Stopping climate change is the number-one mission of Carbon Lighthouse, an energy efficiency company that helps commercial buildings save as much energy as possible to curb carbon emissions. But, the leadership also firmly believes that persuading people to care about the climate isn’t necessarily the easiest way to get there.
“Our belief is that it’s too slow to win hearts and minds to accomplish this,” says CEO Brenden Millstein. The faster way is to stress the money it’ll save for businesses. “That’s the only way to scale up largely enough, quickly enough, to matter,” he says.
Specifically, Carbon Lighthouse saves building owners money through optimizing building systems so they waste less energy. That’s achieved through a network of sensors that feed data to the company’s custom-made software—called CLUES (Carbon Lighthouse Unified Engineering System), the winner in the AI and data category of Fast Company’s 2020 World Changing Ideas Awards—that then makes recommendations on how to best tweak systems to save landlords money and, ultimately, reduce carbon emissions.
The focus is on commercial properties. Many of these building owners are real estate investors with huge portfolios, who can save millions of dollars—and stop hundreds of tons of carbon dioxide from being released into the atmosphere. “You can’t stop climate change without tackling commercial and industrial buildings,” Millstein says. Since the company’s conception in 2010, Carbon Lighthouse’s interventions have eliminated the equivalent of 11.5 power plants (classified as 150 megawatt, single-cycle turbine, natural gas plants) worth of power. “So, 49,988.5 left to go,” Millstein jokes.
Back in 2010, things looked a lot less straightforward for Millstein and his cofounder, Raphael Rosen, who were best friends growing up, and later physics lab partners at Harvard. They each pooled $5,000 to start the business, and made 1,000 initial calls to find a first client, before signing their first contract (with a friend of a friend of a friend of a friend). That contract stipulated that Carbon Lighthouse would take the hit if the promised energy savings did not come to fruition—and that financial risk clause has remained in every contract ever since. If those savings aren’t reached, Millstein says, “we write a check to cover the difference.”
As the company grew, Millstein and Rosen were able to spend a little more money on better sensors and software, and a data science and engineering team that would scrap the need for the 300MB Excel files they’d been using to capture their project data. Now, with the polished flow process, the method is something like this: the company installs sensors in the building, which gather 16 types of data, including electrical flow, air temperature, air and water pressures, and lighting levels. The collected data streams up into the cloud, and the CLUES software analyzes it, making recommendations for saving energy. Some could be one-off changes, such as equipment replacement, but 80% of the improvements are ongoing optimizations that occur in real time, and which, on average, have reduced energy in buildings by 10% to 30%.
At One Biscayne Tower in Miami’s financial district, Carbon Lighthouse works with the owner, L&B Realty, which represents a total of $9 billion in assets. One of the biggest changes was with the optimization of the heating and cooling system in the 674,000-square-foot building. The sensors are continually collecting data from the ceiling fans, pumps, chillers, and cooling towers. Based on the settings for the particular building, slight adjustments are made to these building systems every five minutes. If people are congregating in a room, that room’s fan is automatically turned up, and pumps elsewhere are turned off, because they’re not being used. When people move into other rooms, or the weather changes, say, it’ll make a new automatic adjustment.
“I don’t know that my tech team loves it when I describe things this way,” Millstein says, “But, basically, we have built a $50 million software platform to turn things slightly up and down every five minutes.” But the impact is enormous: L&B will save $500,000 in total, and the equivalent of 142 tons of carbon dioxide (which Millstein says is like planting six Yankee Stadiums’ worth of trees every year).
Of course, the robots don’t solve everything alone. The team relies on people who’ve occupied the building for years and decades and have incomparable experience. “To assume you could get all of that knowledge from a sensor that reads temperature is pretty ludicrous to me,” Millstein admits. Plus, tenants move in and out, and new occupants require different wants and needs, which have to be met with new optimizations and models. “So, the ‘set it and forget it’ approach is utterly useless,” he says.
While cost savings have been the way to reach clients drives, for Carbon Lighthouse’s ultimate goal of fighting climate change, Millstein says it’s no longer strictly a choice between two benefits. The optimization can be incredibly profitable for clients and beneficial for the environment.
“I think there’s this false dichotomy that you can either do things that are good for the planet or good for the pocketbook,” Millstein says. That harmony is becoming more of a reality now that clean energy is cheaper than fossil fuels; between 2009 and 2017, prices decreased by 76% for solar panels and 34% for wind turbines. “That’s exciting,” he says. “In terms of clean energy adoption, we’re in year six or seven of that curve. It’s a pretty fun place to be.”