A partner at a $1.2 billion fund told us a 'fundamental paradigm shift' is reshaping the way consumers think about energy. Here are 3 startups he's betting will benefit.

• Few people know how much energy they use, but that's soon to change, according to Sameer Reddy, a partner at the $1.2 billion investment firm Energy Impact Partners.
• "I think there's going to be a fundamental paradigm shift in the way individual consumers think about electricity," he told Business Insider.
• That's why Reddy is placing big bets on a handful of startups that are trying to change the way consumers buy energy and optimize their homes.
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Here's a question you probably never think about: How many kilowatt-hours of energy do you use in your home or apartment every day?

"If you ask any of your friends, I bet none of them can even guess," said Sameer Reddy, a partner at Energy Impact Partners (EIP), a $1.2 billion energy investment firm that's one of the most active funds in the clean-energy industry. "I'd say that's pretty normal."

But it won't be normal for long, he says. That's thanks to a major shift in the conversation about climate change and recent events in California including the disruption of power that affected millions of people serviced by the utility Pacific Gas & Electric Co.

"Events like in California have caused consumers to think more closely about electricity, and the whole climate conversation has shifted pretty considerably over the last few years," he said. "I think there's going to be a fundamental paradigm shift in the way individual consumers think about electricity."

That shift will fuel startups that offer energy services to consumers, he says, like access to renewable energy and tech that makes your home more energy-efficient.

Read more: These are the top 21 clean-tech startups to watch that are set to transform the energy industry

Within that category, Reddy is betting on startups that develop mass-market approaches that don't compromise cost or comfort.

"People want to do the right thing, but they also want to be incredibly comfortable," he said.

He mentioned three startups that stand out.

Arcadia: The first "no-brainer offering"

There are 24 startups in EIP's equity portfolio, but three stand out as seeming to benefit most from the "paradigm shift" that Reddy describes.

Those are Arcadia, Ecobee, and Sense.

"The value to customers needs to be super simple," he said of clean energy offerings. "Until Arcadia, I don't think anyone's really created a true no-brainer offering."

Read more: A top investor who's backed 30 startups explains why energy storage and smart-building tech are the best bets in clean-energy

Arcadia allows consumers to opt into renewable energy with little effort. They hand over control of their utility bill to Arcadia, which manages it for them, providing the consumer with renewable energy in return. Consumers can monitor their power usage and bills using an app.

"What Arcadia is doing is they're creating bottoms-up demand for clean energy, and they're simplifying the way that a clean energy product is presented to the end customer," Reddy said.

EIP participated in three of Arcadia's funding rounds, according to PitchBook, across which the company raised $61 million.

Ecobee: Tapping into the potential of smart thermostats

Another stand-out that scored EIP's investment is Ecobee - a Canadian startup, backed by Amazon, that sells a smart thermostat similar to Nest. The company says it can help customers reduce their heating and cooling costs by up to 23%.

At first glance, Ecobee is nothing like Arcadia. But what they both offer consumers is a low-effort way to keep tabs on their energy usage.

"Your thermostat represents a significant portion of [energy] load - about a third of the load within the home," Reddy said. "So it's a major underrated resource. We think Nest and others still haven't fully tapped into the potential."

In 2018, EIP led a $61 million funding round for Ecobee, joined by the Amazon Alexa Fund.

Sense: "An unprecedented level of intelligence"

Reddy is also betting on Sense, a startup based in Cambridge, Massachusetts. Like Ecobee, it sells a product that allows you to monitor your home's energy usage - in this case, down to individual appliances, which each have their own electrical signature, according to the company.

The idea is that if you know how much energy different appliances in your home are using, you can make informed decisions about where to cut back.

"If you know when your garage door is opening, if you know when your oven is on, that provides an unprecedented level of intelligence that never existed before in the home," Reddy said. "This level of home intelligence will become the gold standard within every new home."

In 2016, EIP co-led a $14 million investment round, according to PitchBook, along with Shell's venture arm, Shell Technology Ventures. The investment firm also participated in a $30 million round in July 2019.