Renew Home, the company built out of the combination of Google’s Nest Renew business and OhmConnect, is today striking out on its own. Armed with its existing virtual power plant capacity of nearly three gigawatts, the company’s debut comes with an ambitious goal of growing that capacity by roughly 15 times in the coming years.
- The top line: Moving forward, Renew Home will be the platform provider behind integrations for Google Home energy appliances, but also integrate with the likes of LG, HoneyWell, Sunpower, Amazon, and others. The residential VPP company will now support demand response and VPP programs for more than 100 utilities, but is looking to expand that to a lofty 50 gigawatts by 2030 — a dramatic expansion that could prove challenging given Renew Home’s current focus, and market complexities.
- The market grounding: It was late in 2023 that Sidewalk Infrastructure Partners provided funding to form Renew Home, which acquired OhmConnect and Nest Renew. SIP is a majority owner and investor in the newly minted Renew Home; Google, for its part, is a minority investor, and kept its smart thermostat line, Google Nest.
- The current take: Renew Home CEO Ben Brown told Latitude Media that the move is indicative of a “broader movement in the industry toward recognizing the importance of VPPs,” not only in the context of a pilot with a single device type, but also “as a collection of ways in which homes holistically can help support a more stable, decarbonized, and less expensive grid.”
Google Nest and OhmConnect have made their names in controlling smart devices, including smart thermostats, plugs, and cameras. However, there may be room for growth beyond that model, especially post spin-out.
Daisy Dunlap, an analyst at Latitude Intelligence, said that the small size of these devices relative to residential batteries and electric vehicles means that the company’s goal of 50 GW of VPP capacity — a whopping 25% of the market, according to Renew Home — is ambitious.
“The company would either have to enroll millions more devices to reach immediate scale, a challenge VPPs have already been facing, or significantly change their business model,” she said. “The addition of new partnerships, including LG and Sunpower, signals that Renew Home recognizes the difficulties in single device type VPPs to reach their targeted scale.”
Dunlap added that an expansion of this nature would result in both challenge and opportunity, given the complicated landscape of multiple-asset VPPs. For instance, aggregating a wider range of device types can result in technical difficulties, including signaling and ongoing customer engagement. (Dunlap is working on a forthcoming analysis of the wider VPP market for Latitude Intelligence.)
That said, Renew Home is already a big player. The company’s two-parent history is essential to the position it now holds in the market, said Brown, who previously led smart home consumer products at Google. He sees the visibility that Renew Home offers customers as a key differentiator in the market.
“Nest has been running energy services for utilities for the last 15 years,” he said, adding that many of those programs are now starting to scale “pretty significantly,” from early pilot stages all the way to having 100,000-plus homes enrolled per utility in some markets. “That really, really matters in terms of being able to move this from a concept to something that people can really plan against.”
The joint venture, Dunlap said, comes at a moment when the VPP market is especially struggling with customer acquisition. And this has historically been an area where OhmConnect has excelled; the company was a “key player” in creating and maintaining customer relationships in programs around the country, Dunlap said, via utilities, wholesale programs, state energy offices, and aggregators.
“This move directs emphasis on treating customer engagement as a fundamental layer of VPP models, which can set a baseline for program design in the future to mitigate customer engagement challenges we’ve seen hindering existing VPP deployments,” she added. “Instead of treating customer services as a helpful layer, I think this merger shows a key transition to treating the issue as an essential element of VPPs.”
Renew Home isn’t a startup, Brown clarified, but spinning the company out on its own was a goal that dated back to early days of “growing and incubating” Nest Renew inside Google.
“Recognizing the need to be a platform, the need to be able to work across the industry, the need to be able to actually open up and work directly in energy markets: all those things really kind of felt like they were going to be best done as an independent company,” Brown said.
The timing of Renew Home’s official launch is in large part about reaching sufficient scale, Brown said, on a timeline that lines up with the broader market.
The massive load growth that has become apparent in the last year or so presents a “pervasive call to action,” Brown said, one that both Google and OhmConnect were already seeing “through partners and conversations through the industry.”
