Impact Investment Group, which targets investments with positive social and environmental outcomes, has taken a stake in start-up energy services provider nu-tility for its potential to disrupt the local real estate energy efficiency market.
IIG, controlled by Berry Lieberman and Danny Almagor , is also behind Small Giants, which invests in the Nightingale Housing movement, among other innovative plays.
nu-tility, according to its managing director Daniel Barber, is Australia’s only fully integrated service provider. So where one company may do energy audits, and another solar and lighting, HVAC, or provide power purchase agreements, nu-tility aims to provide the whole suite of energy services in one package to clients in the industrial warehouse, aged care, health and education sectors, among others.
The main reason this is the way to go, Barber says, is because buildings and facilities are complex beasts, and upgrading one area, say lighting, may impact upon another, such as HVAC. Going to a range of different providers therefore may lead to cross-over and a sub-optimal outcome.
“We take a step back and look at it as a whole to get the best outcome,” he told The Fifth Estate.
The outcome of this approach depends on the client and the services chosen, but the goal is reduced capital and operational costs for landlords and tenants. Where integrated services are not required, clients are able to choose products and services individually.
Most of the work performed by the company is done in house, including project management, energy auditing and financing, though some specific requirements that necessitate complex technical solutions may be outsourced.
For example, one developer wanted to look at converting a parcel of land into 13 warehouses, however there was no energy supply available to the property without expensive grid augmentation. It was a difficult problem, but was solved by an energy storage engineer engaged by nu-tility. The company also says it is “supplier agnostic”, so there’s no contracted relationships, with the best product chosen for the client at the time.
According to Barber, a lot of start ups get to a point where they cannot grow in the way they require without a capital injection. The funds from IIG will “increase deployment and add diversity”, and will primarily be invested in systems and adding capability to software, as the company is highly software-focused.
He says the company is also looking at a further capital raising down that track to enable it to invest in a full retail licence, which will “close the loop” and allow it to become a supplier for all energy solutions.
Apart from the capital injection, IIG is providing nu-tility with access to its real estate portfolio.
IIG chief executive Chris Lock says his experience working with nu-tility previously made it a “no-brainer” to partner.
“nu-tility has a national footprint, working across all aspects of energy efficiency and are effectively a one-stop-shop for any landlord or tenant looking to drive down building costs and emissions,” he says.
“When we upgraded our Quiksilver distribution facility in Geelong, our experience with nu-tility was seamless and highly cost-competitive, so it is a no-brainer for us to partner with this fantastic new company by providing them access to our entire real estate portfolio. We are very excited to be both a client and a cornerstone shareholder of nu-tility.”
nu-tility will also have access to IIG’s $100 million solar fund, which is 50 per cent debt funded by the Clean Energy Finance Corporation. The fund will play a key role in nu-tility’s long-term strategy to deploy large commercial solar PV systems under power purchase agreements.
Barber says a number of different sectors are engaging his company, though there is particular interest among commercial and industrial warehouses, aged care, health and education, and even some work on major infrastructure projects. Less busy is the office sector, which is now being built highly efficiently.
There is only a small staff at nu-tility, but Barber says the company has been purposefully built lean, because as the energy efficiency industry is highly technology-focused successful businesses need to remain highly agile to ensure that the best and most up-to-date solutions are offered.