Climate Tech

The Adoption for Building Sustainability Continues to Lag

To learn more on how we can scale technologies focused on decarbonizing the built environment, JT sat down with Kate Frucher, co-founder and managing director of The Clean Fight, the first growth-stage clean energy accelerator backed by New York State, through its energy agency NYSERDA.

John Thomey
John Thomey
Jul 1, 2021
The Adoption for Building Sustainability Continues to Lag
🔒 Member-only content. 🔒
OR

Whether in policy circles, among silicon valley types, or even now on Wall Street, the demand for climate innovation feels to be at all-time highs. But does that feeling of progress mean we see results in the adoption of new building technologies that will reduce the climate footprint of the built environment? 

Estimates indicate buildings, infrastructure, plus their construction account for roughly 40% of U.S. carbon dioxide emissions. To learn more on how we can scale technologies focused on decarbonizing the built environment, I sat down with Kate Frucher, co-founder and managing director of The Clean Fight, the first growth-stage clean energy accelerator backed by New York State, through its energy agency NYSERDA.

Kate shared her insights on why innovation in clean energy is in the early innings and how we can continue to push adoption in the space. She also shared insights into where she’s room for growth in proptech sustainability. 

One of the things I appreciated about our conversation was how incredibly complicated and expensive innovations in building systems remain. The expertise to innovate and grow businesses in this sector is incredibly high. Scaling technologies in the built world also takes a different magnitude of resources compared to software products. Below is a snapshot of The Clean Fight’s first cohort to give you a feel for how specialized this technology is:


The below transcript has been edited for clarity and brevity.

JT: Kate, thanks so much for taking the time to chat. Maybe to kick things off, you could share a bit on what The Clean Fight is and your focus areas?

KF: High level, we are a pretty new accelerator program. We fund growth stage clean energy and efficiency startups. We fund and support startups with a goal of decarbonizing but also boosting economic opportunity and job creation. 

NYSERDA supports us. We're also part of a cool group that you should know about called New Energy Nexus. New energy nexus used to be known as the California Clean Energy Fund. They worked alongside the California Energy Commission in California to help build the energy innovation ecosystem out there for years. 

A couple of years ago, they rebranded to New Energy Nexus, an international nonprofit that supports diverse, clean energy entrepreneurs with funds, accelerators, and networks worldwide, particularly with a focus in Southeast Asia. We're in something like 12 company countries, and I think that's an interesting element. The idea was let's take the learnings and go to the front lines of the climate crisis and make sure that we're inciting innovation activities everywhere.

But anyway, back to us in New York. What I think makes us unique and different first is our focus on growth-stage companies. Other than Elemental, which has a development track, there aren't many other entities out there focused on companies at the growth stage.

We define growth stage as companies ready to deploy at scale, so we source globally for companies with proven technologies. We don't take tech risk, and there needs to be clear market uptake already in our barometers, roughly a million in revenue. Some companies are well past that. Some haven't quite gotten there but have really strong tailwinds pushing them close to that metric.

It's the idea that these aren't ideas that might work. We are focused on ideas that have already been proven. And so we are the next step for companies that come out of the early demonstration, early deployment, requiring a robust ecosystem of innovation of an accelerator.

We help companies get to the next level by focusing on the adoption gap: how do we help customers and close the adoption of these technologies? The core part of our program is we source relevant customer partners, and after deep diligence, we do in-depth matchmaking.


It's not a one-time introduction. We bring in what's usually like 10 to 12 customer partners introduce everyone, and then work in the background over six months to broker what we hope will be meaningful business agreements.  

We then have grant capital of a million dollars (250K per cohort) to help defray the costs and de-risk deployment of new technologies. Let's say that the stars don't align right away; the corporates are in a great spot to do everything from broader sets of introductions to just unvarnished feedback because they go in and their engineers kick the tires. They can say what they need to do to get to that point if they aren't there yet.

We also do a lot of work that we thought was going to be background, but it proved to be really helpful when we did our first cohort, which was helping with local market knowledge. We do an in-depth needs assessment of each company's needs, and then we provide them with up to 25K  of paid technical support. So we don't do a cookie-cutter curriculum. 

Most companies, most accelerators are very broad, but I felt like a lot was lost by not focusing more on a particular vertical. Each of our cohorts is narrowly focused. Our first one was largely tilted towards Class A commercial buildings. We're now doing a second cohort focused more on the mass market of buildings, so multi-family and smaller commercial buildings.

Through this approach, you get a lot of synergies. We found that the companies can also begin to work as a bundle. They can be channel partners for each other, sometimes the OEMs for each other. And a lot of what I think the market needs are these more bundled, turnkey solutions.  There are also just really interesting network effects within the corporates. You have people all working in these big entities fighting many of the same fights internally because they're big complex organizations, and they can help each other with strategy and sharing know-how.

