How General Electric Could Wind Up Owning the Trillion-Dollar World of Home Energy Efficiency
Of all the corporate giants developing alternative energy businesses, probably none has more potential to make enormous sums of money than General Electric. GE is involved in virtually every area of green business, from wind turbines to nuclear power plants. But it's in the area of home energy efficiency that GE may score its biggest triumph. GE just announced that it has developed something called an "eco-dashboard." Everyone has a thermostat in his house; some have a "programmable" thermostat that can be set so as to avoid wasting energy on heating and cooling. GE's eco-dashboard goes the next step – actually, the next two steps. Step one: the GE dashboard will provide a real-time readout of the money a homeowner is spending on his electricity. Think of it as a minute-by-minute electric bill that enables you to save money just by, for example, setting your clothes washer to run after midnight, when electricity generally costs less. A recent test of a similar meter in Canada resulted in homeowners saving about 20% on their electricity costs. Step two: the GE dashboard will provide a readout for water as well as power. Given the prolonged drought affecting much of the United States, controlling water efficiency is becoming as vital as energy efficiency. Think of the eco-dashboard as the core element of an entire home full of money-saving energy efficient products and devices all made, not coincidentally, by GE. Among other things, GE is working on more efficient light bulbs and appliances. It's working on components for inexpensive solar photovoltaic systems (PV) that could be a part of the next roof you install or maybe the new side paneling you put up. It's even working on components for plug-in hybrid vehicles, which are cars and trucks that will enable you to bypass the gas pumps and fill up at home at night just by plugging the car into a wall socket. While it's still early, GE's green businesses reportedly are growing 50% faster than the company's overall growth rate, and the company is pouring billions into research. A number of observers argue that the market for the eco-dashboard will be limited until electric utilities redesign their rates to reward off-peak consumption. But that day is coming quicker than many think. Utilities such as Duke Energy are pushing regulators for a major overhaul of the entire rate structure, including letting utilities profit from making efficiency improvements that cut their customers' power consumption. (Under current rules, utilities only get paid for the power they sell.) Another reason why GE may wind owning the world of home energy (and water) efficiency: through the company's TV unit (NBC Universal), it can flood the public conscience with pro-green programming any time it wants to, just like it did last week on all of its networks, and make it look like the company simply is acting selflessly in the public interest. |
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The professionals who create alternative energy stock indexes and exchange-traded funds (ETFs) are very particular about picking only companies that derive a significant percentage of their total revenue from alternative energy. While that's okay, it means leaving out giant companies whose "green" revenue isn't significant relative to total corporate income, but whose overall strategy could wind up making them hundreds of billions of dollars, significant income for even the biggest corporations.