice to power a truly great community solar experience that helps Solstice grow and furthers both companies' collective mission to solve climate change through clean energy.
Utility Data Hackathon Wrap up - December 2023
6 teams from around the world joined Bayou’s virtual hackathon to build new products on top of instant utility data. After just 24 hours of building ideas ranged from products advising on energy markets & home upgrades to tools inferring appliance information from energy usage.
Last week, six teams from around the world joined our virtual hackathon to build new products on top of instant utility data, provided by Bayou. After just 24 hours of building we had some very cool ideas ranging from products advising on energy markets and home upgrades to tools looking to infer appliance information from energy usage.
A big thank you to Ben Eidelson and Stepchange for co-hosting, Dasha Cherepennikova, Dhanur Grandhi, Ross Gruber, Shawn Xu and Yin Liu for judging the final demos, and to Ari Steinberg, Arthur Shwab, Anay Shah, Nathan Eidelson, Ben Getson and Luke Squire for mentoring teams!
Read on to see what was built! Watch the hackathon demos here 👇
Submissions
Grid Link - Energy Markets robo advisor (🥇 1st Place and 🎨 Most Creative)
Team: Lyon Lay and Ross Carvalho
Watch Grid Link’s demo here 👇 | Slides
Monetizing devices in energy markets is hard. To get paid for market participation consumers and businesses must navigate challenges such as disparate markets (utility demand response programs and wholesale markets in each region of the US) in addition to location and availability of the device itself.
To cut through this complexity, Grid Link created a chatbot that uses OpenAI’s GPT-4 and Bayou’s API to answer the question “How can I make money from energy programs? I live in San Francisco and have a Tesla Powerwall battery and Nest thermostat.”
The chatbot first recommended Pacific Gas and Electric’s Emergency Load Reduction Program (ELRP) , a form of demand response which compensates consumers $2 for every kilowatt hour of energy reduced during a demand response event. Then, based on the consumer’s utility data, they were given an estimated earning opportunity of $439.40 for market participation from May to October.
Team Energy Insights - Automatically detecting energy appliances and usage patterns to identify opportunities for electrification and cost savings. (🥈2nd Place)
Team: Ben Jedlovec and Sam Kortchmar
Watch Team Energy Insights’s demo here 👇| Slides
While #ElectrifyEverything is a common mantra within the climate community, stakeholders such as utilities, electricians, homeowners and machine manufacturers need to understand which machines within households and businesses need electrification.
Enter Team Energy Insights who created a solution to leverage utility data to automatically detect home appliances and usage patterns to identify opportunities for electrification and savings. For the hackathon they created powerful data visualizations of 15 minute energy usage interval data to make it easy to look for energy signatures in interval gas and electricity usage.
Trends detected included smart thermostats kicking on heat pumps, solar panel production during daytime and level two electric vehicle charging.
In the demo, 15 minute interval data from Pacific Gas and Electric in San Francisco also specifically called out another instance of level two EV charging and a reduction in energy usage on 4/20/2023. Based on the data the demo recommended an EV electrician to improve the charging output which had degraded and offered an easy way to get solar panels with assistance from EnergySage. Check out the live demo yourself here.
Team Join Install - Enabling residential energy improvement projects ( 🥉3rd Place)
Team: Erick Salvatierra, Alexandre Toudret, Nick Kelly, Richard Cole, Mike Cozart, Brice Hutchings and Jordan Bain
Watch Team Join Install’s demo here 👇
The average US house is 47 years old representing a significant opportunity for energy efficiency upgrades. Although the home upgrade value proposition makes sense on paper, homeowners face significant challenges in managing the upgrade process. From challenges managing contractors to upgrade financing and properly sequencing upgrades, there exists an opportunity to provide a great experience around energy upgrades for homeowners. INSTALL is the mobile app that links owners and renters to HVAC and Energy Efficiency pros for instant energy profiles, connecting auditors, and delivering real-time renovation benefits.
For the hackathon, Team Install showed off a slick command line interface which asked a homeowner several basic questions such as their zip code, home square footage, who their electric and gas utility was, then finally to authenticate their utility account.
The demo then shared a Zydeco music playlist for enjoyment while analyzing the homeowner’s utility data and recommended home upgrades that would result in $417.72 and 7033.89 lbs of CO2 emissions yearly including insulation upgrades, sealing air leaks, installing energy efficient windows and a programmable thermostat.
In the future, this application could be adapted to show a payback cycle for the recommended upgrades backed by a more robust building efficiency model that incorporates inputs like current household windows, roof age or how large the building envelope is.
