Nest scores first utility deal in Texas

The Nest learning thermostat is now winning over utilities, too. On Monday, startup Nest announced that Texas energy service provider Reliant has started offering its learning thermostat through one of its energy efficiency programs.
Customers that sign up for Reliant’s conservation program get a Nest thermostat in exchange for signing a contract for two years of fixed electricity prices. Texas energy service providers like Reliant are interested in offering customers attractive services and devices as a way to keep them from changing providers. It’s a competitive market in Texas, which makes the state an interesting ecosystem for energy startups.
Cracking the utility world is a pretty big deal for Nest. While Nest is first and foremost and consumer-focused company, utilities can act as a strong distribution channel for the thermostat, and can also use the thermostat to collectively curb energy consumption during peak grid events. This type of service is called demand response, and the saved energy per household helps utilities manage their grids during really hot summer days. Nest tells me that Reliant will not be using its thermostat for demand response through this service.
Nest’s thermotat has a ZigBee chip installed in it, so it could potentially also connect with utilities’ smart meters. Nest says that home owners can save 20 to 30 percent on their energy bills using the thermostat, which is one of the highest estimated ways to curb home energy use on the market.
In recent weeks Nest has also expanded its consumer-focused distribution channels, and has started selling the thermostat through Apple’s online site(s aapl) and Amazon’s online store(s amzn). For a detailed review of the Nest thermostat check out Kevin Tofel’s impressions.
Nest, founded by former Apple designers and backed by tens of millions in venture capital funding, launched at the end of 2011, with its smart learning thermostat. The idea was to create a cool, coveted device that would get people actually interested in their thermostat, and then use learning algorithms to help the customer cut their energy consumption and save money on their bill.
The company was sued by Honeywell earlier this year, but hired Apple’s former legal counsel to fight back.