Most importantly, I don't think you make good decisions when you're trying to diligence technologies if you don't have a deep bench of evaluators who are deep in a particular space. That was my pet peeves coming in. I'd be asked to be on these panels and looking at all these different types of technologies that I knew nothing about. So we make sure that there's a real depth of expertise. So looking at the companies coming in, so we're making smart decisions on complicated technologies they are deploying. 

JT: You mentioned your work's regional aspect and shared expertise and how that also connects with sales and a channel partner strategy. I'm just curious are there any big regional energy market or climate trends that you're keeping your eye on?

KF: Yeah. A lot of what is happening in New York is right now being driven by Local Law 96. 

[Local Law 96 establishes long-term, low-interest Property-Assessed Clean Energy financing to fund upgrades to building energy and water efficiency. Source ]

A whole set of local laws were part of something called The Climate Mobilization Act, which the NYC City Council passed in the spring of 2019 that set important and aggressive standards around decarbonizing buildings.

New York City is a city that, in general, cares about climate, but it also has gone through a powerful economic shock. Real estate is one of the industries that's borne the brunt of COVID's economic impact. So I think it's important to watch because it's also a politically powerful group.

Even before Local Law 97, many Class A commercial building owners were paying attention to sustainability goals to attract the top tenants. Commercial Tenants are now looking at the sustainability of buildings, so if you want to attract the best tenants, you have to be concerned about it. 

I also think they're driven by all the ESG (Environmental, Social, and Governance; factors investors are modeling for risk increasingly) money out there. Many of these organizations are REITs. In the Class A space, there's a lot of positive pressure on the real estate industry. 

The trend that you're going to see is on the other side of the real estate industry, which is what will happen to the mass market of buildings, and multifamily buildings. Those are the parts of the sector that you have to decarbonize. They're the biggest emitters and very fragmented. They run on much smaller margins and don't have these robust, built-out sustainability teams like Class A landlords.

There's also a lot of benefit to retrofitting older buildings because you not only improve the de-carbonization landscape, but you also can improve the health and safety of the buildings. It's a real job creator. Will there be a movement to begin to bundle and create turnkey solutions? It's very hard for any individual landlord to vet all the companies knocking at their doors to improve efficiency on the various components of buildings like the boiler, the cooler, the windows, the roof, the installation.

A lot of them want to be told: "this is the best course, and here's your incentive to do it." We haven't made it easy enough to scale. In the building space, I think that's the opportunity. Can we come up with turnkey solutions and an easy roadmap?

JT: Could you maybe get in the weeds about some of the technologies your cohort companies are working on?

KF: We're at a point where smart technologies like building management systems can be used for every building and should be used for every building. This kind of innovation has many advantages in terms of comfort and cost savings, and increasingly de-carbonization. 

Two companies that we've worked with that I think are best in class. One is called Enertive. The other is called 75F. Enertive is in New York focused more on bigger buildings, and 75F is Minnesota-based and focuses on smaller buildings (neither are exclusively focused, though).

The building management systems space because software generally is incredibly crowded, and it's been very hard for building owners to see inside the black box of technology. Like what makes mine, or what makes this one better than the other one?

There's a lot of room for certain players to come out as the real winners in the space and hopefully take the market through the signaling programs like our send, where we've done deep diligence for those companies. We've worked with Peak Power out of Canada, which has a battery component to it. Fundamentally, if buildings can shave off usage during peak times and smooth out the energy curve, it's a real win on many different levels. Being able to manage your energy use and not have everybody using it simultaneously is another critical piece.

JT: My last question: what do you want to call out to the UrbanTech readers that they should know about The Clean Fight or your work in cleantech?

KF:  I will say that one of the things that we notice, and you started with this a little bit, is there is a lot of momentum, and there are a lot of stars aligning right now in this sector. Many states, the federal government, and I see more and more investors coming into the space, but adoption is still lagging. 

You see all this potential, and there's a lot of talk about momentum. Still, the actual purchasing is not keeping up, so I think that's what we have to keep our eye on, what will covert into people buying these technologies. EVs are the place where you can see it beginning to happen more and more because it's going mainstream, but we still haven't reached it yet.

We need to figure out how the infrastructure of chargers so that consumers can get over the range anxiety, and you have to figure out the siding and the city policies and all of that. In many other sectors, it's the same, just that we feel like a wave is building, but the wave in one certainly you can't surf yet. We have to start understanding what's getting in the way of purchasing habits. That's the next big challenge for us all to look at. 

JT: That makes sense; well, I'd love to stay in touch as you find more insights into the adoption curve and continue finding companies in this space.

