Parity's HVAC technology platform can drive significant energy efficiency improvements and greenhouse gas reductions in residential buildings through energy-as-a-service (EaaS), its co-founder says.
Toronto-based Parity, led by co-founder and CEO Brad Pilgrim, targets the mid-rise, high-rise and hotel markets with its products.
It was formed from a desire to find an “economical way for buildings to adopt right hardware and pair that with something that acted like a team of engineers running around your building 24/7” using software, according to Pilgrim in an interview with SustainableBiz.
After Pilgrim saw fees go up in the condo where he used to live, he observed HVAC optimization that was not “being capitalized in a smart way.”
“I saw an opportunity in the residential market for a smart way to structure paybacks for energy efficiency, coupled with a service to increase the utilization of the hardware and then back it with data," he said. "We knew it would be a challenging but resilient asset class and really just decided to go after it.'
The built environment contributes approximately 40 per cent of the world’s greenhouse gas emissions and HVAC is a major power consumer in a building. Pilgrim said by reducing HVAC energy load, buildings can get more energy efficient, decrease their carbon footprint and reduce energy bills.
The EaaS platform
The Parity EaaS platform, known as Pi Platform on the customer-facing side, is cloud-based software that optimizes a building’s HVAC system through learning about data points like energy-use patterns, weather and occupancy. Software algorithms control the HVAC system and adjust heating and cooling in real-time to improve efficiency.
To acquire data, control hardware is installed onto the building’s HVAC system. The hardware can provide insights into processes from the chiller and cooling tower, make-up air, boiler and domestic hot water.
Pilgrim said the EaaS is compatible with off-the-shelf control hardware installed onto HVAC systems. As a result, it does not rely on proprietary hardware nor does it have to send teams of technicians to every building to install hardware.
“We’re able to control things in real-time and ultimately be able to operate all of the equipment in the building using our platform 24/7, 365 (days) at the most efficient level possible,” he said.
It also offers alerts to pre-emptively warn the building owner about HVAC problems and sends a monthly report to track energy and money savings on a dashboard.
Parity claims its EaaS can achieve 15 to 30 per cent more energy-efficient HVAC operations and make it anywhere from 30 to 60 per cent cheaper to operate.
On the greenhouse gas side, Pilgrim said the technology can cut a building’s annual carbon footprint by 30 per cent to 50 per cent.
In a press release, Parity says its system has helped cut 5,500 metric tons of carbon dioxide emissions to date.
Targeted real estate markets
Parity currently operates primarily in the Greater Toronto Area and New York City. It has over 150 assets in Canada and services over two dozen New York-based apartment buildings.
Pilgrim said the company’s focus is on urban markets with a high density of mid-rise and high-rise buildings facing high utility rates and high energy intensity driven by weather.
Government policy is pushing Parity’s business forward with laws like New York City’s Local Law 97 that mandates stricter targets for energy efficiency and greenhouse gas reduction in buildings.
“A lot of the urban centres that are dealing with high utility rates, extreme energy demand need energy reduction, they are starting to put a lot of policies in place that actually are changing the behaviour and forcing owners to reduce the energy consumption of their assets,” said Pilgrim.
The company says adopting the Parity EaaS can substantially raise the value of a building as well. For a rental company and portfolio that operates under a capitalization rate, it helps reduce the operating expenditure and increases net operating income.
A building with a five per cent capitalization rate would receive $20 in benefit for every $1 saved, according to Pilgrim. In other words, saving $50,000 per year on energy would add an additional $1 million in asset value to the building.
Funding for expansion
RET Ventures, a real estate technology venture fund based in Utah, gained an interest in Parity because it was a company “driving outcomes” unlike most of the market, according to Pilgrim.
“There’s lots of companies monitoring, measuring, showing where buildings were at, where energy efficiency was at, but very few companies were actually driving outcomes and had a lot of data in a portfolio to prove it.”
Pilgrim made contact with Canadian sub-metering company Wyse through a friend, leading to a meeting with the CEO of Wyse and the investors on its board. That led to talks about how Parity could help improve performance at buildings employing the Wyse system.
Parity intends to use the $8 million to springboard its U.S. and Canadian expansion, while refining its product and scaling the company.
There are plans to penetrate cities with “good policy, high utility rates and high energy intensity.” He specifically named New York City, Philadelphia and Boston as its U.S. targets, with the later goal of the southern and western areas of the U.S.