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Google’s Deal To Buy Nest: One Piece Of A Larger Consumer Energy Puzzle

Publication Date: 
January 14, 2014
National Geographic - The Great Energy Challenge
Christina Nunez

Professor Dan Reicher comments on the early success of a product designed to track energy use for The National Geographic. 

With the acquisition of thermostat-maker Nest Labs for $3.2 billion announced Monday, Google might finally be arriving at the right moment in a quest for home energy data that began about five years ago with the now-retired PowerMeter.

Nest might be one of the few home energy start-ups that you recognize by name. Founded by two former Apple executives in 2010, the company’s visually appealing “learning thermostat” has quickly gained a retail foothold and plum publicity such as a plug on The Ellen DeGeneres Show. The company also makes Nest Protect, a smoke/carbon monoxide detector. (See related post: “Can Ex-Apple Execs Turn Up the Heat on Thermostats?“)


Dan Reicher, who oversaw the project as director of Google’s climate change and energy initiatives from 2007-2011 and now directs Stanford University’s Steyer-Taylor Center for Energy Policy and Finance, said PowerMeter “worked very well.” He fondly recalls that after he explained the PowerMeter concept to his then-7-year-old son—put bread in the toaster, watch the spike in electricity on a screen—his son ran through the house turning appliances and lights off and on to see the effect. “By the end of a half hour, he knew more about energy in the home than a large percentage of Americans,” Reicher said. (See related story: “Google Searches for Key to Energy Savings.”)


“The energy market is a complicated one, whether you’re building wind turbines or developing energy monitoring capabilities,” Reicher said. “I think a judgment was made that this was a slower-than-usual Google product.”

Reicher pointed out that, aside from an entry point for home energy monitoring, Nest devices may ultimately give Google “an anchor into the connected home that it doesn’t currently have,” allowing it to pursue home-automation capabilities. Either way, the deal extends Google’s ever-proliferating reach into the connected consumer’s world, from thermostats to phones to televisions.

Reicher said he is glad to see Google investing in Nest, but thinks that Google should have stuck with PowerMeter. It ultimately might have been a “faster and cheaper path to home energy monitoring of the sort that Google just acquired for $3.2 billion,” Reicher said, and “Google might very well have figured out another route into the connected home” if it had given PowerMeter more time.