KF: Thanks, John. I look forward to building a relationship, and thanks for everything you're doing.

Whether in policy circles, among silicon valley types, or even now on Wall Street, the demand for climate innovation feels to be at all-time highs. But does that feeling of progress mean we see results in the adoption of new building technologies that will reduce the climate footprint of the built environment? 

Estimates indicate buildings, infrastructure, plus their construction account for roughly 40% of U.S. carbon dioxide emissions. To learn more on how we can scale technologies focused on decarbonizing the built environment, I sat down with Kate Frucher, co-founder and managing director of The Clean Fight, the first growth-stage clean energy accelerator backed by New York State, through its energy agency NYSERDA.

Kate shared her insights on why innovation in clean energy is in the early innings and how we can continue to push adoption in the space. She also shared insights into where she’s room for growth in proptech sustainability. 

One of the things I appreciated about our conversation was how incredibly complicated and expensive innovations in building systems remain. The expertise to innovate and grow businesses in this sector is incredibly high. Scaling technologies in the built world also takes a different magnitude of resources compared to software products. Below is a snapshot of The Clean Fight’s first cohort to give you a feel for how specialized this technology is:


The below transcript has been edited for clarity and brevity.

JT: Kate, thanks so much for taking the time to chat. Maybe to kick things off, you could share a bit on what The Clean Fight is and your focus areas?

KF: High level, we are a pretty new accelerator program. We fund growth stage clean energy and efficiency startups. We fund and support startups with a goal of decarbonizing but also boosting economic opportunity and job creation. 

NYSERDA supports us. We're also part of a cool group that you should know about called New Energy Nexus. New energy nexus used to be known as the California Clean Energy Fund. They worked alongside the California Energy Commission in California to help build the energy innovation ecosystem out there for years. 

A couple of years ago, they rebranded to New Energy Nexus, an international nonprofit that supports diverse, clean energy entrepreneurs with funds, accelerators, and networks worldwide, particularly with a focus in Southeast Asia. We're in something like 12 company countries, and I think that's an interesting element. The idea was let's take the learnings and go to the front lines of the climate crisis and make sure that we're inciting innovation activities everywhere.

But anyway, back to us in New York. What I think makes us unique and different first is our focus on growth-stage companies. Other than Elemental, which has a development track, there aren't many other entities out there focused on companies at the growth stage.

We define growth stage as companies ready to deploy at scale, so we source globally for companies with proven technologies. We don't take tech risk, and there needs to be clear market uptake already in our barometers, roughly a million in revenue. Some companies are well past that. Some haven't quite gotten there but have really strong tailwinds pushing them close to that metric.

It's the idea that these aren't ideas that might work. We are focused on ideas that have already been proven. And so we are the next step for companies that come out of the early demonstration, early deployment, requiring a robust ecosystem of innovation of an accelerator.

We help companies get to the next level by focusing on the adoption gap: how do we help customers and close the adoption of these technologies? The core part of our program is we source relevant customer partners, and after deep diligence, we do in-depth matchmaking.


It's not a one-time introduction. We bring in what's usually like 10 to 12 customer partners introduce everyone, and then work in the background over six months to broker what we hope will be meaningful business agreements.  

We then have grant capital of a million dollars (250K per cohort) to help defray the costs and de-risk deployment of new technologies. Let's say that the stars don't align right away; the corporates are in a great spot to do everything from broader sets of introductions to just unvarnished feedback because they go in and their engineers kick the tires. They can say what they need to do to get to that point if they aren't there yet.

We also do a lot of work that we thought was going to be background, but it proved to be really helpful when we did our first cohort, which was helping with local market knowledge. We do an in-depth needs assessment of each company's needs, and then we provide them with up to 25K  of paid technical support. So we don't do a cookie-cutter curriculum. 

Most companies, most accelerators are very broad, but I felt like a lot was lost by not focusing more on a particular vertical. Each of our cohorts is narrowly focused. Our first one was largely tilted towards Class A commercial buildings. We're now doing a second cohort focused more on the mass market of buildings, so multi-family and smaller commercial buildings.

Through this approach, you get a lot of synergies. We found that the companies can also begin to work as a bundle. They can be channel partners for each other, sometimes the OEMs for each other. And a lot of what I think the market needs are these more bundled, turnkey solutions.  There are also just really interesting network effects within the corporates. You have people all working in these big entities fighting many of the same fights internally because they're big complex organizations, and they can help each other with strategy and sharing know-how.

Most importantly, I don't think you make good decisions when you're trying to diligence technologies if you don't have a deep bench of evaluators who are deep in a particular space. That was my pet peeves coming in. I'd be asked to be on these panels and looking at all these different types of technologies that I knew nothing about. So we make sure that there's a real depth of expertise. So looking at the companies coming in, so we're making smart decisions on complicated technologies they are deploying. 

