On the heels of expanding our growth round by an additional $32.6 million, we’re excited to share our latest achievement in our quest to stop climate change: Carbon Lighthouse has been awarded a full patent from the U.S. Patent and Trademark Office for the Carbon Lighthouse Unified Engineering System, or CLUES®, the workhorse software platform that allows us to provide an ongoing energy service that makes it profitable for building owners to reduce carbon emissions.
Earlier this year, Fast Company selected CLUES® from a pool of over 2,000 entries in the AI + Data category of the 2019 World Changing Ideas Awards.
Ignoring everyone else
When we founded Carbon Lighthouse, nothing like CLUES existed in this industry — and it was obvious that existing solutions weren’t working because they weren’t designed with the explicit goal of removing carbon emissions from the built environment.
For example, Energy Service Companies (ESCOs) make recommendations to replace large equipment, typical energy consultants get paid by and are selected by utilities, maintenance firms may promise savings but their contract deliverable is well-maintained equipment, and yet they buy power wholesale and sell it more cheaply than utilities.
None of these firms has the contract deliverable of reducing wasted energy and turning it into guaranteed profit for the building owner. Rather than trying to imitate others in the industry whose contracts were not aligned with the environmental benefit we wanted to achieve, we worked toward gaining a better understanding of how buildings use energy from the ground up, finding the best ways to cut energy consumption cost-effectively.
This meant deploying sensors throughout buildings to capture 1000x the amount of data than industry standard and developing our own thermodynamics and statistical models to help us make decisions for how buildings use energy in real time. Other firms’ various approaches were designed to meet their needs and contract deliverables – equipment installed, or maintenance delivered, or a dashboard presented to a property manager — but Carbon Lighthouse is built with the audacious goal to end climate change. Because of that, we’re the rare company that invested in resources and support for our team to go figure everything out from scratch.
We focused on the bigger challenges necessary to stop climate change, rather than following the benchmark set by industry, and we created a new revenue model that made more sense for our clients. And figuring it out for ourselves has paid off big.
We’re the only company in the efficiency-as-a-service industry with the ability to provide guaranteed profits for building owners and investors through ongoing energy management.
Digging into our technology
To identify energy-saving measures, one first needs to understand how a building uses energy and how energy use changes based on the way building systems – like heating, ventilation and air conditioning (HVAC) or lighting – are configured. Carbon Lighthouse achieves this understanding through accurate models for energy consumption based on current and alternate configurations of mechanical/electrical systems in the building, that are fed data continuously measured on site by Carbon Lighthouse sensors.
The current industry software packages for modeling energy consumption in a building primarily work in a “top down” approach in that first an energy use estimate is created for the whole building based on window area, wall area, insulation type and thickness, etc., and then that energy use estimate is divided up among the equipment in the building.
Because there are hundreds or thousands of inputs regarding physical building characteristics — and almost none of them are feasible to measure accurately after a building is constructed — there are thousands or tens of thousands of ways to make the model “match” reality by altering the input values (i.e., the building characteristics). But only one set of building characteristics are the real characteristics, which means even though tens of thousands of configurations might match past utility bills, only one will accurately predict what will happen moving forward. With the current industry methods, the models used to make energy consumption “predictions” for various configurations and optimizations of building systems fail to accurately predict energy savings because the “baseline” model doesn’t reflect how the building is actually operating day-to-day.
With CLUES, we don’t encounter this problem. We’ve created a method of modeling building energy consumption based only on parameters that can be quickly and cost-effectively measured in a building after it has been constructed, and that do not rely on inaccurate estimates or rules of thumb. The result is Carbon Lighthouse being able to scalably take on the complexity and variability of building equipment and quickly handle the custom configurations we encounter at each new property we enter.
A shift in the industry
CLUES is a central component of our ability to provide a different kind of service contract to our clients. It allows us to do two things very differently from everyone else:
The first is simply our contract deliverable. The rest of the software industry offers a software dashboard, sometimes including recommendations on ways to cut energy use. Our contract deliverable is a guaranteed amount of dollar savings. This is the difference between Consumer Reports and Uber: Consumer Reports might recommend you buy a Camry as a reliable car, and Uber will pick you up in a car and drive you to work. Both are valuable services, and they are incredibly different. With CLUES, we deliver guaranteed, ongoing financial value across every building in the portfolio, boosting portfolio value by $3 to $10 per square foot (depending on cap rates). Traditional ESCOs, for example, can’t work in buildings smaller than 200,000 square feet. We’ve worked profitably in buildings as small as 20,000 square feet. Across a 10mm square foot portfolio, we boost profit for the building owner by $30,000,000 to $100,000,000.
The second major difference is how we deliver on our contract. The reason we’re willing to tackle such an ambitious contract deliverable is directly tied to our mission. We’re an environmental company. We exist to stop climate change. That’s not going to happen with software alone, it’s not going to happen with recommendations, and it’s certainly not going to happen if savings decline over time – it requires continued action to ensure energy savings (and profits for clients) persist year after year.
Stopping climate change will only happen when it is highly profitable and easy for organizations to reduce their emissions, and CLUES helps make it easy and highly lucrative for our clients to cut their energy costs.