Smart Thermostats by Telkonet Help to Save Energy in Hotel Rooms

  • Telkonet
  • 05.30.13
Telkonet, Inc.'s wireless energy management system provides hoteliers with smart thermostat options to reduce energy waste.

Telkonet Finds Market Niche in Saving Energy for Hotels: Smart Thermostats Mean Growth for Wautatosa Company

Business travelers are known for leaving the light on — and the air conditioner, too — when they leave a hotel room.  They can be gone for hours. By the time the housekeeping crew shows up, the glaring lights and chilled air represent nothing but wasted energy.  With energy prices rising, hotel operators are finding reducing energy waste is a natural way to cut costs.
A small but growing Wisconsin company aims to help meet the needs of travelers and hotel operators using smart thermostats and a little help from the cloud.
Telkonet Inc. has developed a wireless energy management system that includes thermostats, occupancy sensors and controls that power down lights, televisions and even outlets when the room is empty.  But it all starts with the thermostat that's not only setting the temperature but collecting minute-by-minute data about a guest's temperature needs.
"This is truly an intelligent thermostat in that there's a microprocessor on board," said Jason Tienor, Telkonet chief executive. "It's actually recalculating every second of the day" to ease off the heat or air conditioning once a guest leaves the room, and then to recover to the desired temperature at the time guests typically return.
The technology is part of a growing focus in the energy-efficiency business to use high-tech monitoring systems to help companies save on their energy costs.  In the United States, the market for sensors and controls for building energy-management systems is projected to grow at a rate of 17% a year, the market research firm Lux Research forecast last year. A similar growth rate is projected in Europe, with the combined market size for both regions reaching $4 billion by 2020.
Telkonet joins several other Wisconsin energy-management firms, each with a slightly different focus. Environmental Systems Inc. in Brookfield remotely monitors the operation and energy use at every Kohl's store to ensure that the building is functioning at its most efficient — and least costly — way. 
And Johnson Controls Inc., which is known for selling large heating and cooling equipment and building controls, moved in recent years to a more cloud-focused service offering through its Panoptix platform, which allows building managers — or the corporate office — to track buildings' energy use in real time or carbon dioxide emissions across an entire corporation.
From a cubicle at Telkonet's office in Wauwatosa, with a click of a mouse engineers can change the temperature setting for a dorm room in New York City or a hotel room in Chicago.  And the real-time data being transmitted back to Wauwatosa gives Telkonet and its customers a sense of how much they're saving on energy.  From his laptop, Gerrit Reinders, Telkonet executive vice president for global sales and marketing, calls up a building diagram on his screen. It's a hotel in downtown Chicago. A few rooms, he notices, have the thermostat set to 80 degrees or more — probably guests from the Middle East who set it to temperatures they find comfortable.
Too often hotels have to rely on their housekeepers to keep the heating and cooling equipment from running too long at the wrong setting. But housekeeping is tough work, and the housekeepers themselves like to set rooms to a cooler temperature while vacuuming and changing sheets.  Reinders can see a bottom-line savings for this particular hotel.  "This property will have saved almost $260,000 on energy in its first year," he said. "This will give them a system that pays for itself in less than two years."
In terms of scale, Telkonet and Johnson Controls — where Reinders previously worked in the building-efficiency business — could not be farther apart. With sales of more than $40 billion, Johnson Controls is the state's largest company based on that measure. Telkonet is perhaps Wisconsin's smallest publicly traded company, with a market capitalization of $22 million and a stock price — traded over-the-counter rather than on a major stock exchange — of less than a quarter per share.
But Telkonet appears to be hitting its stride. In addition to a series of long-term contracts that give it sales visibility, the company has been expanding its workforce, now employing 106 people. As a result, the company is rapidly outgrowing its office on Innovation Drive, Tienor said.  Its technology is getting more widely accepted, and its market focus has expanded thanks to contracts with the military and higher-education institutions.  Military barracks and college dormitories have energy-use profiles that are similar to hotels', so the broader focus was a natural extension for the company to expand beyond the hospitality sector where it started.
Since 2008, Telkonet has outfitted more than 4,000 rooms in 11 dorms at New York University. The performance there has led to adoption by other schools, such as Columbia University and Massachusetts Institute of Technology.  "The fastest growing environment for us over the last year was education," said Tienor. "Schools have really started to wake up to what the costs of those dormitories are."
Telkonet's ties to the hotel industry remain strong, given that its EthoStream business supplies high-speed Internet services for hotels.  The big challenge for Telkonet — as with any company developing start-up technology — is the road to profitability. Pushed by an investor during a recent conference call as to whether 2013 is the year that Telkonet's operating earnings are positive, Tienor said that is "his intention" but could offer no guarantees.
Telkonet competes against the likes of Schneider Electric and Inncom International.  But the technology is getting enough attention that customers are coming to Telkonet because they've already heard of it, he said.
As a result, after the company posted at least $3 million in sales for four straight quarters, Tienor is spending more time on the road in investor presentations, looking to drum up interest in the thinly traded stock. 
Profitability and improved cash flow to enhance the company's balance sheet are goals, but the biggest goal of all, Tienor said, is top-line sales growth.
"The first and foremost thing that is a goal for this year is significant top-line growth, obvious increases to revenue, and we're working very diligently at that, and what we've done in (the first quarter) has positioned ourselves to be able to fulfill our top-line revenue demand," he said.

By Thomas Content of the Journal Sentinel.

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