Why Google's Home-Energy Product PowerMeter Failed

Last Updated Jun 24, 2011 7:04 PM EDT

After failing to attract enough users, Google announced Friday that it would retire PowerMeter, a free web tool that allowed folks to track their home's energy use. Even though the home-energy monitoring market was a crowded place when Google launched PowerMeter two years ago, many saw the company's entrance as a potential game-changer. At the very least, folks expected Google (GOOG) would be a major player in the industry. Turns out, Google fell far short of that goal.

It's not that Google PowerMeter was a bad idea. And it's not as if insufficient revenues are the reason behind Google's decision to end PowerMeter. The project created by Google.org, the company's philanthropic arm, never even intended on turning a profit. Instead, the altruistic aim was to help reduce greenhouse gas emissions and save folks money by giving them real-time access to home energy information.

Google PowerMeter suffered from two problems. For one, the home-energy management market is overflowing with companies that have developed loads of gadgets, web tools and software all designed to save consumers money. Problem is consumers don't know the industry even exists.

As I've said before, utilities, which have incredible access and power over consumers, are the key to winning the hearts and minds of the clueless masses. But this "solution" is littered with challenges. It's a classic misalignment of interests. High-tech companies hoping to ride the futuristic smart grid wave into profitability are relying on a rather sluggish, slow-to-react industry.

Google needed partnerships with utilities to really make PowerMeter effective. Once a utility agreed to connect their smart meter data with Google, the company could aggregate that information for users via PowerMeter. Google did manage to sign on a few utility partners including San Diego Gas & Electric and Yello Strom in Germany and smart meter maker Itron also became a partner. Still, even with that modicum of success, some utilities were uncomfortable with Google having that kind of access to its customers.

Last year, I thought Google made a brilliant move by partnering with Current Cost, a U.K. company that sells real-time energy-usage monitors. Current Cost's monitors are interesting because, unlike a smart meter, they allow customers to watch their energy consumption in real time. But even that partnership failed to help Google scale up its product.

Then there are the consumers themselves. As BNET blogger Eric Sherman noted, consumers have become increasingly suspicious of Google's use of personal data.

Google is hardly the only company to fail in the home-energy market. Microsoft's similar product Hohm has struggled to gain market share and other companies have closed up shop. Hohm has since changed things up a bit and is now focused on its partnership with Ford to manage electric-vehicle charging at home.

Some good has come out of Google's entrance into the market. When Google first announced PowerMeter, many start-ups including WattVision were downright "scared" about what would happen to their business (h/t GigaOm). The folks at WattVision now see things differently and admitted in a recent blog post that the "attention the Google brand brought to our space was quite a boon for us, as well."

Photo from Google

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