JT: You mentioned your work's regional aspect and shared expertise and how that also connects with sales and a channel partner strategy. I'm just curious are there any big regional energy market or climate trends that you're keeping your eye on?

KF: Yeah. A lot of what is happening in New York is right now being driven by Local Law 96. 

[Local Law 96 establishes long-term, low-interest Property-Assessed Clean Energy financing to fund upgrades to building energy and water efficiency. Source ]

A whole set of local laws were part of something called The Climate Mobilization Act, which the NYC City Council passed in the spring of 2019 that set important and aggressive standards around decarbonizing buildings.

New York City is a city that, in general, cares about climate, but it also has gone through a powerful economic shock. Real estate is one of the industries that's borne the brunt of COVID's economic impact. So I think it's important to watch because it's also a politically powerful group.

Even before Local Law 97, many Class A commercial building owners were paying attention to sustainability goals to attract the top tenants. Commercial Tenants are now looking at the sustainability of buildings, so if you want to attract the best tenants, you have to be concerned about it. 

I also think they're driven by all the ESG (Environmental, Social, and Governance; factors investors are modeling for risk increasingly) money out there. Many of these organizations are REITs. In the Class A space, there's a lot of positive pressure on the real estate industry. 

The trend that you're going to see is on the other side of the real estate industry, which is what will happen to the mass market of buildings, and multifamily buildings. Those are the parts of the sector that you have to decarbonize. They're the biggest emitters and very fragmented. They run on much smaller margins and don't have these robust, built-out sustainability teams like Class A landlords.

There's also a lot of benefit to retrofitting older buildings because you not only improve the de-carbonization landscape, but you also can improve the health and safety of the buildings. It's a real job creator. Will there be a movement to begin to bundle and create turnkey solutions? It's very hard for any individual landlord to vet all the companies knocking at their doors to improve efficiency on the various components of buildings like the boiler, the cooler, the windows, the roof, the installation.

A lot of them want to be told: "this is the best course, and here's your incentive to do it." We haven't made it easy enough to scale. In the building space, I think that's the opportunity. Can we come up with turnkey solutions and an easy roadmap?

JT: Could you maybe get in the weeds about some of the technologies your cohort companies are working on?

KF: We're at a point where smart technologies like building management systems can be used for every building and should be used for every building. This kind of innovation has many advantages in terms of comfort and cost savings, and increasingly de-carbonization. 

Two companies that we've worked with that I think are best in class. One is called Enertive. The other is called 75F. Enertive is in New York focused more on bigger buildings, and 75F is Minnesota-based and focuses on smaller buildings (neither are exclusively focused, though).

The building management systems space because software generally is incredibly crowded, and it's been very hard for building owners to see inside the black box of technology. Like what makes mine, or what makes this one better than the other one?

There's a lot of room for certain players to come out as the real winners in the space and hopefully take the market through the signaling programs like our send, where we've done deep diligence for those companies. We've worked with Peak Power out of Canada, which has a battery component to it. Fundamentally, if buildings can shave off usage during peak times and smooth out the energy curve, it's a real win on many different levels. Being able to manage your energy use and not have everybody using it simultaneously is another critical piece.

JT: My last question: what do you want to call out to the UrbanTech readers that they should know about The Clean Fight or your work in cleantech?

KF:  I will say that one of the things that we notice, and you started with this a little bit, is there is a lot of momentum, and there are a lot of stars aligning right now in this sector. Many states, the federal government, and I see more and more investors coming into the space, but adoption is still lagging. 

You see all this potential, and there's a lot of talk about momentum. Still, the actual purchasing is not keeping up, so I think that's what we have to keep our eye on, what will covert into people buying these technologies. EVs are the place where you can see it beginning to happen more and more because it's going mainstream, but we still haven't reached it yet.

We need to figure out how the infrastructure of chargers so that consumers can get over the range anxiety, and you have to figure out the siding and the city policies and all of that. In many other sectors, it's the same, just that we feel like a wave is building, but the wave in one certainly you can't surf yet. We have to start understanding what's getting in the way of purchasing habits. That's the next big challenge for us all to look at. 

JT: That makes sense; well, I'd love to stay in touch as you find more insights into the adoption curve and continue finding companies in this space.

KF: Thanks, John. I look forward to building a relationship, and thanks for everything you're doing.

The Adoption for Building Sustainability Continues to Lag

John Thomey

John Thomey is a founder of Urban Tech, a newsletter and podcast. He’s a graduate student at the University of Southern California, studying Public Policy and Urban Planning.

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