Owners Can Turn Energy Waste into Revenue
More US building owners and investors can turn energy waste from existing assets into guaranteed, bankable revenue streams, thereby gaining substantial financial upside while cutting carbon emissions.
SAN FRANCISCO—According to Navigant Research, the global market for energy efficient building technologies is expected to grow to $360.6 billion by 2026. Following that growth trail, clean energy services company Carbon Lighthouse along with partner, Generate Capital, recently closed a $65 million project finance fund, its third and largest project financing to date. Carbon Lighthouse will use the funds to help more US building owners and investors turn energy waste from existing assets into guaranteed, bankable revenue streams.
“This project finance fund enables us to continue providing services to clients with zero out-of-pocket costs, reducing risk even further for our clients,” said Brenden Millstein, co-founder and CEO of Carbon Lighthouse. “This allows us to expand our services at an even quicker pace and wider scale, while achieving more and more impact as we move full speed ahead into 2019.”
Through efficiency production, Carbon Lighthouse’s data-driven clean energy and efficiency approach, commercial real estate owners and operators (including REITs, hotels, schools and small businesses) can turn the energy savings achieved through real estate assets into guaranteed revenues that can be leveraged during financial transactions. Carbon Lighthouse can save building owners $0.40 to $0.60 per square foot, boosting net profit by $5 to $10 per square foot when a building is sold. For example, a building owner with a 10 million-square-foot portfolio can gain $50 million to $100 million in new, bankable profit.
Carbon Lighthouse’s partner, Generate Capital, is a financier, owner and operator of distributed energy and resource infrastructure.
“Generate Capital is laser-focused on finding the innovators who are solving the critical problems of our time and our job is to help these entrepreneurs and executives scale their businesses for both significant impact and profits,” said Jigar Shah, president and co-founder of Generate Capital. “Carbon Lighthouse has cracked one of the most challenging but crucial markets for cutting carbon emissions from the built environment: commercial real estate. They have proven that energy efficiency savings can be turned into lease revenue that is widely recognized as good REIT income which has been the largest hurdle to attracting the attention of property owners, hotels and other building owners.”
On the heels of this announcement, Carbon Lighthouse also mentioned a $7.5 million follow-on equity investment to its $27 million strategic growth round closed earlier this year, bringing the total investment to $34.5 million. The additional investment came from CEAS Investments run by Mike Wohl, who invests on behalf of a large single-family office in South Florida.
“Thanks to this third and largest project finance fund with Generate Capital, we can extend our existing clean energy and efficiency services at no out-of-pocket cost to hundreds more building owners across the country and turn energy waste into guaranteed financial revenue,” Millstein tells GlobeSt.com. “With buildings contributing 40% of US emissions, this allows building owners to view climate action as a financial product and gain substantial financial upside while cutting carbon emissions.”
Carbon Lighthouse has worked in more than 500 buildings across the United States from Hawaii to New York and has eliminated the equivalent of six power plants, with nine more currently under contract. By 2020, Carbon Lighthouse aims to cut the equivalent of 50 power plants and will be on track to eliminate 50 more every year after that.