Lumen Energy, a San Francisco-based startup, has successfully concluded its Series A funding round, securing $11 million in investment. This funding will facilitate the expansion of their innovative clean energy financing product for commercial building owners, addressing the significant economic and carbon reduction potential inherent in the widespread adoption of solar and batteries in U.S. commercial buildings.
Led by climate tech investor Ajax Strategies, the funding round also saw participation from investors Lowercarbon Capital and Designer Fund, alongside prominent real estate companies Nuveen and Bridge Investment Group. Concurrent with the fundraising effort, Lumen Energy unveiled its latest financing offering, Auto PA. This new product is designed to provide tailored financing solutions for individual buildings within a commercial real estate portfolio, effectively serving as a marketplace connecting building owners interested in clean energy projects with potential financiers.
Lumen Energy’s co-founder and CEO, Peter Light, who previously contributed to energy projects at Google’s X, noted that their original platform has already processed numerous properties, gaining the trust of clients that include commercial real estate firms such as Hines, Bridge Investment Group, and Tishman Speyer. The challenge in deploying solar and batteries in commercial buildings lies in the complexity and need for manual customisation, as not all structures are economically suited for these technologies. Factors like location, building type, roof condition, utility arrangements, and more play pivotal roles in determining the return on investment (ROI), with marginal internal rates of return (IRRs) at 3%, good ones at 10%, and exceptional ones at 12%.
On a broader scale, the U.S. possesses an untapped potential of 145 GW in unused commercial solar capacity, while commercial buildings contribute to 16% of the nation’s greenhouse gas emissions. The endeavours of Lumen Energy hold significant promise in addressing both economic and environmental challenges within the commercial real estate sector.