May 23, 2022

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BlocPower gets big push from Microsoft to convert old buildings to green energy

BlocPower gets big push from Microsoft to convert old buildings to green energy

In a four-story apartment building in Brooklyn, New York, a very small company is implementing a very big idea: electrify every building in the United States by renting the owners the equipment needed to make the transition.

BlocPower is a Brooklyn-based startup that has “greened” more than 1,200 buildings in New York City and has similar projects in twenty other cities. Using the lease-to-own platform, it offers landlords and homeowners green heating and cooling systems, electrical appliances, and solar panels. Installs equipment and manages its maintenance. The owners make monthly payments that cover these costs and provide returns to the investors.

The company reports that it has reduced energy costs in buildings by 30% to 50% and reduced greenhouse gas emissions by 40% to 70% on existing projects. It says it could reduce greenhouse gases in the United States by up to 25% in 10 years and restore up to 30% of millions of dollars in wasted energy.

“I know what’s inside these buildings, right? So I can see the investment opportunity,” said Donnell Bird, CEO of BlocPower, who grew up in Brooklyn. “My job as CEO is to make it transparent to potential climate investors.”

“We will reduce the amount of oil, gas and fossil fuels these buildings consume, and reduce the amount of emissions generated,” Baird said. “We’re going to save building owners money, and hey, you’re actually going to make 10% financial returns by investing in these buildings.”

BlocPower is powering this building in Brooklyn, New York

Lisa Rizzolo | CNBC

In the basement of a Brooklyn building, Bird made his way through a network of old wires and towed old systems, including old boilers and carbon-emitting gas lines.

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“We look at this and say, ‘Oh my God, this is a great opportunity to save the planet and make a little money by focusing on what’s out there, right?'” Baird said.

BlocPower leases equipment for 10 or 15 years, and after sufficient funds are taken to pay off investors and BlocPower to collect its fees, ownership of the equipment is transferred to the building owner.

The company is behind the first plan devised by a US city – Ithaca, New York – to become completely net zero by 2030. It starts with the city’s building inventory.

“When we started working together to develop this program, we realized it was possible,” said Luis Aguirre-Torres, director of sustainability for the city of Ithaca. “You know, it’s not just about being the first city in America, in the whole world to completely decarbonise. It’s really about showing that that’s possible.”

“If you work on climate change, you think this is possible; and you always think about the ways in which you can influence this,” Aguirre-Torres said. “The reality is that the technology didn’t exist a few years ago and the financial innovation needed just didn’t exist a few years ago.”

Early backers of BlocPower include Andreessen Horowitz, Exelon, American Family Insurance and the Schmidt Family Foundation, Goldman Sachs Urban investment, Kapoor Capital and sales force. Then in January I got a huge injection of debt Microsoft, bringing its total funding to about $100 billion. I just received a $5 million grant from the Bezos Earth Fund to digitally map approximately 125 million buildings across America so that each of those buildings will have a free plan of how to become environmentally sustainable.

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The company is now negotiating with several cities in California, New York, Massachusetts and Georgia for decarbonization.