Kontrol CEO Paul Ghezzi,  (Courtesy: Kontrol Technologies)

Kontrol Technologies, a smart energy solutions provider, has launched its own carbon credit monetization program.

The company’s energy management technology allows buildings to save energy, with a corresponding reduction in greenhouse gas emissions. Kontrol tends to target any building over 40,000 square feet.

Part of its solutions includes its SmartSuite tech, which delivers in-suite energy management and real-time control of any HVAC system through a proprietary Internet of Things (IoT), wireless and cloud-based technology.

The company’s goal is to produce one carbon credit for each ton of GHG avoided. The carbon credit can then be produced without the need for local utility incentives and monetized in voluntary carbon offset markets.

The carbon credit potential

“Our thesis in 2016 was that buildings would be the next sector – following the renewable energy boom that we just experienced – where governments would start to focus in terms of emission reduction,” said Paul Ghezzi, Kontrol’s CEO. “So we were a little early, but you have to be early to be in the game.”

Citing the American Council for an Energy Efficient Economy (ACEEE), Ghezzi said medium-size buildings — those less than 50,000 square feet in area — represent a significant amount of the commercial building stock in the United States. They represent 94 per cent of the country’s commercial buildings, 50 per cent of its total building square footage and 44 per cent of electricity use.

Yet only 13 per cent of small- and medium-sized buildings have a building automation system.

The Taskforce on Scaling Voluntary Carbon Markets, sponsored by the Institute of International Finance with support from McKinsey, estimates the market for carbon credits could be worth upward of $50 billion by 2030.

“What we’re doing with our carbon credits platform is, where we can, we’re taking those emission reductions and turning them into monetizable carbon credits based on verifiable energy savings over a period of 10 years,” said Ghezzi. “And we look to aggregate a large number of those and package them off to the voluntary market.”

The aggregation is done to ensure the carbon credit is attractive for buyers, but Ghezzi says there’s no hard-and-fast line as to how many credits are needed. That will change depending on the size of the portfolio.

The first aggregation will be in Ontario, but the company is also targeting the U.S. and “a few other regions.”

Kontrol signs new agreement

Kontrol recently signed a multi-year agreement to employ its technology in 18 additional Ontario buildings. The company doesn’t publicly identify its customers for “industry competitive purposes,” but Ghezzi said the buildings are owned by a REIT and are larger than 40,000 square feet in size.

The typical duration of an agreement is around two to three years. The hope is that the technology will constantly improve alongside the improvements to building energy efficiencies, so the three years are not set in stone. Ghezzi said one of the firm’s longest agreements is 10 years.

Ghezzi has been at Kontrol for six years and said he’s seen significant forward momentum during the past year.

“This year is the first year I’ve seen all the tailwinds coming together for sustainability. So things like stakeholder activism, corporate sustainability targets, that net-zero 2050 government infrastructure Biden just announced,” Ghezzi said. “Then, really, you have the energy and utility costs. If you put all that together, I really think buildings are going to be tackled as the next major infrastructure play.”

That momentum is also paying off for Kontrol. August of this year saw the company announce record revenues of $6.5 million.