By Sayre Evan Swarztrauber
There are many lessons that we have and haven’t learned from the economic calamities wrought by the 2008 collapse of the housing market. But one truth about the 21st century was made clear: we, as people of the world, are interconnected. Economies depend on one another more than ever as nations struggle to recover from the evaporation of $10 trillion in global wealth.
Quadlogic Controls Corporation (QLC), based in New York City, is a small business that experienced the hardships of the financial crisis. Since 1982, QLC had produced smart meters, which are conduits that allow for communication between utilities and consumers. They enable customers to monitor their electricity usage in real time. Smart meters make individuals and businesses responsible for the cost of electricity use, which can lead to smarter, greener, and more sustainable decisions.
Because QLC’s smart meters are installed primarily in apartment buildings and commercial buildings, the real estate bubble that grew until 2007 greatly benefited the company’s core business. However, the collapsing housing market caused demand for green technologies such as smart meters to plummet as construction of new buildings ceased and oil prices dropped.
In 2008, Quadlogic lost the majority of its core, North American smart meter business and began hemorrhaging money and resources while running out of time to turn things around. The inventors at QLC needed to build a new, electricity-management product that could somehow tap into a new market and satisfy an unmet need. They decided to solve the problem of electricity theft in developing nations, such as Jamaica, which opened a new door for the company.
Electricity theft is an activity that is highly destructive to the environment. Not only is it dangerous to tamper with power lines, but people who steal electricity have no incentive to temper their usage and be conscious of their environmental impact. Outdated energy grids in these poor neighborhoods provided thieves with the opportunity to strike.
QLC invented and produced the Energy Guard, which is an advanced smart meter that can prevent electricity theft while providing all of the aforementioned, conventional benefits of sub-metering. In some neighborhoods rates of electricity theft went from 70% into the single digits after installation of QLC equipment.
QLC took an entrepreneurial risk in focusing on and rapidly producing a new product to combat an old problem. Jamaica’s main power company became an important client as Quadlogic survived through sales of its new product. Now, the old business of conventional smart meters has recovered close to its pre-recession levels, and the Energy Guard sales continue to grow.
QLC’s innovation saved its business and opened the door to a new market where small businesses can benefit from solving an environmental problem while saving customers and utilities money in the process.
For more information on the Energy Guard and electricity theft, watch an explanation from Marc Segan, co-founder and advisor to QLC, talking about the product: