Worcester, MA-based World Energy Solutions (NASDAQ: XWES) said today it has acquired Northeast Energy Solutions, an energy efficiency firm based in Cromwell, CT. The purchase price is about $4.75 million in cash, stock, a promissory note, and potential earn-outs.

This is the second acquisition in as many months for World Energy, which has been moving strongly into the energy efficiency market. In September, the company bought the energy procurement business of Co-eXprise, an enterprise software firm. Back in March, World Energy said it had invested in a seed financing round for Retroficiency, a Boston-based energy-efficiency software startup.

World Energy specializes in energy management services, such as the demand response market, in which utilities pay factories, stores, and municipalities to curtail their energy use during peak demand times. The company is led by CEO Richard Domaleski.

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EnerNOC (NASDAQ: ENOC), the Boston-based provider of energy management and demand response technology, announced today that it has acquired Energy Response, the largest demand response provider in Australia and New Zealand. The deal helps EnerNOC expand its presence in those markets and gives Energy Response customers access to EnerNOC’s applications. The announcement did not reveal how much EnerNOC paid for the company, but noted that the purchase will likely be be dilutive to EnerNOC earnings in 2011 and 2012, and accretive beginning in 2013.

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Worcester, MA-based World Energy Solutions (NASDAQ: XWES) said yesterday it is raising $5.5 million in a sale of 1.5 million shares of common stock ($3.60 per share) to several institutional investors. The company says the money will be used for new investments and acquisitions in energy management, among other strategic initiatives. World Energy is known for operating online auctions where energy suppliers compete to win contracts with big customers; early last year it moved into the “demand response” market, in which utilities pay factories, stores, and municipalities to curtail their energy use during peak demand times. The company, which is led by CEO Richard Domaleski, recently invested in a seed financing round for Retroficiency, an energy efficiency and retrofitting startup based in Boston.

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For Californians who want to make their houses greener and more energy-efficient, installing solar panels is often the first strategy that comes to mind. And there are many innovative Bay Area companies ready to help people do that, as I’ll describe in a story coming later this week. But Recurve president Matt Golden argues that solar is probably the last energy-related investment most homeowners should be making, not the first

“We are 100 percent pro-renewable energy, but you need to do things in the right order,” says Golden. “Before you install a new furnace, you put in the right insulation. Before you install 6 kilowatts of solar panels, you do efficiency improvements—and then you might need only 3 kilowatts to achieve the same result.”

It’s not very green, in other words, to put solar panels on top of a house that leaks heat all through the winter and cool air all through the summer. San Francisco-based Recurve, which Golden founded in 2004, will help you get your energy-wasting house in order before you think about bigger investments like solar panels.

Recurve is one of hundreds of energy efficiency retrofitters springing up around the country these days. But it’s perhaps one of the most high-tech, relying on software of its own design to systematize the process of home energy auditing.

Recurve’s technicians will go through your house room by room, testing factors that affect energy efficiency, such as airtightness, and feeding the data into laptops that run a physics simulation of the whole house. Once they’ve figured out how much you can save on energy bills by adding more insulation, sealing more ducts, and replacing outdated lighting, heating, and air conditioning equipment, they can do the actual work too—they’re certified builders. They’ll also help you pay for the work through zero-money-down, low-rate home financing packages.

But what really sets Recurve apart is its engineering-driven outlook on what it calls “home performance contracting.” These guys are the Amazon or the McKinsey of the energy retrofitting business, motivated by the conviction that a little data goes a long way, as long as it’s accurate. (Golden says Recurve’s retrofitting cost quotes are binding—if it ends up costing more to reach the promised efficiency improvements, Recurve eats the difference.)

While the company currently serves a relatively small market—just the counties surrounding San Francisco Bay—it’s got big ambitions. With around 65 staffers, Recurve is already the largest retrofitter on the West Coast, “and we intend to keep growing,” says Golden. The company is active on the policy front, pushing for more incentive programs like the $2,000 in efficiency rebates available to each San Francisco homeowner from the city government, the $3,500 newly available from Pacific Gas & Electric (PG&E), and the Home Star Retrofit Act wending its way through the U.S. Congress. But it’s Golden’s long-term vision for Recurve that’s really audacious.

