When Carbon Lighthouse first launched two years ago, it focused on the cost savings of energy-efficiency analytics, followed by retrofits. Even though everyone likes saving money, the message fell relatively flat.
“We used to just talk about the money. We thought we should hide our environmental ethos,” said Brenden Millstein, CEO of Carbon Lighthouse. “It worked terribly.”
The problem was not that the executives Carbon Lighthouse met with were spendthrifts, but rather that they were always bombarded by new companies promising huge savings by using the latest technology.
Carbon Lighthouse does promise technology that can save money, but algorithms are not all it offers. The San Francisco-based startup has a two-step process that begins with engineers that take deep measurements of a building, then follow that up with sophisticated analytics that optimize performance and produce a roadmap for retrofits that will make the building as close to carbon neutral as possible. “Our goal is not just energy efficiency,” said Millstein, “but to reduce energy use on site as much as possible.”
Engineers first install data loggers all over the building, collecting data on light, temperature, humidity, currents, fan speeds, carbon dioxide levels and much more. All of the information -- usually more than a million data points -- is distilled into a thermodynamic model that looks at a building at both a micro and macro scale.
“Our goal is not analytics,” Millstein added, “it’s project development.” Carbon Lighthouse does not rely on interval meter data, although the firm will take that into account if it’s available. Instead, the data analytics are free to clients, and the real aim is to produce significant savings. Millstein claims his company can often deliver that at half the market rate of other energy retrofit firms.
As for the cost efficiency, he said that the level of data, down to a valve position at a compressor, is one key. “We can see in color when everyone else is in black and white.” Also, data in and of itself is not enough. He noted that one million data points might be too much if you’re not getting what’s valuable and what’s not. But most companies rely too much on interval data and are still collecting too little data, according to Millstein. “There’s a sweet spot that lets you figure out what’s important and what’s not.”
Carbon Lighthouse makes its money from project completion, usually based on the percentage of savings. To get from identifying problems to solving them takes a team of partners, including large building control firms such as Johnson Controls or Trane,solarfirms, investors, LED companies and demand response providers.
The reams of data produced by Carbon Lighthouse’s approach allow them to find efficiencies where others do not. A chiller could be up to 30 percent more efficient just by changing the settings, said Millstein, and then those savings can be used to fund other projects or to compete for allowances in carbon markets.
Funding can be a challenge, but it has never been a barrier. “We really couldn’t care less what the issue is,” said Millstein. “If there’s a barrier we need to solve it.” For companies without the upfront capital, Carbon Lighthouse offers an efficiency power purchase agreement. The company also has various capital partners in its network to tap for different projects.
There is no one model to achieve savings. Millstein said that a client can dictate what it needs, whether it’s a payback in a certain amount of years or a particular carbon footprint reduction to meet its sustainability goals.
To deliver on the promise of a completed project at a lower cost than competitors, Carbon Lighthouse is focused on midsize commercial and industrial customers with a median of about 75,000 square feet. About two-thirds are office spaces, and there are also schools, industrial sites and hospitals among the 80 or so projects the company has completed.
Smaller projects, like a 2,000-square-foot restaurant, won’t work for Carbon Lighthouse’s approach. But in most cases, “as long as there’s central HVAC, we have yet to go in and not find worthwhile opportunities,” said Millstein. He noted there are plenty of buildings that are underserved by big companies like Siemens or Honeywell, but are still big enough to reap significant savings.
Competitors abound in every individual part of a project, from optimizing an HVAC system to finding rooftop solar panels. Millstein said that many partners might also be competitors, but added, “there is no other company that makes it profitable and easy to be carbon-neutral.”
As for Carbon Lighthouse, it is employee-owned, and Millstein said his two-year-old company is profitable. Projects are currently in California and Oregon but Millstein got started in this space in New York City, where he worked for a government program that helped high-rise office buildings to increase efficiency in chillers.
From chillers to full buildings, part of the secret sauce isn’t so secret at all: project management.
“That’s 80 percent of the work,” said Millstein. “Our analytics are very good, but it’s only a small component.” Providing a comprehensive approach, which also means that executives have a single retrofit, rather than an endless string of projects, has been a huge selling point. “You only need to think about it once and focus on it once.” Of course, the contract still comes with a measurement and verification component.
As individual equipment grows more efficient, systems-level integration becomes crucial for a far greater level of efficiency, according to a study from the American Council for an Energy-Efficient Economy.
For now, Carbon Lighthouse is focusing on expanding in the West and eventually back to the East Coast, and is not worried about other competitors in the wide market. There are many other startups getting into the small commercial space, such as SCL Elements and EnTouch. There are also retrofit and analytics companies, like Gridium, SCIenergy, SkyFoundry, and Retroficiency, to name a few. Noesis is another company interested in giving away data to spur larger retrofits. But for Carbon Lighthouse, it’s keeping an eye on the much bigger picture, from each kilowatt-hour to the larger energy landscape.
“We’re looking at whole solutions for every cent of energy use in a square foot,” said Millstein. “We have only one competitor, and it’s coal.”