Show them the Money: EnergyRM and Nexant Provide Solutions for Split Incentive Retrofits
Jan 27, 2021
By Jason Gregory, CEO of EnergyRM
This is a guest blog by EnergyRM.
Commercial buildings consume almost one fifth of the total energy used in the United States, but an average of 30% of it is wasted. Deep retrofits have the potential to cut energy consumption by as much as half, but many projects fail to move forward because of longstanding misaligned economic interests between building owners and tenants. That’s where we step in. EnergyRM is a software company that provides project investors, building owners, and project developers with the tools needed to monetize the value of energy efficiency. We recently teamed with Nexant for project development support, and released an upgraded version of our cloud analytics and transaction platform, furthering our mission of unlocking investment in deep energy efficiency at scale.
Finding New Solutions to Old Problems
Despite the many advantages of energy efficiency, building owners have been hesitant to fund deep retrofit projects because they won’t directly earn a return on their investment. While their tenants benefit from lower energy bills, the tenants themselves won’t fund these improvements because they are temporary occupants and don’t own the building. This has become known as the “split-incentive” challenge, and it has impeded investment in countless retrofit projects. We saw the untapped potential here, and from this our platform was born. Our investment-grade analytics and transaction platform solves these longstanding issues and unlocks investment in deep energy efficiency for all parties involved.
Unlocking Investment in Deep Energy Efficiency
Our platform consists of two innovations: investment-grade software and an energy efficiency Investment Structure. Together, the platform enables investors, building owners, and project developers to monetize the value of energy efficiency. It brings the tools and technology needed to both accurately meter and transact the value of deep retrofit projects; building owners, project investors, and project developers like Nexant can now remotely prospect building portfolios and identify buildings with the greatest uncaptured energy efficiency opportunities. Critically, our Investment Structure results in new Net Operating Income for building owners, enabling energy efficiency production to compete with other revenue-generating projects.
Tenants benefit from cleaner and greener spaces, all while continuing to pay the same amount for their utility bills - “bill neutrality” - which generates that new income for building owners and investors. Further, deep energy efficiency building retrofits are proven to reduce operating and maintenance costs for building owners.
Looking Toward the Future: Teaming with Nexant
We’re thrilled to be working with Nexant to drive energy efficiency returns for their clients and create a clean energy future. Jacob James, a Sr. Project Administrator at Nexant, said this about our work together: "EnergyRM excels at long-term energy efficiency performance tracking, so we can help our customers realize a sustained return on their investment. In addition to helping us address the split incentive problem, they help us focus and align on priorities with our utility clients, facility partners, and project investors." We look forward to collaborating with Nexant, leveraging their energy auditing and project development strengths, while providing ongoing transactional support to focus on the best outcomes for energy efficiency and the investments that make it a reality.