The company has 10 retrofitting crews out in the field and a bevy of software developers back in its Mission Street offices, and in a way every home retrofitting job they do is a rehearsal. Eventually, Golden thinks, the day will come when Recurve is hired not by individual homeowners, but by utilities. His vision is that utilities will pay contractors to retrofit thousands of homes at a time, bringing about reductions in energy demand that will help them match generating capacity with expected loads for far less money than it would take to … Next Page »

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It’s so costly and complicated to build new generating plants these days that utilities would rather prepare for periods of peak demand, such as hot summer days, by buying “negawatts”—that is, by agreeing to pay big customers like factories, stores, and municipalities to dial back their electricity use when called upon. EnerNOC (NASDAQ: ENOC), a sweetheart of the Boston technology community since its 2007 IPO, has built a big business around pooling customers who want to participate in these so-called “demand response” programs and remotely managing their electricity use when the call comes in from grid operators. EnerNOC profits by keeping a percentage of the operators’ per-megawatt payments.

But while EnerNOC is the largest and most successful of the so-called “curtailment service providers” (CSPs), there is growing competition in its industry—and now the company is getting some very unwelcome news. World Energy (NASDAQ: XWES), a Worcester, MA-based company known for operating online reverse auctions in which energy suppliers compete to win contracts with big customers, announced today that it’s getting into the demand response market. This means that for the first time, customers in deregulated electricity markets who want to be paid for their curtailable load will be able to solicit bids online from competing curtailment service providers, then choose the provider offering the highest price (meaning the most attractive percentage split).

EnerNOC, in other words, is gradually losing its first-mover advantage. It may soon have to cope with a market in which it’s no longer the first and only curtailment service provider to approach new customers, but instead must compete with dozens of other providers in electronic auctions specifically designed to drive bidders’ profit margins down.

The irony is that EnerNOC, which built its business on smoothing out inefficiencies in electrical supply and demand, is now seeing that business disrupted by another young, technology-based company that sees the demand response market itself as inefficient.

From World Energy’s point of view, customers thinking about joining demand response pools have had no way, up to now, to determine the fair market value of their curtailable load. Indeed, it sees its auction service as providing both competition and transparency. It’s portraying the service, which it has already tested in the “PJM” grid region covering 13 Midwest and Middle Atlantic states, as … Next Page »

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Green Mountain Power—the Colchester, VT-based electrical utility that serves approximately one-quarter of Vermont residents—said today that it has joined the New England demand-response pool managed by Boston-based EnerNOC (NASDAQ: ENOC). Green Mountain customers who are already registered through the utility to receive payments or rate reductions in return for a commitment to roll back electrical usage during times of peak demand will now be able to participate in regional demand-response events through EnerNOC’s larger network. The two companies have also agreed to work together to sign up more demand-response customers in Vermont.

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Ember, the Boston-based maker of wireless mesh-networking chipsets for communications between devices such as utility meters and thermostats, will announce today that it has topped off its coffers with an $8 million funding round from a group of venture firms and strategic partners. CEO Robert LeFort says that if government stimulus spending on energy efficiency measures translates into solid demand for Ember’s equipment, as expected, the new round (which brings the total the company has raised to $89 million) should be its last.

Many of the funds Ember has turned to in the past participated in the current round, including Polaris Venture Partners, GrandBanks Capital, RRE Ventures, Vulcan Capital, DFJ ePlanet Ventures, New Atlantic Ventures, and WestLB Mellon Asset Management, along with strategic partners Chevron Technology Ventures and Stata Venture Partners. In the past, Ember has also raised money from STMicroelectronics, Hitachi Corporation, and MIT. LeFort (whom I interviewed at length in January) tells Xconomy that the company has been working to assemble the round since late last summer, but that the global economic slowdown delayed negotiations.

But now investors see the Obama Administration’s economic stimulus package, which includes $17 billion for improvements to the U.S. electrical grid, as a strong plus for the company. Part of the stimulus money will go toward so-called advanced metering initiatives, in which utilities are equipping customers’ homes with new electrical meters that communicate wirelessly with utility control centers and in-home thermostats.

The devices will help utilities by allowing them dial back home electrical usage during peak hours remotely, and they will help customers by showing them exactly how much money they’re saving by conserving energy and switching to more efficient appliances, and the like. Inside almost every smart meter is a radio that uses ZigBee, the industry standard for short-range, low-data-rate radio communications—and the leading maker of ZigBee chipsets is Ember.

So far, California and Texas are the two states with the most smart-metering pilot tests underway. “I’ve heard about up to 20 different pilots going on around the country…of anywhere from 500 to 5,000 homes apiece,” says LeFort. “It’s very encouraging that people are spending real money, either to deploy or to do detailed investigations, with statistically significant samples, of how the technology will work.”