Green Pulse - Unlock your energy consumption carbon footprint.
Team: Laura Xu, Ashley Smith, Stephen Suffian, Luis Barrueco and Bastian Gerstner
For individuals there’s very little actionable help for reducing carbon emissions in their personal lives. To kick off this journey, Green Pulse helps consumers understand their carbon emissions from home energy usage and builds a plan to make acting on this data easy.
Team Green Pulse was a global team featuring members from Argentina, Taiwan, United Kingdom and the USA. First they created a workflow for consumers to share their email, utility and to authenticate their utility account.
After authentication, the energy consumption data was received at a webhook endpoint and paired with electric grid carbon intensity data from the Energy Information Administration for visualization in a next.JS dashboard.
The dashboard features included showing users daily energy usage and emissions from the last day, notes to drive action as well as a leaderboard for gamification amongst peers. These peer groups could be friends and family, neighbors or even co-workers within a company sustainability action plan.
In the future this dashboard could provide recommendations to help users climb the leaderboard 💪 or partner with local vendors for rewards like free coffee for motivating user action.
Arken - Optimize solar subscriptions with ongoing energy analytics
Team: Clara Zou, Zephyr Headley, Omar Ali and Akhil Gupta
Watch Arken’s demo here 👇
Community solar is a subscription for Americans who can’t put solar on their roof offering 5-30% utility bill savings without any upfront costs or hardware installation commitment. Often these subscriptions are sized manually or incorrectly resulting in painful operations work, a poor customer experience and lost savings for customers.
Arken used Bayou’s instant utility data API and AI to understand a community solar subscriber’s energy usage in kWh and automate subscription sizing. Overtime as a consumer’s energy usage changes, Arken would automatically upgrade the subscription size to ensure maximum savings from solar energy.
With more time, Team Arken would have liked to use the customer’s physical address to verify their eligibility for a specific solar farm and build out a more robust workflow for consumers to subscribe to a solar farm. In general Arken is B2B working to serve community solar companies who have dedicated teams manually reading utility bills and sizing consumer solar subscriptions.
Team Toronto - Making energy usage within buildings smarter
Team: Jennifer Turliuk and Mike Rose
Watch Team Toronto’s demo here 👇
Optimizing building energy use can significantly reduce a building’s utility bills and carbon emissions. Team Toronto showed us a demo that surfaced energy data for visualization and painted the picture for device control to unlock those energy opportunities. In their proof of concept household load data was disaggregated without any additional hardware (e.g. smart panel) and with minimal user input.
This enables households to change behavior of when/how they use appliances and prioritize which appliances should be upgraded. Through their energy efficiency dashboard, they provided users with a quick analysis of their energy usage patterns and offered recommendations for improving efficiency. The dashboard utilized Bayou API data for utility usage and could integrate with other complimentary APIs and hardware for enhanced insights.
Bayou launch release notes
Bayou launches to provide developers instant utility data for 14 utilities. The API takes minutes to integrate, consumers authenticate their utility accounts with one-click, and developers get access to utility account, bill, and usage interval data in 60 seconds or less.
Bayou enables software developers to get their customer’s utility data instantly. The API takes minutes to integrate, consumers authenticate their utility accounts with one-click, and developers get access to utility account, bill, and usage interval data in 60 seconds or less.
Bayou is working on significant updates to our product ahead of a public product launch in January 2024. These include:
14 instant utilities: Instant data from 14 utilities today and 90% of the US population by December 2024. Bayou can add new instant utilities in as little as one week.
Fast integration: Be live with customer utility data in 10 minutes with a re-designed dashboard, QuickStart guide and new dashboard webhook management.
One-click for customers: A re-designed form verifies credentials within 3 seconds or less and supports multi-factor authentication for instant utilities.
Fast integration
Re-designed dashboard
Dashboard Home (in development): View demo data or connect your own utility account, then invite co-workers or jump straight into the QuickStart guide.
QuickStart Guide
Enhanced comments for clarity with links to relevant documentation
Can be downloaded and run 100% within your terminal-no need to setup webhook endpoint for local testing. Just create a Bayou account and add your API key.
Python file available now, will be self-service in dashboard in Python, Ruby, JavaScript, Typescript, C#, Java
Dashboard webhook management: view and resend any webhook within Bayou’s dashboard
Re-designed Customers section of dashboard (in development): enables you to view key customer data
Updates to webhooks
The bills_ready and intervals_ready webhook events inform users when data discovery has been completed. The logic that triggers the webhooks has been updated to support edge cases and the JSON objects for both webhooks now categorizes discovered data.
