Buildings have a surprisingly high impact on energy use and carbon emissions. In fact, almost 40% of energy usage in the U.S. is due to buildings. Many commercial property owners and developers are interested in making their buildings more energy efficient and environmentally friendly, but many struggle to find cost effective capital to cover these projects. The frustrating part? There are billions of dollars that are freely available in green incentives and financing across both the private and the public sector, but they are hard to find and tap.
EnerYields, is a resource that helps connect property owners to incentives and discounted financing options to fund green initiatives, accelerating the transition to sustainable buildings. In this episode, we talk to EnerYields’ Founder Hetal Parekh about how her company bridges the financing gap. She educates us on the types of grants, incentives, and financing methods that are available for green building projects. Hetal also shares the three step process that building owners should use to evaluate and transition their buildings. This is a great story of breaking down technical complexity to drive sustainable change.
JJ (the host of The Understory Podcast): Welcome to The Understory Podcast. Understory is a global community and platform that works with innovators and innovative companies that are trying to make our world more sustainable.
Today, we're really excited to have Hetal Parekh, who is the founder of EnerYields to join us to talk about what she's building. Hetal, welcome to The Understory Podcast. Tell us a little bit more about your background and EnerYields.
Hetal Parekh: Hi, thanks for having me here. A little about me: I am an architect and a building energy scientist, so my expertise lies in the commercial real estate and energy efficiency policies as they relate to it. I'm extremely passionate about working on climate equity as it relates to the built environment.
I completed my doctorate in the same space in 2019 and worked for several years on projects which were focused on different aspects of building performance and energy optimization for the commercial real estate sector. And then last year, I founded EnerYields, which is the company that I'm working on right now, which is a climatetech platform that helps connect real estate owners and developers to a cost effective financing solution for their properties.
JJ: In terms of EnerYields and based on your experience, tells us more about the company, the product, and who you're selling to. Why is there a problem? What is the product providing to those end customers?
Hetal: Through the course of my PhD, I realized that everybody knows saving energy in your buildings or in your houses would mean that you would have lower energy bills. It makes sense in the long run financially. But not a lot of people undertake these projects, so there were clearly a lot of hurdles that existed out there which were inhibiting building owners, homeowners, etc., from taking energy efficiency projects and becoming more energy efficient. I started EnerYields with the intention of overcoming some of these hurdles.
The statistics say that 90% of commercial property owners in the US struggle to find cost effective capital and what a lot of people do not know is that there are billions of dollars that are freely available in green incentives and financing across both the private and the public sector. I started EnerYields with this intention of bridging this gap and being able to overcome this hurdle of forced cost by connecting property owners with free money or below market rate loans to be able to go green. This is a way they can get to their sustainability targets faster while still being profitable on the 1st bottom line.
JJ: For our audience, tell us a little bit more about what are green incentives? What are the below market financing? Some of these are terms that perhaps people like you who are in the industry like really understand. A lot of the real estate developers or owners may have heard these terms. The carbon market and financing market for green technologies are rapidly changing as well. If you don't mind, tell us a little bit more about what are the green incentives or what are some of the types of below market financing that are out there.
Hetal: Today, if you were to go buy a house, you would try to get a loan and a mortgage on the property, which is a conventional loan that exists out there. But if you are to carry out any green upgrades, like say switch to more energy efficient fixtures, or improve the overall energy efficiency of your building or house, there are a lot of other options that exist out there for you.
The government gives you money in forms of grants to do this. There are a lot of grants available out there for small businesses. Even for multi-family buildings, to be able to go green and then your utility company so your electricity or your gas provider, they are usually giving out a free money that will pay for some of your upgrade cost that would cover 60 to 70% of the cost of your new lighting fixtures. These are utility rebate programs that are available.
There are also tax incentives and credits available for buildings to go green where you can essentially write off portion of your taxes if you have done any energy efficiency or renewable energy work for or in your building.
