Austin startup Noesis Energy will announce Thursday that it’s lined up four companies that will offer loans and other financial packages to help building owners pay for technology upgrades that will save them energy and money.
Noesis plays the matchmaker by bringing together building owners, project developers and financing companies. The startup, founded in 2011, has created software and an online portal that serves as a virtual meeting place. The four financing companies are BluePath Finance, Metrus Energy, TIP Capital and Vireo Energy.
To use Noesis’s service, building owners or managers sign up and enter information about their buildings, such as their size and the amount of energy used each month, and receive basic but free reports regularly that show energy consumption trends. The report also can compare energy use among buildings they own or manage. Noesis charges a fee for providing more detailed analyses, which show what kind of savings they might achieve by selecting among different energy reduction plans. Noesis also helps building owners measure the results of carrying out those plans.
“From Noesis you have folks in house that are looking at these projects from both the technical and economic standpoint,” said Ross Reida, vice president of national accounts at TIP Capital.
Noesis began to offer the free report service last fall, a clever strategy that enables Noesis to build up a list of properties from which it could use to generate revenues. That list has grown from 4,400 buildings covering 380 million square feet last September to over 21,000 buildings spanning around 1.2 billion square feet today. The types of buildings on the list include hotels, colleges, restaurants, and high tech companies. Some of those building owners have properties in different cities or even states and are looking for a more effective way to track and cut their energy use.
That list helped Noesis attract the four financing providers, who pay Noesis for generating investment opportunities. The financial packages they provide include conventional loans, leases and one that is structured to allow building owners to pay back the money they borrowed when they pay property taxes (the loan is an added line item on the property tax bill).
Noesis’s role isn’t just to hand over the list of building owners and their proposed projects. It has built into its software a set of criteria for assessing the feasibility of energy efficiency projects.
Banks and other investors, as well as building owners, often consider green tech projects to be risky because of the new technology involved and a lack of standards for screening and rating projects to see if they are feasible and able to generate good returns. While some of the energy efficiency projects involve not-so-high-tech solutions such as new boilers and air conditioning systems, others use technologies that weren’t so common five years ago, such as LED lighting and the software for finely adjust its brightness and energy use.
“The reason the financing process is so complicated and time consuming is because there isn’t a standard protocol to do the appropriate math,” said Scott Harmon, CEO of Noesis. “The gap we are trying to fill is a 3rd-party platform for the underwriting of projects.”
Some of the criteria the startup is using come from organizations that have developed industry-accepted standards, such as the International Performance Measurement and Verification Protocol by the Energy Evaluation Organization. The protocol has been used by companies that carry out energy efficiency retrofits for government agencies and academic institutions for years.
The energy efficiency projects that Noesis is involved in come from private businesses, who often don’t want to use their cash to pay the expensive upfront cost of the retrofits and aren’t able to pass bonds for building improvements. Private businesses tend to expect a quicker payback for their investments than do government agencies. The median payback period for a private business is three years but eight years for public agencies, according to the Lawrence Berkeley National Laboratory. The lab has tracked the energy service market for over 15 years.
Noesis has raised $14.5 million in venture capital to date. Its investors are Black Coral Capital and Austin Ventures.
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