Dive Brief:
- Renew Energy Partners and fintech firm EnergyRM are providing commercial real estate owners up to $200 million in project capital to finance energy retrofits, according to a Nov. 16 release.
- Using EnergyRM’s transaction platform, Renew will cover capital investments the building owners will repay using the energy savings generated after the retrofit.
- The transaction structure accelerates property modernization and carbon footprint reduction for owners without increasing costs for tenants, the companies say.
Dive Insight:
Energy-efficiency retrofits can reduce operational costs and attract tenants, according to the Department of Energy. Recent research from Schneider Electric found that retrofitting office buildings with digitized building and power-management systems and replacing fossil fuel heating sources with electric and renewable energy can reduce carbon emissions by up to 70%.
Facility owners and operators also want to decarbonize buildings via retrofits to meet greenhouse gas emissions reduction goals or regulations. The U.S. will need to triple its retrofit rate to meet net-zero targets, with 80% of today’s office buildings likely to still be in use by 2050, according to a recent JLL report.
Even so, paying for these retrofits remains a challenge. Retrofitting a typical gas-powered office building in New York state with a ground-source heat pump, for example, could range from $12 to $21 per square foot, according to estimates from Rosen Consulting Group.
The partnership between Renew and EnergyRM aims to provide building owners and operators with up-front financing that can increase the accessibility of energy-efficient upgrades and facilitate on-site renewable generation, the firms said.
EnergyRM CEO Jason Gregory pointed to the need for mitigating the risks building owners shoulder when they implement energy retrofits and for increasing the amount of capital project investors can deploy on their behalf. Energy retrofits should not be an unrecoverable cost, Gregory said in the release.
“Renew's mission is to decarbonize the built environment and make it financially compelling,” Charlie Lord, principal and co-founder of Renew Energy Partners, said in the release. This funding approach “has allowed us to do just that.”
