By Andrew Nusca | May 28, 2010

Microsoft says its Hohm website will help you understand the energy consumption of your home.

(Get it? “Hohm”?)

But what’s the business model? What’s in it for Microsoft — and how will this really help the smart grid?

I spoke with Hohm project manager Troy Batterberry about how the Redmond, Wash.-based company’s new site is like Mint.com for home energy consumption — and why underneath it all, it’s really the seed of a new cloud computing platform.

SP: How did you get involved in Hohm?

TB: I’ve been with the company 13 years, and 10 years ago, I went off, got married and took a sabbatical honeymoon with my wife to Mt. Everest. Literally on the mountain, I had a professional midlife crisis.

Previously, I had been spending a lot of time on entertainment technologies, and prior to that I was doing weapons research. When I came back to Redmond and told them I wanted to do something different, they came back and suggested the coming energy crisis.

To bottom line it all, that was the genesis for how Microsoft Hohm was born three years ago. If you look back, the other market we were focused on was healthcare. We chose to focus on the residential energy market at first because it’s the largest — bigger than commercial, bigger than industrial.

There are two things we wanted to help consumers do: help them drive efficiency, and help them automatically shift discretionary electricity consumption to off-peak times.

SP: So what’s your business model? How does Hohm make money?

TB: In the short term, it’s really about using data we compile to provide advertisements and lead data to consumers who want to change habits.

In the long term, we have the potential to sell some of these services back to utilities to help them manage the grid better.

We’re providing a tool and a service that a consumer can use today, independent of whether their utility has smart meters in the ground.

We’re also working with utilities — we have deals in place with four, the largest being Xcel Energy in the Midwest. Collectively, 4.5 million households can use an enhanced version of Hohm.

We’re approaching it from a consumer perspective, a utility smart grid management perspective, and a device perspective, with the Ford Focus. We want to create value for everyone involved.

[Hohm] is something that gets me up in the morning. I’m literally excited about going into work. One of the challenges is that there’s so much tremendous opportunity, so many partnerships to support. But you have to focus on value. It has to start with the consumer. We take that point of view not because we don’t value utilities — on the contrary, we see them as important partners.

Site traffic is continuing to build. Consumers really want this type of information. But they want it to be an easy-to-use package.

SP: So what’s next? Can I get Hohm with my next electric bill?

TB: Today, you get the Hohm application by going directly to the web. But utilities are asking about incorporating it into what they do.

Right now, what we’re trying to do is totally focus on innovating those consumer experiences, independent of utilities first, and making it the de facto experience for the web.

I think the utility industry is really behind some other industries when it comes to online support. There are 3,500 utilities in the United States. A lot of them are very, very small. But we have millions of partners worldwide. We’re going to have a process in place where a utility could easily be added to Hohm.

SP: When will Hohm go OpenID, instead of only Windows Live ID?

TB: Today we support Windows Live ID. We’ll certainly consider other methods of logging in in the future.

It’s not a trial balloon. We’re in this business. We are in this business for the future.

Energy is going to become more costly. Renewable energy can be intermittent. Hohm allows for the first time to finally couple supply with demand. There’s a great value proposition.

SP: When will you provide better support for urban folks like me who live in apartment buildings?

TB: Clearly our sweet spot right now is the single-family and the townhouse. That’s the majority of the market. We will get there, absolutely.

SP: How will you get the word out about Hohm? How will my parents find out about it?

TB: We have a variety of marketing campaigns. We have a variety of grassroots social marketing campaigns. If you provide a great consumer experience that others find value in, they will let you know.

Our utility partnerships will continue to drive traffic. Our device partnerships will continue to drive partnerships.

We’re creating a new category here, and that takes a lot of time and effort. But that’s what so exciting about this. It has that virtuous impact.

SP: In many ways, Hohm feels like personal finance site Mint.com, for what I would call “energy finance.”

TB: It’s really a superset of Mint. At some point in the future, not only are we going to manage the information in your household, but we’re make it possible to manage and control your use.

Such as through devices, in four to five categories: EVs, water meters, white goods appliances, smart plugs, the thermostat.

We think the thermostat is a strategic device when it comes to the household. Frankly, it’s ripe for innovation. Networking connectivity opens up a whole new set of scenarios.