New customer_must_reauthenticate webhook event informs users that a specific customer must share their credentials again
One-click for customers
Re-designed customer form (in development): will be shared when available
Multi-factor authentication (MFA) is now supported for all instant utilities
Bayou Energy July 2023 product release
Bayou Energy’s July 2023 product release includes more utility support and instant utility data access, a new customer hierarchy and enhanced developer experience through new documentation, webhooks and data fields.
Overview
New home for documentation: Now Bayou’s API reference, product documentation and support are hosted in one place, https://docs.bayou.energy/.
Instant data: Instant access to customer utility data within one minute or less for 12 utilities.
New utility support: With the addition of PNM (Public Service Company of New Mexico) and El Paso Electric, Bayou Energy now supports 36 utilities.
Customer hierarchy: Bayou's customer records now accommodate multiple utility account numbers and meters linked to a single set of utility login credentials, ensuring comprehensive access to utility data from all customer utility accounts and meters.
Developer experience: Developers can now easily and programmatically determine customer onboarding and bill status through a collection of new data fields and webhooks.
New home for documentation
Now Bayou’s API reference, product documentation and support are hosted in one place, https://docs.bayou.energy/.
A few pages of note include:
Instant data
Instant data, defined as receiving data from a newly onboarded Bayou customer within one minute or less, is now available for 12 utilities:
Ameren
ConEd
ComEd
Entergy
Eversource
Jersey Central Power and Light
National Grid Massachusetts
National Grid New York
Pacific Gas and Electric
Puget Sound Energy
Seattle City Light
Xcel Energy
Instant data is revolutionizing customer acquisition for clean energy companies, offering an unprecedented level of convenience to customers. With instant access to customer utility data companies can seamlessly present clean energy offers to customers in real-time, all with just one click. This groundbreaking approach not only reduces customer acquisition costs but also drastically improves conversion rates throughout the customer acquisition funnel, providing a consumer-grade experience for buying clean energy akin to Venmo's instant account authentication.
New utility support
With the addition of PNM and El Paso Electric, Bayou Energy is now supporting 36 utilities.
Customer hierarchy
Bayou customer records now support multiple utility account numbers and meters linked to a single set of utility login credentials. Data from all customer utility account numbers and meters is now parsed and made available to Bayou users.
From residential customers owning multiple homes to commercial customers managing their entire business’s energy footprint, customers often have multiple to dozens of utility account numbers and meters behind the same set of utility login credentials. Understanding this complex hierarchy is crucial for clean energy companies to deploy tailored solutions effectively. We recognize this challenge and have designed our customer object to provide a comprehensive view of the entire customer hierarchy, ensuring access to the precise data needed to drive successful projects. View the new data model in Bayou’s API reference here.
Developer experience
Companies and their developers require an organized method to track individual customers who share their utility credentials and gain a comprehensive understanding of the customer’s available data. To address this need, Bayou is introducing new data fields and webhooks that provide a systematic framework for tracking customer status and ensure a transparent view of data availability for each customer.
New data fields:
bill_status: All bill objects now have one of the below statuses. (Learn more about locked and unlocked bills here)
“Unlocked”: bill data that Bayou has collected for a customer and that the company has chosen to receive
“Locked”: bill data that Bayou has collected for a customer but that the company has not yet chosen to receive
“Unparsed”: Bills that have been fetched from the customer’s utility portal but not yet parsed
“Not supported”: bills uploaded from a utility or in a format that aren’t yet support
utility_data_velocity: How quickly to expect data will be available for a given customer or utility bill object, used in both webhooks outlined below. The valid options are:
Instant
2 hours
24 hours
48 hours
New webhooks:
customer_has_filled_credentials: This webhook is sent when a customer successfully shares their utility credentials. The webhook contains the customer’s unique identifier(s), the customer’s utility and the current data velocity for that utility. Sample webhook JSON:
{ "event": "customer_has_filled_credentials", "customer_id": 12345, "customer_external_id": "MSCOTT123", "utility": "con_edison", "utility_data_velocity": "24 hours" "has_filled_credentials": true, "has_filled_credentials_on": "2022-07-01T14:05:00Z" }
new_bill_status_unparsed: When bill data is not available instantly this webhook is sent to allow developers to determine bill status. The webhook contains the customer’s unique identifier(s), the customer’s utility and the expected data velocity for the bill object. Sample webhook JSON:
{ "event": "new_unparsed_bill", "external_id": "BILL_123", "id": 12345, "status": "unparsed", "customer_id": 12345, "customer_external_id": "MSCOTT123", "utility": "con_edison", "utility_data_velocity": "24 hours", "file_url": "https://private.bayou.energy/bills/12345.pdf?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=XYZ&X-Amz-Date=20220701T000000Z&X-Amz-Expires=1800&X-Amz-Signature=ABCEF0123456&X-Amz-SignedHeaders=host" }
Bayou Energy announces New Mexico utility support ahead of state community solar launch
Bayou Energy’s Data product enables companies to give their customers a one-click clean energy experience across many utilities including PNM, El Paso Electric and Xcel Energy.
