How a new, non-traditional financing model is helping companies overcome budget obstacles to achieve efficiency and sustainability goals – faster!
As mentioned in a previous post on cost vs. value, we completed an exercise in market research by surveying trade show attendees over the last 6 weeks. We first deployed the surveys at SPECS in Dallas, then at the EEI National Key Accounts Workshop in Orlando, and finally at PRSM in Nashville.
When asked “What do you think your biggest challenge will be this year?”, the majority of answers we received were some variation of the following:
“Keeping cost down”
This is no surprise and I’m sure you can relate.
Additionally, there was another trend we noticed – Facility Managers are absolutely exhausted from the past two years. On one side of the coin, they have been hit with one natural disaster after another, causing massive disruption and the need to re-build and repair. On the other side, increased political and social turmoil has affected their work environments as well as their economic outlooks. And yet, these FMs still have to keep their stores running at optimal levels – and as efficiently as possible – with less money and resources available to them.
Clearly there is an on-going need for reliable, sustainable, effective partnerships; and we believe it’s a worthy endeavor to continue to facilitate these needs through improved education and resources on our end.
The landscape is changing and, for those who only consider traditional financing models, the ability to complete the necessary work to achieve business and efficiency goals is only getting more challenging.
However, there’s a new, non-traditional model available and it’s been backed by a recent $20 million investment round.
So, in an effort to help more Facilities, Energy and Sustainability Managers successfully overcome these obstacles and increase efficiency, we’d like to introduce you to Efficiency-as-a-Service (EaaS) and a company called Redaptive, who is stepping in to aid these projects when traditional capital and financing options have faltered and/or failed.
WHAT IS EFFICIENCY-AS-A-SERVICE (EaaS)?
The Efficiency-as-a-Service (EaaS) solution provides turnkey efficiency upgrades that include materials, installation and maintenance. Customers are able to realize – and verify – immediate utility bill savings and actual kWh savings through Redaptive’s metering and proprietary building intelligence platform to determine a monthly avoided energy payment.
WHO IS REDAPTIVE?
Redaptive is a leading provider of commercial Efficiency-as-a-Service (EaaS).
Redaptive addresses that black box status quo by bringing a deeper level of visibility into assets, empowering our customers to measure their energy assets as currency.”- John Rhow, Redaptive Co-CEO
In April 2018, it was announced the company secured a $20 million investment round led by CBRE, and joined by ENGIE New Ventures, GXP Investments, and Linse Capital. With this investment, the goal is to expand product offerings and reach a larger market of commercial customers across the industrial, manufacturing, retail, and healthcare sectors.
According to Matt Werner, Global President, Facilities Management at CBRE:
Our top priority is to help our clients, and Redaptive provides an opportunity to save them money, be better stewards of the environment, and track their energy use at a deeper level, across their real estate portfolios. Redaptive’s energy solutions are unique and compelling, and we believe the team is ideally suited to bring Efficiency-as-a-Service swiftly to scale.” – Matt Werner
In stark contrast to the industry’s legacy financing models, EaaS enables businesses to accelerate portfolio-wide efficiency upgrades that generate immediate utility savings, and customers only pay for verified avoided energy.
Given the limited corporate investment dollars available for energy efficiency, Redaptive’s EaaS program provides its customers with upfront capital for retrofits, data transparency to validate project savings, and resources to execute multi-site roll-outs programmatically with minimal involvement from customer staff. By generating a positive free cash flow on day one, the platform acts as a foundation for future investments in both resource efficiency and smart building innovation.
By accelerating investments in energy efficiency, focusing on unlocking immediate savings returns and working with clients to align interests, Redaptive has generated approximately 423 million kWh of saved energy to-date (April 2018).
HOW THIS MODEL BENEFITS CLIENTS, SERVICE PROVIDERS AND OUR PLANET
EaaS allows customers to meet sustainability goals faster, transfer risk and responsibility, and get the savings expected with transparent measurement. Customers can upgrade large portions of their real estate portfolio through a streamlined contracting process, unlocking savings that immediately contribute to their bottom-line.
This streamlined contracting process integrates multiple companies’ services together to holistically address customer pain points and make the initial offering much more attractive. They can, among other benefits, tap into new sources for data and improve established business process.
Given the scale of such innovation, it would be virtually impossible to keep up without the added benefit of actively forming partnerships or alliances with vendors and service providers to really understand how the technology can best be utilized in the physical environment.
The new digital world demands more active engagement. Illumetek has always benefited from working in conjunction with our clients and partners to build and maintain mutually beneficial relationships that understand changing priorities, provide value services and ensure peace of mind.
One of the concerns that can arise is when customers call with technical issues, it can be challenging to determine where the fault points lie in a partner platform. But Redaptive has done a fantastic job crafting SLAs that clearly define issue resolution and escalation protocol that all parties have agreed to, while never allowing the customer to be shuttled between parties. They spare the customer the complexity of navigating the partner ecosystem that is the key to enterprise level scalability.” – Erin Plivelich, President, Illumetek
This fully integrated model is a solution that allows for immediate and verified savings. It’s a win-win for those who want to increase efficiency, but do not have the capital or resources available to do so.
Many companies, like Aramark and McKesson, have already found success by embracing Redaptive’s non-traditional approach to enable portfolio-wide upgrades.
Redaptive has been integral to the success of McKesson’s energy management program over the last two years and a key strategic partner as we work to reduce our company’s carbon footprint. Their unique model has enabled us to accelerate and scale our energy efficiency program, leading to real-time savings throughout our facilities.” – Michael Huaco, Senior Vice President of Global Real Estate at McKesson Corporation.
The San Francisco-based company is now looking to expand to new customers across the industrial, manufacturing, retail, and healthcare sectors. Arvin Vohra, Redaptive’s Co-CEO is confident the company can help others “break down the barriers to large-scale efficiency by transforming the way buildings consume energy, and collectively working toward a low-carbon society one saved kilowatt hour at a time.”
That’s a goal we can all agree is one worth working towards.