OPower Gets $50 Million To Drive Energy Efficiency Via Peer Pressure

The Arlington, Va. clean tech startup, OPower, closed a $50 million series C investment led by Accel Partners and Kleiner Perkins Caulfield & Byers (KPCB) and joined by the company’s earlier investors New Enterprise Associates (NEA) the firms announced Monday.

OPower’s software-as-a-service helps electric and gas utilities understand who their residential energy consumers are, and how they are using power. Home owners get access to OPower programs through their utilities. OPower’s applications let them see if they’re more or less energy-hogging than their neighbors, allow them to set personal goals to reduce their own energy consumption at home, and receive alerts if they’re headed for a large bill at the end of the month among other things that are meant to inspire a behavior change.

OPower’s chief executive Dan Yates jokes, “We get paid to tell people to turn out the lights and turn down the thermostat.” OPower’s series C deal came together in just six weeks and closed on Thanksgiving eve Yates said. Accel and KPCB contributed equal amounts.

A partner at Accel, Peter Wagner explained his fund’s decision to invest at this level in OPower:

“OPower focuses on one of the most important issues of our time— improving energy efficiency on a massive scale. [Their] model is a perfect fit with Accel’s strategy for the energy sector. We focus on opportunities where information technology and the internet can create value in large-scale markets while maintaining a high degree of capital efficiency.”

[Read: clean tech concepts that aren’t as political, capital- and materials-intensive as biofuels or electric vehicles.]

Accel’s portfolio is well-known for social web success stories including Facebook, Groupon and Playfish. Wagner noted:

“OPower can take advantage of the dynamics of the social web to motivate significant and lasting efficiency gains across millions of households, [while providing] deep consumer engagement that is extremely valuable to utilities.”

The company will use its new-found capital Yates said, “To radically expand our R&D effort, bring 50 more people on board, and above all to build more product.” The CEO would not elaborate on what specific features and applications the company sought to release in 2011. He said most of the new product would be designed for energy consumers, rather than utilities. (OPower also provides utilities with a system to help customer service reps manage relationships and handle inquiries.)

Currently, OPower’s 45 clients are all U.S.-based utilities. OPower has had lots of inbound inquiries, Yates said, including from foreign utilities beyond North America, but hasn’t decided where to set up overseas operations.

The approach of using peer-pressure to drive more environmentally responsible behavior at home could work well in nations like South Korea, where the cost of trash collection goes up for an entire community when just a few people within it— including embarrassing Americans— fail to keep recycling and refuse separated.