In preparation for New Mexico’s community solar launch, Bayou Energy is excited to announce instant utility data access for PNM (Public Service Company of New Mexico) and El Paso Electric customers in addition to existing support for Xcel Energy, the parent company for the state’s Southwestern Public Service Company.
With the imminent launch of New Mexico’s community solar program, community solar project developers and subscriber management organizations will be preparing for enrollment, billing and support of thousands of customers across New Mexico’s three electric utilities. These customer operations require accessing end customer utility data through a collection of methods that result in a difficult tradeoff between customer experience and internal effort. With Bayou Energy’s Data product now supporting New Mexico’s electric utilities, community solar organizations can greatly simplify PNM, El Paso Electric and Xcel Energy customer utility data access and their market entry with just a few clicks or lines of code.
For community solar companies, customer utility data access normally involves some combination of collecting customer utility bills, requesting data from utilities or building software to collect end customer permission, utility credentials and fetching their utility data from the utility on their behalf. Requesting customer utility bills requires customers to log into their utility portal to download and share bill(s) that must then either be manually parsed or run through a coded utility bill scraper that must be newly developed and maintained for each utility. Requesting data from utilities often requires customers to fill out lengthy forms and then returns customer utility data one to 14 weeks later in a dirty format that requires manual effort or code to parse. Building software to collect customer permission, credentials and fetching their utility data is a time intensive engineering effort that must be repeated for each utility and kept up to date.
Companies new to Bayou Energy can create an account online and get started by onboarding up to 10 customers free. For existing Bayou customers, PNM and El Paso Electric have been added to the product’s existing utility support.
How to plug your product into the grid
⚡️ A simple overview of grid participation, better enabling you to convert your clean energy idea into a product that helps customers save money and eliminate their carbon emissions from electricity.
Estimated reading time: 10 minutes
Last edited: 10/18/2022
Overview
What you’ll get from reading this post:
⚡️ A simple overview of grid participation, better enabling you to convert your clean energy idea into a product that helps customers save money and eliminate their carbon emissions from electricity.
When talking to clean energy entrepreneurs that are new to the industry, a common story resonates. In the early stages of working on a clean energy idea, entrepreneurs will:
Perform discovery
Collect prospective customers who resonate with their problem statement
Validate their product directly with these discovery partners
In addition to the typical challenges of building a company from nothing, there is the added layer of figuring out how to plug a product idea into the grid to serve these prospective customers. The grid is intimidating, even understanding the fundamentals can be challenging. Best case, they can easily find people to answer their questions and help make their product idea a reality. Worst case, they spend countless hours, often on nights and weekends, reading through lengthy utility and wholesale market documents trying to determine out how to build their product. Some will persevere and eventually succeed, most will delay their company progress or potentially move onto another idea.
The barriers to building a clean energy company are significantly higher than they should be, especially if we expect to deliver abundant clean energy and #electrifyeverything on a timeline that climate science demands.
Hitting a roadblock with our first clean energy idea.
At Bayou Energy, we encountered this same problem with our first clean energy idea, “Microsoft office for clean energy”, a service for enterprises to subscribe to 100% clean energy in a few clicks. Unlike Google who has a 40 person energy team, most enterprises with public climate goals have small teams tasked with buying clean energy across their corporate footprint. Existing solutions were great building blocks, not solutions that the mainstream market would readily adopt in their current form.
After speaking to ~30 enterprises, we were excited by validating the problem and as people new to the electricity industry, we were equally intimidated by the challenge of delivering the product. In this article we’ll use one of our discovery partners as an example, let’s call them Boxbox drive for discretion, whose core business is providing a cloud storage service to enterprise and consumer customers. They fit the description above and a significant portion of their carbon footprint comes from their six data centers, spread across at least four states: California, Texas, Virginia and New York. We were having difficulty figuring out how to source clean energy as a startup in one of those states, much less all four. Eventually we figured how to deliver the product, but not before at least one year of learning and pivoting to another idea.
Grid Participation Framework
There are 1000’s of clean energy companies that need to be built and here we’ll give you a framework to help you build yours.
👇 A few notes:
-If you disagree with or would like to add content to this framework, please do speak up, the whole point is to help each other!-The actions in this table are framed in terms of how they can financially benefit customers.
-This is an overview, we can dive deeper on parts of the framework in future posts.
Overview
In regulated markets, customers can only buy and sell electricity with their utility so our goal is to save customers money on their utility bill.
In deregulated markets, customers may also have the option to choose who to buy their electricity supply from and sell electricity into a wholesale marketplace.
We’ll cover both market types in more detail below.
Actions
Buy clean electricity: Regardless of where customers live there’s a way to purchase clean energy. While it may be more work, it will usually be cheaper than existing carbon intensive electricity.
Sell clean electricity: From rooftop solar to large electricity generation, there are ways to generate clean electricity and receive compensation for selling it.
Save money by changing usage: Reduce customer electricity cost by:
Not using large amounts of electricity all at once
Shifting electricity usage to times of day when it’s cheaper
Get paid to change usage: When electricity demand is the highest customers can get paid to use less than they normally would.
Use less energy: Government and utility programs can enable customers to use less electricity by helping fund the purchase of energy efficient products.
Markets
There are two types of markets:
Customers can only buy and sell electricity with their utility in a regulated market
Customers may have the option to choose who to buy their electricity from and sell electricity into a marketplace in a deregulated market
Regulated Markets
⚡️ Because customers can only buy and sell electricity with their utility in a regulated market, in these markets the goal is to save customers money on their utility bill.
There are two main components of an electricity bill are:
Electricity delivery: getting electricity from where it’s produced to where it’s used
Electricity supply: The cost of generating electricity
On average, delivery is 46% of the cost and supply is 54%.
Utilities use meters to measure customer electricity usage and translate that usage into bill charges according to their tariffs. In addition to tariffs, utilities offer programs for compensating different actions like demand response. One important lesson that we’ll keep coming back to is that the utility acts as the source of truth for a customer’s electricity usage, cost and how those costs are determined. As an example, regardless of what any non-utility electricity meter shows, the customer’s true usage will be what’s reflected in their utility meter data shown on their utility bill.
Understanding a customer’s utility bill is the first step to saving them money. This can be done by asking a customer to share copies of their recent utility bills or by using a utility data sharing service like Bayou Energy. The bill will contain the customer’s electricity usage, the name of their utility tariff, a breakdown of their electricity charges and information about any programs they may be enrolled in. The tariff and any utility programs will likely be mentioned on their bill. Detailed information on the tariff or program should be available on the utility’s website. Click here and scroll to page 587 to view the tariff details for Con Edison’s EL1 Residential or Religious tariff.
To better understand this concept, you can use the below tool to view your utility information.
⚡ In summary, to save a customer money on their utility bill:
1. Understand their electricity usage, cost, current tariff and programs they currently participate in
2. Based on step one, figure out what actions you’ll be taking to save them money
3. Execute and measure the results monthly
Deregulated Markets
In addition to buying and selling electricity with their utility, in deregulated markets customers may also have the ability to:
Choose who to buy their electricity supply from
Sell electricity into a wholesale marketplace
Choose who to buy their electricity from
In deregulated markets where customers can choose who to buy their electricity supply from, called retail electricity choice, their default electricity supply retailer will be the same utility selling them electricity delivery. The difference in these markets is that customers can choose to buy their electricity supply from a non-utility company, often called a retail electricity provider or REP for short.
Regardless of their chosen electricity supplier, the customer will always receive a utility bill for electricity delivery. If the customer is buying their electricity supply from their utility, the supply charges will also be on that bill, resulting in their bill looking identical to the utility bill of a customer in a regulated market.
Customers choosing to purchase electricity supply from a retail electricity provider will either:
Receive two bills:
One bill from their utility for delivery
A separate bill for supply directly from their retail electricity provider
Receive one bill: Retail electricity providers may choose to bundle their supply charges with the utility delivery charges on the customer’s utility bill. In this case customers will receive one consolidated bill from their utility for delivery that also has the supply charges from the retail electricity provider
Sell electricity into a wholesale marketplace
In deregulated markets where customers can sell electricity into a marketplace, there are two main ways they can get paid to sell electricity:
Energy Markets:
In these deregulated markets, both utilities and non-utility companies generate and sell electricity into the wholesale market. Customers could become one of these generators or work with a 3rd party to sell electricity into energy markets.
