Australian smart thermostat company wins CEFC backing

A Melbourne-based smart thermostat start-up that is giving Google offshoot, Nest, a run for its money in the US, has won backing from the federal government’s Clean Energy Innovation Fund.

The Clean Energy Finance Corporation said on Monday that it had made a $5 million equity investment, via the Innovation Fund, in Zen Ecosystems’ series B capital raising, to go towards the further development and deployment of its Zen HQ and Zen Thermostat products.

The company – which was spun out of consultant turned manufacturer, Planet Innovation, late last year – started out targeting the American residential market, and its Zen Thermostat has so far notched up 45,000 installations in the US.

The Zen HQ, which is being used in Australia by organisations such as the RACV, is designed for small to medium businesses to manage energy-intensive assets across single and multiple sites, namely heating, ventilation, and air conditioning (HVAC).

The company is also one of eight currently working with ARENA and the Australian Energy Market Operator as part of a coordinated demand response project.

As part of the project, Zen Ecosystems will deploy a network of connected, smart thermostats in commercial buildings and households in Victoria and South Australia, in an effort to help shift electricity load and keep energy supplies stable, reliable and affordable during periods of peak demand.

The network will be able to be controlled by the Zen HQ cloud platform, allowing for the adjustment of set points of heating and cooling to reduce energy consumption when AEMO calls a demand response event.

But the focus for the company in Australia appears to be more on the business side of the equation, and helping SME’s to maximise energy efficiency as the prices of gas and electricity continue to rise.

“Heating and cooling are typically responsible for around 40 per cent of total building energy consumption, representing significant energy costs for businesses and consumers,” said CEFC transaction lead Kristin Vaughan.

“We see there is enormous scope for innovative clean energy technologies such as these, which can help businesses achieve significant energy savings by managing their own consumption as well as
lowering their carbon footprint.

“This technology also opens the way for individual users to participate in demand response initiatives, contributing to the continued stability and reliability of our energy system.”

Innovation Fund executive director Ben Gust said Zen’s technology and behind-the-meter management solutions could unlock major opportunities for cutting the energy consumption of retailers, hotels and motels, schools, universities, car dealerships and fast food outlets.

“Traditionally, energy usage has been controlled by building management systems, which are usually only cost effective for large or industrial-use buildings,” he said.

Zen Ecosystems CEO, James McPhail said the company hoped that this round of growth capital, headed by the Clean Energy Innovation Fund, would help to aggressively expand its product roll out in both Australia and the US.

“There are huge market segments, including retail chains with large portfolios of small to medium-sized buildings, crying out for smart, simple control of HVAC systems to reduce energy, peak load
and maintenance costs, and Zen HQ is a simple and affordable solution to meet those needs.”

The Clean Energy Innovation Fund has now made nine investments, committing up to $55 million across a range of innovative technologies, from electric vehicles to enhanced battery storage and
innovative demand management drawing on a new Internet of Things (IoT) network.