Google Jumps on the Smart Grid Bandwagon

Last Updated Feb 10, 2009 6:55 AM EST

Google has just made a foray into the smart grid, according to the New York Times, announcing a new service called PowerMeter that will help track energy usage in homes and businesses. The search giant wants to extend its information-management expertise into electricity management, and appears to have broken the news through the NYT and a few other choice outlets in an effort to make a big splash in an area that is already grabbing headlines.

Whenever Google enters a new business sector, the first reaction of pundits and onlookers is morbid speculation over whose cookies the company will eat. The reaction is reasonable; Google's search product forcefully wrested market share from Yahoo and Microsoft, and its online ad service sucks dollars from other mediums. But PowerMeter looks like good news for almost everyone. Google's interest should help expand most companies in the infant smart grid market.

Here's why: The smart grid has only a single aim, but offers multiple methods to achieve that aim. The aim is to reduce energy usage. But the methods of doing so run a gamut, from simply allowing utilities to force energy usage down during peak hours and crises, to allowing consumers to micro-manage every device in their home.

The first generation of smart grid technology was weighted toward giving utilities the control, based on the notion that it was utilities who were interested in buying and installing the technology, so anything developed should be designed around their needs. That meant the work was weighted toward simply making the smart meters that track usage as cheap and functional as possible.

Today the equation is shifting toward giving end-users control, pushed in no small part by President Obama's interest in the smart grid. But there's no consensus yet on how much control consumers should have, or how they should have it.

The NYT article is pretty short on details, but it does suggest that Google is almost entirely focused on innovating to provide online controls for existing smart grid technology. Meter makers like General Electric and Itron can rest easy; likewise for the startups who make the communication chips to place in the meters, including eMeter, Silver Spring Networks and Trilliant.

Although some of those companies have and interest in providing controls and user interfaces, their main interest is in the physical technology required for the smart grid. Having a consumer-friendly online interface in the style of Gmail or Google Analytics will only help increase demand for their products. Out of the total lineup of dozens of companies, though, a few will benefit more than others, like Silver Spring, which Forbes says Google invested in.

If there's anyone that could be damaged by Google's move, it would be a few specialized startups like Tendril Networks, which has a platform called TREE (Tendril Residential Energy Ecosystem) and focuses on consumer interfaces with the smart grid. However, Tendril is still focused mostly on equipment like in-home displays. And as Google has proven in the past, it's not infallible; having some choice on the market is a good thing.