Dive Brief:
- GridPoint has secured a credit facility of up to $150 million from climate solutions investor Hannon Armstrong Sustainable Infrastructure Capital to deploy its technology across commercial buildings while shouldering upfront costs for its customers.
- The energy optimization tech firm’s approach to driving energy management growth across commercial buildings involves pooling installation, software, equipment and service costs together into a bundled monthly payment.
- This new facility expands on a four-year partnership, accelerating the pace of decarbonization efforts through GridPoint’s platform.
Dive Insight:
The financing agreement between GridPoint and HASI comes as commercial enterprises are recognizing the need to bolster emission reduction efforts and progress climate action targets, but remain concerned about the financial barriers to decarbonization.
In a 2023 corporate climate action survey, conducted by Conservation International and We Mean Business Coalition, involving business managers from 502 global organizations across the U.S., U.K. and Europe, 86% of businesses reported that budget constraints and a lack of consistency and collaboration across their organizations are key hurdles in curtailing emissions and meeting targets, while 82% pointed to a need for additional support, voicing concern about a lack of clear guidelines on how to decarbonize.
GridPoint expects the new funding from HASI will not only reduce emissions from buildings significantly, but also remove financial barriers that commercial building owners and operators are grappling with as they navigate through energy management technology adoptions.
Targeting commercial businesses that operate small and mid-sized buildings, GridPoint’s platform aims to make its technology more accessible with a subscription model that does not require upfront capital investments.
The company’s monthly fee for customers will range from $100 to $400 and is subject to various incentives, efficiency credits and demand response programs that are expected to reduce payments over a period of time, GridPoint CEO Mark Danzenbaker said in an interview.
The $150 million credit facility from HASI “is a fuel that allows us to offer the zero-down financing model to customers and finance the deployment of our platform in commercial buildings,” Danzenbaker said, citing a midterm goal of scaling the company’s current base of approximately 20,000 buildings to about 100,000 over the next few years.
“Ultimately, we want to deploy energy storage in these facilities and we see the [investment tax credit] in commercial buildings as a significant accelerant in deploying our technology in customer sites,” Danzenbaker said, pointing to tax reliefs under the Inflation Reduction Act, which envisages $45 per kilowatt hour of battery produced. That accounts for roughly 25% of the cost of a battery pack.
“In order to aid the energy transition, we have to decarbonize supply, which is the utility generation mix. But to do this, we also have to electrify and reduce demand, and that means tackling the built environment,” he added.
GridPoint states that its Energy Manager Software intends to make energy and facility data from buildings actionable with automation tools aimed at optimizing operations, and providing more leeway to reduce costs and carbon emissions. The firm said it can meet these objectives by connecting the built environment with energy grids where customers can integrate with other distributed energy resources, including batteries and electric vehicle chargers, to monetize their assets.
“Our new financing agreement with GridPoint demonstrates continued momentum for commercial building decarbonization in driving the energy transition,” HASI’s managing director Daniela Shapiro said in a press release issued June 21.
The funding will help customers save on costs from day one and meet long-term sustainability goals, Danzenbaker said in the release. GridPoint’s biggest customers include Walgreens, Chipotle, Wendy’s and Burger King.
Separately, last year, the energy optimization tech firm raised $75 million in strategic capital from Goldman Sachs Asset Management and Shell Ventures to ramp up the deployment of its technology for commercial building decarbonization.
