Smart Grid Reality - growing pains hit startups, moving at the pace of Utilities

CNET News has a post on the Reality of Smart-Grid and how one company GridPoint has adapted its strategy.

Smart-grid companies feel growing pains

by Martin LaMonica

If you think utilities will swiftly adopt smart-grid technologies, consider the story of GridPoint.

Despite being only seven years old, the high-profile energy start-up has adjusted its strategy a few times and made a string of acquisitions. At first, it planned on selling home energy management systems and batteries to consumers, then shifted its focus to selling smart-grid equipment to utilities, such as software to manage home energy or charge electric cars.

Start-ups with a business model that move at the pace of Utilities.

Utilities typically negotiate with public utility commissions on how they will recoup the costs of capital investment, such as smart meters, batteries, or in-home energy displays for consumers. That investment cycle, coupled with utilities focus on reliability, means they don't have big incentives to move quickly, said Rob Day, an investor at Black Coral Capital.

Bad business model.  I don't think the VCs really thought through the problem of consumer adoption via Utility companies.