California Startup Saves Companies Millions and Combats Climate Change

Seven years ago, Sunnyvale resident Mark Chung took a three-week vacation. When he came home, his electricity bill looked more than a little off.

“Normally my energy bill is about $100 to $130,” says Chung. “This one was like $560.”

So he called PG&E and told them: ‘There’s something wrong with my meter.’

“And they’re like, ‘Oh, no, we’ve had these smart meters rolled out for a few years now. Everything is fine.’”

His response: “Well, can you tell where I spent the electricity?’”

The utility’s response: “On your house.”

Not the most helpful answer, Chung says, laughing.

But Chung was trained as an electrical engineer at Stanford University, so he did what any engineer might: He went to Home Depot.

“I bought these kilowatt meters that they had on the shelves, they’re like $10,” says Chung. “We hacked them to be Wi-Fi enabled, then I plugged them throughout my house. And I couldn’t find anything that was an anomaly. ”

So Chung took the project to the next level and built an electrical map to monitor every appliance, every piece of machinery, every light in his house.

And he found the problem: a broken pool pump that was spinning inefficiently, using too much energy. Problem solved. And business idea hatched.

“I spent a lot of time thinking about wanting to do something,” says Chung. “I always thought technology was cool, I can build greater, cooler things. But I want to use it in a way that can help people, help humanity.”

Chung reasoned, if he could map his house, why couldn’t he scale things up and map a factory or a hotel that uses A LOT of energy. So, Chung left his day job and launched a company he named Verdigris. NASA was one of his early backers.

In case you’re wondering, Chung named his company after a color. Verdigris is the bluish-green patina that forms on copper that’s left outside. Think: old French buildings.

“Copper is the elemental infrastructure of every single building in the world,” says Chung, “what all of our electricity runs on. And what we have as a company mission is this desire to expose that to the world and make it green.”

To head off the worst impacts of climate change, which requires holding the global temperature rise to less than 2 degrees Celsius relative to pre-industrial levels, scientists warn that we need to cut global carbon emissions by 40 to 70 percent by mid-century. There are two basic ways to get there: replace fossil fuels with renewable energy sources. And/or, we can use a lot less energy. Verdigris focuses on that second solution by making buildings smarter.

Saving Millions of Dollars in Energy Costs

Chung found factories around the world willing to invest in the technology. In Scotland, about 15 miles west of Edinburgh in the city of Livingston, the company Jabil is using the Verdigris system in its 125,000-square-foot factory.  Jabil is a worldwide company that builds electronics parts, the stuff that goes inside your brand-name radios, TVs, and computers. (Jabil is also an investor in Verdigris.)

The factory’s facilities supervisor, Robbie Graham, opens an electrical panel box with dozens of wires. Each wire has a small clamp around it that can measure the flow of current around 8,000 times a second.

Graham knows exactly which wire goes to which piece of machinery. “These wires go to my air handling units on the roof,” he says, pointing at one.

Up on the roof, Neil O’Loughlin, Jabil’s facilities lead in Scotland, picks up the tour.

“Look,” he says, “you’re getting to see the sun. We couldn’t have gotten it any better, to be fair.” (Seeing the sun is a big deal during the Scottish winter.)

Anyway, the roof is littered with massive fans that circulate air through the building. The clamps around the wires downstairs collect information about these fans—how much electricity each of these units use—then sends that data to the cloud.

Before Verdigris was installed, O’Loughlin says, they would have had no idea whether one of the fans was pulling down too much electricity, much less which one.

“Now, you’re able to actually see which one is maybe being driven harder than the rest, and why,” he says. “So we start to ask questions. Verdigris is never going to hand you the answer. It’s part of a detective story, to some degree, where you got to go and take the clues that it gives you, and you have to go and find out what that is.”

The system quickly identified an industrial-sized air conditioner that was using too much power. They fixed it and saved a lot of wasted energy. In another case, O’Loughlin says Verdigris showed big spikes in energy use in the middle of the night. He figured out that security guards were flipping on all the lights.

“That’s 300-odd lights that needed to be switched on just to do a walk around,” says O’Loughlin. “Whereas with smart lighting controls, we can say, well actually we’re only going to bring them up 50 percent so they’re going to use half the energy. And we only need to bring on certain lights, only bring on 30 percent of them.”

Put another way: Lots of little changes add up to big savings. Quickly. With Verdigris installed, the factory was able to cut its monthly electricity bill by 20 percent, saving the company thousands of dollars.

Verdigris can also use artificial intelligence to automatically phase out inefficient appliances, dial them down when nobody is in the building, or even predict when one is about to go kaput.

The goal at Jabil’s Scottish factory: eventually cut energy use by 80 percent.

What’s Stopping Companies From Monitoring Energy Use?

There are a growing number of companies like Verdigris offering products that monitor how buildings use energy.  So, here’s a question: Why isn’t every hotel, factory and hotel using this technology—like, yesterday?

“I think it’s organizational, psychological and political,” says John Sterman with MIT’s Sloan School of Management. “It’s not economics and it’s not technology.”

Sterman stresses that investing in energy-efficient buildings is the cheapest, fastest way to cut our energy use and greenhouse gas emissions. But many businesses are reluctant to spend the money to fix what isn’t yet broken. Systems, like Verdigris, can identify problems like wasteful air conditioners, but then building owners have to pay big bucks to replace the appliances.

And when it comes to new technologies, Sterman says, many business administrators ask this question: Who else is doing this?

“And of course, at the beginning, not very many,” he says. “So people are not willing to experiment, or, as they see it, take a lot of risk until they are sure there are lots of other folks who have done it. And that creates a barrier, a tipping point you have to get over.”

Hopping back to Silicon Valley, I ask Mark Chung: Let’s say I own a 20,000 square-foot factory. Convince me to pay you a monthly fee to monitor my energy use.

“20,000-square-foot factory, OK, I’m just doing a back of the envelope calculation,” Chung says. “It’s probably going to be roughly a few hundred bucks a month, but you’ll probably save easily 10 times that.”

Let’s repeat that, spend a few hundred bucks a month to save a few thousand. For a hospital, those savings could translate into hundreds of thousands of dollars annually. For a company like Jabil, with more than 100 factories worldwide, savings could be in the tens of millions.

Now translate those cost savings into energy savings across the globe.

“Buildings consume about two-thirds of the world’s electricity,” says Chung, “and half of that is wasted. And that is probably about 15 to 20 percent of greenhouse carbon emissions today.”

Verdigris is still a new enterprise, approaching its first 100 clients. Chung says when the business really takes off, he wants to give away his technology to homeowners for free.