If our buildings were 100% powered by renewable energy then there would be no reason for energy efficiency, BUT achieving 100% renewable energy-powered buildings will be easier if those buildings are energy efficient.
These are the two sides of the sustainability discussion around building operations but, more often than not, energy efficiency takes center stage in the development of green buildings.
In recent years, however, a range of startups are gaining traction in the commercial building market with advanced renewable energy management technology and services that could drive clean energy generation to support efficiency in our quest for sustainability.
In this research note, utilizing the extensive data from our 2023 StartUps in Smart Buildings and Smart Building StartUp Landscape reports, we explore the funding and business activity around startups in renewable energy management in buildings in recent years.
Renewable Energy Management Activity in 2022
Late last year, in December 2022, British energy firm Octopus Energy Group announced the acquisition of UK solar developer and asset manager, Zestec Renewable Energy. Zestec is developing over 160 MW of new rooftop solar energy which are sold to organizations that host the solar panels via power purchase agreements (PPA). This allows a wide range of building types to benefit from self-generated green power without needing to raise the capital for the installation of the solar system themselves.
There’s a significant untapped opportunity in the UK to generate more cheap green power from businesses' rooftops,” said Zoisa North-Bond, CEO of Octopus Energy Generation. “This space is fast-growing and it’ll help bring more energy security and lower energy bills, all while allowing companies to reduce their carbon emissions.”
A month earlier, in November 2022, DIF Capital Partners purchased a majority stake in Sweden-based Alight, formerly Eneo Solutions, in a €150m deal that saw several early investors in the startup cash out. Alight offers solar-as-a-service by building solar panel systems for commercial and industrial customers across the Nordic region and then supplying the power to the company through a PPA. The investment will enable Alight to accelerate its build-out of new solar projects in the Nordics and more broadly across Europe.
October and September 2022 saw two successful early funding rounds for Frequenz and Candi Solar, respectively. Berlin-based Frequenz closed a Series A financing round totalling EUR 13 million, backed by SET Ventures, for its AI and battery-enabled price forecasting and renewable consumption optimization service.
While Swiss-headquartered Candi Solar concluded its Series B funding round led by STOA, one of the largest infrastructure-focused equity investors for emerging economies, for its build-finance-operate solar play for small-scale commercial and industrial clients across Africa, India, and Southeast Asia.
In July 2022, Legence, a US player in building efficiency, acquired Black Bear Energy to extend its position in renewable energy deployment across the built environment. Black Bear Energy is a tech-enabled, commercial buyer’s representative specializing in onsite renewable energy and cleantech services. In the past five years, Black Bear has helped its clients bid out over 1,000 clean technology projects in more than 20 US states through its data-driven process.
June 2022 saw another two Series A financing rounds for renewable energy management startups, Cleanwatts and Enviria. Portuguese energy management software company Cleanwatts raised EUR 25 million to expand their deployment of renewable energy communities in countries with advanced legal frameworks and policies that enable the activation of local energy markets.
Frankfurt-based Enviria, one of the fastest-growing companies in the German rooftop solar market, raised EUR 22.5 million in a funding round led by Redalpine, Galileo Green Energy, and others.
We saw two more successful Series A funding rounds in March and February 2022 as David Energy and Einhundert Energie made their marks on the market, respectively. NYC-based David Energy secured $20.5 million for its proprietary software platform that utilizes ML to act as the Energy Operating System for buildings to streamline purchasing and optimize distributed energy resource assets for demand response.
Germany-based rooftop solar provider Einhundert Energie raised EUR 70 million through a joint venture led by Netherlands-based Triodos Investment Management.
Kicking off 2022, Schneider Electric acquired Zeigo and EnergySage in January and February respectively. UK-based Zeigo provides an AI-enabled climate-tech platform to enhance digital capabilities in energy, sustainability, and environmental commodity consulting.
US-based EnergySage is an online comparison-shopping marketplace for rooftop solar, energy storage, project financing, and community solar solutions for residential and commercial customers. The two acquisitions bolster Schneider’s renewable energy management capabilities and demonstrate corporate appetite for innovation in the space.
Renewable Energy Management Activity in 2021
In 2021 we saw a range of startups achieving strong investment results. In November, for example, Israel-based Nostromo Energy raised $15.5 million from venture capital to expand its R&D, project management, regulatory, and US sales and marketing organization.
That followed a $13.6 million investment for the ice-based thermal energy storage solution provider in June 2021 as part of a merger with Tel Aviv Stock Exchange (TASE) listed company Somoto. And, the firm has gone on to secure a $189 Million loan guarantee from the US Department of Energy to deploy 275 MWh of distributed energy storage systems in January 2023.
Earlier in the year, UK-based flexible load optimization platform provider Oaktree Power secured seed funding at an undisclosed amount in October 2021. In August 2021, the self-proclaimed “world’s largest digital marketplace for procuring renewable energy” LevelTen Energy raised $62.3 million in a Series C funding round to expand its PPA access across Europe and North America.
In June 2021, UK-based Origami Energy generated an impressive $78.2 million in a Series C funding round energy data & portfolio management platform for energy storage system owners, energy optimizers, and energy services companies.
Through seed, series, and venture funding, these startups and others discussed in our 2023 StartUps in Smart Buildings and Smart Building StartUp Landscape reports are driving innovation and growth in a rapidly emerging space within the smart buildings market. The acquisitions by Schneider Electric, Legence, DIF Capital, and Octopus Energy are a sign of things to come as the efficiency-focused buildings industry develops its renewable energy generating potential.