Dive Brief:
- Lumen Energy launched Auto PPA, its new automated power purchase agreement software, this week to help facilities managers and property owners find and implement the best sources of renewable energy for each building in their portfolio, according to a release.
- Auto PPA can unlock hidden income for buildings and advance their decarbonization goals by evaluating the development, deployment and operation costs of on-site clean energy systems and financing solar and battery installations, Lumen said. The company noted that such installations require zero upfront capital and create new net operating income by replacing future utility grid expenditure with predictable contract payments..
- “Sunlight is free. Yet historically, it’s been maddeningly complex to figure out the technology economics and take action at scale. Lumen Energy is delighted to make it simple.” Lumen Energy’s CEO and co-founder, Peter Light, said in the release.
Dive Insight:
Auto PPA comes at a time when many building stakeholders, from facilities managers to owners and financial officers, are working toward net-zero emission goals. Lumen Energy says solar technology costs have fallen 90% over the past decade, creating new opportunities for investors who are attempting to address their buildings’ emissions and meet growing state and local mandates and decarbonization commitments.
While numerous instruments currently available can quantify building emissions, Lumen says they do not go far enough to actually drive emissions reductions within building portfolios and the industry at large.
Getting a consultant for every property is “really slow,” and by the time the work gets completed, it might be outdated due to policy changes, Light said in an interview. Evaluating building emissions and the options for clean energy is “really complex, and it's really very hard to do. … Buildings have different codes, different policies, different utility tariffs, and then the technologies are changing, and the cost of electricity is going up. So, all of these things are dynamic.”
Lumen Energy says it created Auto PPA to address these challenges by providing a full cash-flow model that helps teams determine which solutions make sense from a financial standpoint and a carbon reduction perspective. In addition, the company says that with the software doing the math and underwriting in the background, facility operators and owners can “effortlessly evaluate personalized offers for the full development, deployment and operation of on-site clean energy systems” to cut carbon emissions and increase revenue. Large commercial real estate players, including Bridge Investment Group, Hines and Tishman Speyer, are using the software, it said.
To make the process straightforward for facilities managers and building operators, who may need to make a business case for these capital improvements and upgrades to investors and owners, Lumen provides software users with clean energy reports, which Light said are essentially two-page tearsheets that outline the project economics.
“Prior to the final investment decision, we would ask people to verify it with some of their actual data that [they] might have for the facility,” he said, noting that this step can be done through a web application. “But we would need someone, like a facilities manager, to be the buddy and shepherd of that process.”
The Auto PPA launch coincides with the announcement of Lumen Energy receiving $11 million in a Series A funding round led by Lowercarbon Capital, Ajax, Designer Fund and real estate firms Nuveen and Bridge Investment Group. The company also recently became a participant in the Urban Land Institute’s greenprint program.