Research firm In-Stat predicts that sales of ZigBee-enabled devices will increase from their 2007 level of 7 million units to nearly 300 million units by 2012. The stimulus money won’t necessarily boost of Ember’s chipsets above the levels already expected, since “the utilities are saying they’re already going as fast as they can go,” says LeFort. “But we’re getting added emotional support, if you will, from the stimulus. The administration is saying, ‘keep on the path you are on, and if there are areas to accelerate, let’s leverage those.’”

Since a radio is needed on both ends of a wireless message, Ember is able to sell its chipsets both to manufacturers of wireless meters and to makers of programmable thermostats—essentially home energy control panels that display how much energy consumers are spending or saving. Later on, the company also expects to supply radios for smart plugs, devices that fit into electrical sockets and communicate with the control panels to conserve energy.

All of that prospective business reassured investors enough to make it possible to raise the latest $8 million. The money will be used “to support volume customer deployments and take us into maturity, meaning financial sustainability,” says LeFort.

It’s been a long road for Ember, which got its start in 2001 selling wireless temperature sensors to factory and refinery owners. “One of the questions has always been, is there a killer app out there” for wireless mesh networking, LeFort says. “It was always a fragmented market, and it was always a question of are you going to be able to get the volume up there. And then about two years ago, the utilities got behind ZigBee as the technology of choice for getting information into the home. Our investors see that it’s not a matter of if anymore, it’s a matter of when. Of course, if you’re a startup, when is an important question, because you have to have enough oxygen to get to the promised land. But we are finally past the point of asking whether there is a big enough market.”

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EnerNOC (NASDAQ: ENOC), the Boston-based company that pays factory operators, store owners, and local governments for the right to dial back their electricity usage during times of peak demand, announced today that the City of Boston is finally diving into the local “demand response” pool. Under a new agreement negotiated with the office of Mayor Thomas Menino, Boston City Hall, the Boston Public Library, and Boston Police Headquarters will be equipped with remote-controlled meters that allow EnerNOC to reduce non-essential electricity usage whenever local utilities need a buffer. In return, the city will get periodic payments—whether or not it’s ever called upon to cut usage—plus additional money for every actual demand response event.

EnerNOC had previously landed clients seemingly everywhere on the Eastern Seaboard except its home city. As we’ve reported, the State of Rhode Island, the State of Vermont, the State of Connecticut, and even the Pentagon have joined EnerNOC’s pools, whose willingness to contribute “negawatts” by cutting electricity consumption during heat waves or other emergencies means utilities don’t have to build additional fossil-fuel plants. But Boston wasn’t a participant, until now.

“The City of Boston is a hub of clean tech innovation, and EnerNOC is a shining example of Boston-based companies that are making an impact on the way the world uses energy,” Mayor Menino said in a statement released today. “Demand response allows the City to implement smart energy saving measures and make an immediate contribution to the overall reliability of our region’s electric power grid. This is a win-win strategy that puts dollars back into our budget.”

EnerNOC chairman and CEO Tim Healy says the Boston contract has both practical and symbolic importance for the company. “There’s a lot of great discussion and dialogue about what the Commonwealth of Massachusetts and the City of Boston can do to create green jobs and green initiatives, but the fact that the city has decided to step forth and participate and find innovators right here in its backyard, while putting more revenue back into the city’s pockets, is important to us,” Healy told me last night.

“Also, we have so many people who work for us who live in the South End or the North End, and they like the fact that the very city they live in has chosen us—it’s another testament to them being at the right company at the right time.”

Like all EnerNOC clients, the city will get free access to a proprietary EnerNOC software package called PowerTrak. Using data collected by the monitoring and metering equipment installed at each EnerNOC client site, PowerTrak helps business and institutions identify ways to cut energy use.

How much money the city will get back through the demand-response payments and the efficiency monitoring depends on … Next Page »

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Boston’s EnerNOC, which runs “demand-response pools” consisting of companies, municipalities, and other organizations that agree to dial back their electricity consumption during hours of peak demand, said today that it’s won permission to sign up U.S. federal and military facilities as pool participants. The Pentagons’ Defense Energy Support Center (DESC) formally approved EnerNOC as a demand response provider—a potentially huge win for the company. “The federal government is the largest consumer of electricity in the United States and technology-enabled solutions like demand response can have a significant impact on reducing its energy consumption and costs,” EnerNOC chairman and CEO Tim Healy said in a statement.

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