3 Companies Reinventing The Energy Efficiency Business
Energy efficiency is joining the “as-a-service” revolution, and these three companies are leading the charge.
Many readers may remember a time when buying computer software involved literally owning an object — a box with disks in it, a CD-ROM, or later a file to download and unlock. Now, it’s common to subscribe to, say, Microsoft Office, essentially renting the use of the service the product provides rather than owning an object. That’s the “as-a-service” model, and it’s making its way into other industries, too: music (Spotify), computing infrastructure (Amazon Web Services), solar panels (SolarCity), and lately, energy efficiency.
When companies sell energy efficiency as a service, it allows smaller businesses and organizations to access technologically advanced equipment — like complicated LED lighting and control systems — that might be too expensive for them to invest in, explains Angela Ferrante, chief marketing officer of SparkFund, a company that helps facilitate energy-as-a-service transactions (see below). “Customers get the benefits of ownership much more easily than if they actually had to own this type of equipment. We see that as a critical way for energy efficiency as an industry to live up to its potential.”
That potential is huge: A 2012 report by the Rockefeller Foundation estimates that investing in energy efficiency retrofits is a $279 billion market that could yield more than $1 trillion of energy savings over 10 years in the US. Yet since then, LED lights, for example, have only reached 6 percent market penetration. By removing many of the barriers to adopting energy efficiency measures, especially in commercial settings, SparkFund and other companies hope to profit even as they help solve an important piece of the climate change puzzle. Here are three of the businesses leading the charge.
- Washington, DC
- Founded in 2013
- 24 Employees
What it does: SparkFund provides the infrastructure and financing required for other companies to sell their energy efficiency products as a service without having to radically change their business models. Essentially, SparkFund provides the “as-a-service” business model as a service of its own to other energy businesses (meta, right?). SparkFund helps companies with financing, contracts, documentation, billing, and sales training as they make the transition to offering their technology as a service to other business owners.
2. CARBON LIGHTHOUSE, INC.
- San Francisco, CA
- Founded in 2010
- 35 Employees
What it does: The engineering wonks at Carbon Lighthouse deploy a network of sensors inside buildings, run the information they collect through a machine-learning platform, and use the data to install and optimize the control of back-end building systems. The machine learning allows the company to deliver up to 30 percent energy savings simply by optimizing existing equipment. Also hugely important: The company incentivizes participation among both landlords and tenants by delivering energy savings to tenants through a services contract and paying rent to the landlord directly to access their sensors and controls.
"We're at an epochal moment in energy management where all the pieces are coming together to transform the role of energy in the enterprise, driving new efficiencies, business models, and value streams." - Current, powered by GE CEO Maryrose Sylvester
3. CURRENT, POWERED BY G.E.
- Boston, MA
- Founded in 2015
- 2,000 Employees
What it does: This “startup” is actually a new company within industrial giant General Electric. Current brings together a whole list of GE’s energy-related offerings — with revenues already at $1 billion as of its launch — including LED lighting, solar, energy storage, and information technology apps and software. Current offers comprehensive, customized energy-efficiency solutions as a service to large commercial businesses such as Walgreens and Intel, and municipalities including San Diego, CA; Schenectady, NY; and Tianjin, China. Eventually, the business will also work with utility customers.