Geothermal utility Diverso Energy LP has its sights set on expanding its low-carbon heating and cooling system beyond Ontario's Golden Horseshoe area to Western Canada and the U.S.

The Toronto-based company designs, builds, owns and operates geothermal assets with a focus on multi-family residential buildings. It currently services approximately 30 buildings under its energy-as-a-service (EaaS) business model.

“We’re trying to simplify that geothermal experience,” Jon Mesquita, Diverso COO and co-founder, said in an interview with Sustainable Biz Canada. “We want people to think of us in the same way they would any other utility.”

Serving over 7.5 million square feet of buildings in its portfolio, Diverso’s projects include Lillian Park in Toronto, Saw Whet Condos in Oakville and the Garment Street Condo in Kitchener. The company is partnered with developer Camrost Felcorp on the Exchange District project in Mississauga, where Diverso will be playing a critical role in North America’s tallest geothermal-powered condominium.

EaaS can work in almost any Canadian geography and could be expanded beyond residential buildings, he added.

Diverso’s foundation

Founded in 2015, Diverso provides a technology called geoexchange, which uses the ground beneath a building as a thermal battery. The building’s heat is extracted and transferred to the ground during the hotter months as a form of cooling. In the colder seasons, the stored heat is taken from the ground and circulated throughout the building.

Diverso focuses on mid- to large-sized multi-family buildings such as condo and rental towers — the “low-hanging fruit” for its service, Mesquita said.

Under EaaS, it aims to remove barriers for developers in implementing geothermal heating and cooling in their buildings. Diverso is the builder, owner and operator of the system, while the developer does not incur a cost. The cost is paid by the building owner over a 30-year contract that involves monthly charges via sub-metering of unit owners or tenants.

The use of its geoexchange has offset over 10,500 tonnes of carbon dioxide by eliminating the use of natural gas-powered equipment, the company said in an email to Sustainable Biz Canada.

Its acquisition in 2023 by infrastructure fund CVC DIF has kickstarted the transition “from three guys who are bootstrapping the company” to “creating a sophisticated machine that can ultimately transform the development industry across North America,” Mesquita explained.

Based in Amsterdam, CVC DIF is a global infrastructure fund with over US$19.5 billion in assets, part of private markets manager CVC that holds US$216.3 billion of assets under management.

Diverso’s growth plan

Being acquired by CVC DIF has given Diverso access to a pool of capital that can fuel its growth in North America, Mesquita said.

Since the change in ownership, Diverso has become a vertically integrated business with its own construction team. A fleet of 10 drilling rigs and a team of approximately 50 employees ensures Diverso can be a one-stop shop for geothermal energy, covering a range of services such as project management, design and execution.

Armed with the financial resources and in-house construction team, Diverso is exploring beyond multi-unit residential buildings into office, institutional, educational and industrial buildings. Retrofits are also another area of interest.

Geographically, Alberta and British Columbia are two provinces Mesquita specified for potential expansion. The development growth opportunity plus the policies and markets that encourage green technology such as green building codes are push factors.

“The key thing is that we’re looking for markets that have the same buying signals or key catalyst characteristics that would make this technology and our business model attractive for the development community,” he said.

Alberta is a “natural extension” for Diverso because it has staff in Alberta and the province’s oil industry is a source of talent in drilling. Diverso, Mesquita said, is repurposing the oil workforce for a new, greener technology.

Parts of the U.S. are also a possibility, Chicago and the West Coast as examples provided by Mesquita. Another benefit of the acquisition by CVC DIF is assisting Diverso in the regulatory hurdles of a U.S. expansion, even with the enormous uncertainty from promised tariffs on Canadian goods and the hostile atmosphere to clean energy from the Trump administration.

High expectations for geothermal heating and cooling

An admitted headwind for Diverso is the overall slump in the real estate market, Mesquita said. But what he is not seeing impacted heavily is the movement toward low-carbon buildings. Many developers in the Golden Horseshoe are still in talks with Diverso, he added, buoyed by its proven technology, track record and the backing by a multibillion-dollar fund like CVC DIF.

Mesquita believes once there is more stability in real estate after the sector recovers from a period of decades-high interest rates and more certainty is reached regarding the tariffs, it will not be out of reach to see 75 to 80 per cent of multi-family residential buildings in the Golden Horseshoe using geothermal technology in the near future.

For now, Diverso will continue to enlarge its drilling capability and hire to meet the expected demand for its geothermal service.