It’s not unusual for nonprofit groups to sprout from the business world, but the opposite rarely happens: a for-profit business being launched by a nonprofit. That’s the case at Shifted Energy, a Hawaii-based startup specializing in energy technology.

Shifted Energy was founded in 2016 as a spin-off from the nonprofit Kanu Hawaii, a 40,000-member grassroots organization focused on environmental sustainability and community empowerment. The company was created to provide greater access to energy solutions among renters and low-income residents in Hawaii. Its software creates virtual power plants (VPPs) from single and multifamily homes by connecting electrical appliances such as water heaters and electric vehicle chargers to a cloud-based platform.

The original idea was hatched when Olin Lagon, Shifted Energy’s co-founder and chief technology officer, sat on the governing board at Kanu Hawaii. As noted on the Shifted Energy website, Lagon realized that many of the energy tech ideas the nonprofit proposed would not be available to a large portion of Hawaii’s population.

Shifted was created to develop scalable solutions for these communities – beginning with a low-cost control service for water heaters – with the ultimate goal of helping Hawaii transition to 100% carbon-free electricity.

As of 2022, Shifted Energy had equipped more than 3,000 Hawaii households with its cellular-connected, smart water-heater control modules, Canary Media reported. Customers in these homes earn about $3 a month in utility bill credits for letting Shifted Energy turn water heaters on and off during sudden shifts in wind and solar power supply.

In addition to its water heater solutions, Shifted Energy’s product suite includes batteries, solar inverters, thermostats, pool pumps, EV chargers, and whole home meters. The company can provide services anywhere through its patented Grid Maestro VPP solution, which works as a standalone tool or as part of existing distributed energy resources management system (DERMs) platforms. 

Shifted Energy’s VPP has already been adopted for use in Hawaiian Electric’s Power Partnerships Program. This program enlists customers to help balance island grids that are required by state law to run completely on renewable energy by 2045. The VPP offers a collective capacity of up to 2.5 megawatts of fast-responding grid support.

Using Shifted Energy’s algorithms, Hawaiian Electric can predict how much electricity each family needs to provide hot water at different hours of the day. In this respect, it operates like a power plant, with the added benefit of being able to remotely program water heaters to absorb excess solar power when more is being generated than the grid can handle.

Shifted Energy’s other co-founder, CEO Forest Frizzell, has experience working with utilities in his previous job as Director of IT for Hawaii Gas. He has referred to Shifted Energy as “more than a water-heater company” because its algorithms can also be applied to home batteries, EV chargers, and other household appliances. The main advantage of focusing on water heaters is that they provide a ready market for customers. Water heaters are in all Hawaii homes, even those without costly solar panels, backup batteries, and EV chargers.

“[With Shifted’s technology we have] ​solved, at scale, how to engage in getting frontline communities to get enrolled and participate in these opportunities,” Frizzell told Canary Media.

Shifted Energy aims to expand its market reach after closing a $4.3 million seed funding round. The round was announced in March and co-led by EPIC Ventures and Kapor Capital, with participation from Buoyant Ventures, Startup Capital Ventures x SBI Fund, and Hunt Development. Proceeds will be used to add staff and expand coverage areas throughout the United States, Canada, and Australia. 

“We started Shifted Energy with the mission of an equitable transformation of utilities markets, and we are excited for the positive impact that this new round of funding will unlock,” Lagon said in a press release. “Our proprietary solutions have been developed, tested, and perfected to help utilities throughout the world stabilize their grids while accelerating the integration of intermittent wind and solar power generation.”