| SAN FRANCISCO, April 22
SAN FRANCISCO, April 22 Tony Fadell, the
designer known as the godfather of Apple Inc's iPod, is
enlisting several of the country's largest power utilities to
get his power-saving creation, the "Nest" thermostat, into more
Nest Labs, the company he co-founded in 2010 with designers
and engineers from Silicon Valley firms like Apple and Google
Inc, is teaming up with six utilities to provide
incentives for using its thermostats. They include $100 rebates,
rewards for adopting energy-saving programs, even a free device
in some cases.
The U.S. utilities that have already rolled out programs, or
will begin to do so in coming weeks, include NRG Energy,
its subsidiaries Reliant and Green Mountain Energy, National
Grid, Austin Energy and Southern California Edison.
To fund those initiatives, Fadell is tapping into a pool of
money -- to the tune of about $9 billion -- that these and other
power utilities collectively set aside to promote energy
efficiency programs, particularly to avoid brownouts.
Brownouts -- where sudden spikes in electricity usage
disrupt the grid's power supply -- are a problem in many markets
and some of the projects envisioned to avoid it include rebates
for power-efficient appliances, financial incentives to curtail
electricity use during peak hours, and energy awareness
"It's a lot of money but we don't think it is being
effectively used," Fadell said in an interview. "We went after
exactly that money and wanted to redistribute it, so to speak,
to our customers."
The Nest thermostat -- a round, brushed-metal device with a
convex glass screen that displays temperature and changes hue to
match the color of the wall it attaches to -- tracks usage
behavior and uses that data to automatically set heating and
The energy-saving features of the device, one of which is
the thermostat turns down heating or cooling when no one is
present, were what prompted the utilities to underwrite the
incentive programs, Fadell said.
Managing the power load of the home is a big opportunity for
avoiding spikes in use during peak hours, David Crane, president
and CEO of NRG Energy, said in a statement.
Nest's deals with the utilities might help build a better
picture of demand for the startup's devices, which at around
$250 are on the pricey side. Fadell declined to provide sales
details or estimate how much of a boost in demand it hopes to
get from its deals with the utilities.
The company is "blowing through all of our forecasts,"
Fadell said without elaborating.
Nest's deals with utilities run the gamut. Customers of
SoCalEdison and Austin Energy who also own Nest thermostats can
sign up for a program called "Rush Hour Rewards", which provides
money or credits for using less power during peak load times.
Texan utility Reliant, on the other hand, kicked off a pilot
plan, bundling a free Nest thermostat with some of its
"The response has been off the charts," Fadell said. "The
conversion rate has been enormous. We were all staggered by the
And National Grid in Rhode Island and Massachusetts will be
providing a $100 online rebate to customers who buy the
thermostat, bringing the price down to about $150.
People earned $20 to $60 per season by signing up for the
'Rush Hour' program alone, Fadell said.
Nest -- which attracted funding from venture capital firms
including Kleiner Perkins, Lightspeed Venture Partners, and
Shasta Ventures -- now has 210 employees, up from 90 in 2011.
Its device is displayed today at over 3,000 locations, including
major home appliance retailers and Apple's retail store.