Logical Buildings Raises $110M for Energy-as-a-Service Move

Logical Buildings, a DBA for Energy Technology Savings that deploys IoT devices and uses data to improve building energy efficiency, announced a $110 million investment from Keyframe Capital to back an energy-as-a-service initiative.

“Energy-as-a-service (EaaS) is a business model whereby customers pay for an energy service without having to make any upfront capital investment,” says non-profit research institution Resources for the Future. “EaaS models usually take the form of a subscription for electrical devices owned by a service company or management of energy usage to deliver the desired energy service.”

Honeywell recently announced that it had invested an unspecified amount in energy-as-a-service company Redaptive to bring the latter’s capabilities to private sector-owned commercial and industrial buildings.

The Logical Buildings and Keyframe Capital project, which they call a virtual power plant facility, isn’t the generation of power but rather the provision of “reputational and financial incentives” to “thousands” of multifamily operators to “invest in initiatives that will drive energy savings, lower greenhouse gas emissions, and establish new channels for grid services revenue.”

The funding “will be repaid through energy savings and grid revenue, establishes a channel for deploying energy transition projects in the large, previously untapped multifamily housing market at a time when many operators seek solutions to comply with upcoming emissions reduction and energy efficiency regulations,” the companies say.

The funding lets operators install smart thermostats “which integrate with Logical Buildings’ two proprietary demand response platforms.”

Those are GridRewards, an app and system that tells operators when and how to reduce energy usage, and SmartKit, which uses a building’s energy data to monitor energy usage and avoid carbon penalties. SmartKit typically involves Logical Buildings’ consulting services.

We make money providing our services to owner/operators to decarbonize the built environment utilizing project funding backed by Keyframe,” Logical Buildings CEO Jeff Hendler tells GlobeSt.com. “This decarbonization upfront capital funding can be repaid through a combination of energy savings and grid revenue (demand response).” The use of SmartKit and & GridRewards software products can “establish a channel for deploying energy efficiency capital improvements in multifamily buildings at a time when the real estate owner/operator community is focused on complying with ESG initiatives and upcoming carbon emissions regulations such as Local Law 97.”

Local Law 97 is a New York City emissions reduction law that requires building owners to comply with reduction requirements or face stiff fines.

Hendler says that the grid revenue is cash payments from the wholesale energy grid and Con Edison “for providing them load reductions according to tariff rules and participation requirements.” He continues, “Logical Buildings is registered aggregator with wholesale grid and retail utility to provide DER services – distributed energy resource services.”