PALO ALTO -- In October 2011, two former Apple (AAPL) engineers unveiled Nest, the $249 stainless steel "learning" thermostat that quickly became the rage among designers, consumers keen to save energy and the cleantech crowd.
Now Palo Alto-based Nest has reached a significant milestone, announcing Monday that it has inked partnerships with Southern California Edison, NRG Energy, Austin Energy and other leading utilities across the country. In some markets utilities are offering instant rebates and exclusive offers for consumers to purchase the $249 Nest thermostat; in others they are introducing seasonal energy-saving reward programs that current Nest owners can tap into.
At Apple, Nest co-founders Tony Fadell and Matt Rogers led teams that created the iPod and the iPhone. The duo has transformed the household thermostat into a sleek device that can connect to the Internet through home Wi-Fi networks and be controlled via smartphone apps. The Nest Learning Thermostat "learns" your household energy habits through a combination of sensors and cloud computing. If you typically turn up the air conditioning when you get home from work, the thermostat soon mimics that routine automatically.
The company, which is backed by Google (GOOG) Ventures and Kleiner Perkins Caufield & Byers, has grown to 210 employees. Bill Maris of Google Ventures and Randy Komisar of Kleiner Perkins sit on the board.
The Nest thermostat can be bought online at Amazon.com, at Apple stores and at retailers like Lowe's and Best Buy. The thermostat has been sold in 80 countries worldwide, though Nest declined to disclose how many units it has shipped.
"We are where people are," Erik Charlton, Nest's vice president of business, said in an interview. "The Northeast is very strong, Texas and Florida are strong, New York, California."
Utility companies are often offered incentives by state regulators to create energy efficiency programs for residential and business customers. There's a lot of focus these days on "demand response," programs in which utilities ask consumers to cut back on their energy use or automatically curtail it to better manage available supplies.
Southern California Edison serves 5 million residential customers from Anaheim to Yorba Linda. Of those, roughly 15,000 customers already own a Nest thermostat. Some buy them because they love technology; others are cost-conscious and want to save money on their utility bills.
"The whole concept of customers managing their energy usage on a proactive basis is relatively new," said Seth Kiner, SCE's vice president of customer programs and services. "The market is just forming. As Nest grows, as we believe they will, they have great potential. There's a line to get them."
Utilities are eager to better manage "residential load" during spikes in energy use. That's particularly an issue in Southern California, where hot summer days leads to heavy air conditioning use. The San Onofre Nuclear Generating Station remains offline, which makes conservation even more critical.
Nest announced the utility partnerships Monday afternoon at the Bloomberg New Energy Finance Summit in New York.
One of Nest's new programs is "Rush Hour Rewards," which automatically tweaks temperatures on hot summer days to save energy during what's known as peak load events. Nest could raise the temperature in your home by a few degrees during the afternoon, or begin precooling a home before the late afternoon rush hour to help utilities offset the need to bring more generating power onto the grid. Another program, called "Seasonal Savings," aims to give homeowners a summer tuneup. By adjusting temperatures a few degrees or tweaking the home cooling schedule, consumers can save a lot on air conditioning bills.
"If we need to save power, we can let Nest customers know 24 hours in advance that tomorrow will be a Rush Hour event," Kiner said. "We want to make sure our customers can respond when we need them to."
According to Amazon's Bestsellers list, the Nest Learning Thermostat is the second-most wished for item among customers in the "Home Improvement" category, and has been among the top 100 best-selling items in Home Improvement for several months. Miami leads the nation in energy-efficient home improvement product purchases, according to Amazon.
"Miami is hot for programmable thermostats," Laura Gonia said on behalf of Amazon.com.
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.