Now these are the most common ones that exist out there, but there are also 12 different types of financing methods that exist for green projects. Some of them are conventional, very straightforward, like how a regular loan would work. Some of them are specialized financing. CPS, for example, is a method of financing your project where you get 100% of your entire project cost covered up through financing and you pay back this money through your property taxes. It is actually a line item that gets added onto your property taxes, and you just have an annual payment to make towards it.
Our database captures 12 of these different types of financing that exists across both the private and the public sector, and we collect a lot of granular information on all these different programs. We save users a lot of time on going through the fine print and understanding whether they're eligible for a project and give them a lot of answers at their fingertips.
JJ: From an architect perspective, you talk about green buildings. There are new constructions, there are building upgrades or retrofits, and you're talking about lighting fixtures and utilities. For building developers, whether those are smaller or even bigger properties?
Where should they start Hetal? Is it thinking about the design of the building? Is it really thinking about kind of the guts of the building? Is it more about the things that people continuously need to use? The HVAC or appliances or water or lighting, et cetera? Where would you start if you were advising people about building green buildings? Upgrades and then come to EnerYields to find the kinds of financing or resources that will help them to potentially accelerate how they transition to green building.
Hetal: A process for going green can be broken down into three steps. First, is measure up. If you have a lot of utility companies now when your bill comes in, it benchmarks your energy use as compared to other buildings of the same size, type, make. That really shows you whether your building is consuming a lot more energy and how much potential do you have to reduce your energy use. I would say that is the first step. If you identify that you know you're building is just taking in a lot more energy.
Then the next step is to identify what needs to be fixed. Either your building is too old, and your systems haven't been updated in like say 20 years, 30 years. You may have some clues as to what you want to work on. I would say that is the right point at which you come on to the EnerYields platform and see what is the universe of financing that is available for you for the upgrades that you need to carry out to be more energy efficient.
JJ: Excellent, OK. What might be some of the challenges that you see in the industry right now for buildings to transition to green. Is it still regulation? Is it access to capital? Is it elimination of different vendors that are providing green technologies? What are some of the challenges that you see?
Hetal: I would say the biggest challenge right now, apart from the technical complexity of it all, is that there is no standardization, so it can sometimes get so overwhelming for a building owner to go through a huge variety of options which have a lot of technical requirements. If I ask you today: what is your lighting power density and how much can you reduce it by? This is just too complex for a building owner to understand and to grasp.
And then secondly all this information is extremely fragmented right now. Today if I want to find out how can I upgrade my building. Google is going to be at best random. I'll have to run Google searches. I'll have to do the calculations manually on Excel, and I would have to go through tons of documents to even understand what works for my property and what does not work for my property.
We are trying to simplify that entire process. You should not get bogged down by technical complexity. You should not get bogged down by the amount of time that it would take to get the answers. We don't want you to go through those challenges. We make it extremely simple to arrive at the answers that will help you go green.
There's been so much of policy push around buildings to now become greener and more sustainable that it is only apt that building owners have a resource that can help them get to their targets in a more easy or in a user friendly manner.
JJ: Great, so last question. Has EnerYields launched and where can people find more about EnerYields and perhaps try out the product?
Hetal: If you are in Pennsylvania, our product is live in Pennsylvania and can be accessed through our website which is https://www.eneryields.com/?
If you're anywhere else in the US, you can still fill out the survey on our home page and our specialist will get in touch with you to give you get you the specific information for your building.
JJ: Do you plan to go to other states as well?
Hetal: Absolutely, yes. We started off running a beta in Pennsylvania and we are expanding very quickly to get to nationwide.
JJ: Hetal, thank you so much for joining us at The Understory Podcast. And if you want to check out more about The Understory Podcast, you can go to our website. Hetal will also join us on Slack to answer some of your questions, and we'll also have more information about EnerYields as well.
Hetal, thank you so much for talking to us about EnerYields. And congratulations on launching and scaling this.
Hetal: Thank you, thanks for having me here. Absolute pleasure.