SP: Will Hohm be able to leverage Microsoft’s large corporate footprint?

TB: It certainly helps that Microsoft is such a well recognized brand. All these devices really scream out the need for a platform — a cloud based services platform. That’s really our DNA. That’s what we do. We think it’s really well-aligned: the company, our core strengths and our brand.

More Microsoft Hohm coverage on SmartPlanet:

May 26, 2010 6:48 AM PDT by Martin LaMonica 

Updated at 10:30 a.m. PDT with comments from Microsoft.   

Microsoft is trying to garner more interest in its Hohm home energy app through neighborly competition.   

The software giant released on Wednesday the Hohm Score, a free Web application that judges a home’s estimated energy efficiency based on its general size and location. With estimations already in place, Hohm has determined that homes with the worst scores are in Texas and Tennessee while the best are in Hawaii and Delaware.  

A sample recommendation and ranking from Microsoft Hohm. (Credit: Microsoft)

 The score is “calculated by comparing a home’s actual and potential energy efficiency,” Microsoft said in a press release. It uses home energy-efficiency models generated by the Lawrence Berkeley National Labs, which Hohm uses to create recommendations on how to cut utility bills.

Microsoft said that checking out a Hohm score will let people determine whether they are “energy misers” or “energy hogs” among more than 60 million houses in the U.S. The application generates an estimate of how energy is used in a home–heating, cooling, lighting, etc.–and offers an estimate for potential annual savings.  

After plugging in some addresses, I saw that Hohm Score tool appears to rely on real estate information and regional energy use data to generate a home profile.  

For example, I plugged in my home address and the address of my next-door neighbor–we both have older homes that are about the same size–and found that we both scored 69 out of a possible 100, which is better than the national average of 61.  

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Meanwhile, the house I grew up in gets a lower score, apparently because it is bigger than my current one and because the average energy use in that part of the country is higher.  

The idea of the application is to give people an idea of how their homes compare with others, a technique now being used by utilities that has shown to be an effective motivator.  

My initial impression is that this is a rough estimate based on house type, fuel sources, and location. For example, I’ve spent a lot of effort weatherizing my home and I have solar panels, so my overall energy bill is significantly lower than the Hohm estimate.  

In a blog, Hohm general manager Troy Batterberry said that people can get more accurate information by entering utility information.  

“You can fine-tune the accuracy of your Hohm Score and your personalized savings recommendations by creating a free Hohm account and entering some basic information about your home such as the type of appliances and systems you have. You can also update your home facts and enter your actual energy usage from your utility bills,” he noted.  

In an interview, Batterberry said that Microsoft intends to make the profiles of individual addresses more accurate by using public data or data that it can purchase, such as information on how much energy a house uses per year. It can also get information, such as which areas have natural gas service, to calculate the potential energy savings.  

Connected home platform
Longer term, Hohm can become more sophisticated by getting actual usage data from plugged-in devices, such as appliances, thermostats, or electric vehicles. Microsoft’s vision is to have a “connected home platform” where different equipment reports data to the Hohm application.  

Once home gear is connected to Hohm, the application can also control devices. For example, the heating and cooling system can be controlled through a networked thermostat. Hohm will also allow people to share recommendations on home efficiency with others.  

In Microsoft’s deal with Ford, Hohm will be used to schedule car charging, giving people the option to charge at off-peak times or to use a mobile device to start charging when they’re away from home. Microsoft said it plans on supporting whichever protocols will be used for in-home communication and send information to Hohm via the Internet.  

The connected home approach also provides one avenue for Microsoft to make money from Hohm, which will always be free to consumers, according to Batterberry. Microsoft intends to act as a broker between consumers and utilities seeking to lower peak energy usage through demand-response programs. A utility could signal to Microsoft that it needs to lower demand on the grid and Microsoft Hohm would act as the conduit to turn down energy usage in people’s homes by, for example, slowing down the charge rate on an electric vehicle.  

Microsoft also intends to provide recommendations for home efficiency jobs from Hohm, such as installing more insulation. Through those referrals, Microsoft expects to make money as well. 

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  Martin LaMonica is a senior writer for CNET’s Green Tech blog. He started at CNET News in 2002, covering IT and Web development. Before that, he was executive editor at IT publication InfoWorld. E-mail Martin.