The electricity generated and sold into the wholesale market is purchased by retailers. These retailers include retail electricity providers and utilities.
In Energy Markets 95% of electricity is sold one day ahead of time and the final 5% is sold in real-time.
Capacity Markets:
Retailers must buy the quantity of electricity needed by their customers plus a wholesale market required safety factor of additional electricity in case of an extreme grid event (think hot summer days or extreme winter storms).
Customers can commit to selling their electricity or to reducing their usage in order to provide this safety factor electricity. These commitments are usually binding and customers who commit but don’t deliver that electricity will be punished or fined by the market. Traditionally these were dirty coal or natural gas “peaker plants” but are increasingly being served by flexible electricity usage via demand response.
Capacity markets are run ahead of time at a frequency determined by the market operator
All direct wholesale market participants must register with the market and comply with their other requirements. In many cases it doesn’t make for customers to participate directly in wholesale markets, which presents an opportunity for companies to participate in energy or capacity markets on their behalf.
Not all deregulated markets are the same. Examples include:
Texas not having a capacity market. This means that customers instead can sell their electricity in the Texas wholesale energy market. During extreme grid events in Texas, electricity prices in the energy market are extremely high, so customers could sell their electricity or reduce their usage at these peak times and be well compensated.
California has a wholesale market which allows non-utility generators to sell their electricity but customers are not allowed to choose who to buy their electricity supply from. Instead customers must purchase both their electricity delivery and supply from their utility. The main exception to this rule is called community choice aggregation. Communities that have aggregated have elected a non-utility company to provide them with their electricity supply instead of the utility.
⚡ In summary, in deregulated markets customers may have the option to:
1. Sell clean energy generated into a wholesale market
2. Sell their commitment to change their electricity usage a certain amount (example: 10 kilowatts for 4 hours or 40 kWh’s total)
3. Choose who to buy their electricity from
Delivering our first idea to Boxbox drive
Applying this framework, we can figure out how to provide Boxbox drive with a 100% clean energy subscription. Our steps are:
Know how much energy to buy
Buy clean energy
Based on clean energy purchased, determine what subscription amount or model you can offer a customer
Know how much energy to buy
We now know that the electric utility meter is the source of truth for how much electricity a customer uses and that usage is shown on their utility bill. Typically clean energy providers will use ~12 months of a customer’s historical energy usage as an input to their service.
Buying clean energy
Starting from easiest to most difficult:
New York: Boxbox drive’s needs can be met with a combination of community solar and buying electricity from a retail electricity supplier (or if we want to get wild, sign up to be an electricity retailer and buy electricity from the wholesale energy market in NY state.)
Texas and Virginia: Like New York, Texas and Virginia also let customers choose who to buy their electricity from so we can find a retail electricity provider willing to sell us 100% clean energy.
California: While community solar is coming to California, today there is no option that isn’t either more expensive, more work or has a questionable net positive climate impact.
(Likely) More expensive:
Community Choice Aggregators: The energy provided from community choice aggregators can be 100% clean in some cases. If the data center is located within one of these areas, that may solve the need.
Purchase clean energy from the utility: Utilities normally have clean energy plans which are more expensive than their base electricity rates.
More work
Onsite solar: On their own or with the help of another company, Boxbox drive could install solar at their data centers. Similar to rooftop solar, an onsite solar farm could match the data center’s electricity needs.
Power Purchase Agreement: a company (or Boxbox drive) could enter into a Power Purchase Agreement to buy electricity directly from a solar or wind farm. This can be done directly with the electricity producer or using 3rd party power purchase agreement tools.
Questionable Climate Impact: Unbundled renewable energy certificates (REC’s) on paper result in net clean energy, but are widely considered to have a questionable impact.
Determine subscription amount:
Now that we know how much and how to purchase the clean energy a customer needs, a company can determine a subscription model and price. While this is still work, it is well understood and common to any industry.
Let’s Connect 👋
Subscribe, schedule time to talk, email us at hello@bayou.energy or comment on this post if you:
Would like to talk more about your existing clean energy product or idea
Are curious about a specific item that is or isn’t mentioned here
Have feedback on how to improve these posts or would like to correct anything in this post