Sizing the Market Opportunity for Angel Investment, Venture Capital and Private Equity for Energy Efficiency

Transcription

1 Sizing the Market Opportunity for Angel Investment, Venture Capital and Private Equity for Energy Efficiency CCM Energy ACEEE Energy Efficiency Finance Forum May 12, 2014

2 Who We Are A Washington, DC-based clean energy investment firm launched in late 2012 to pursue two objectives: Invest in high-growth companies with a proven solution to green the built environment Deploy clean energy solutions on CCM s real estate portfolio to lower operating costs, improve performance and increase value Part of the CCM Group, a privately-held investment and asset management platform that includes CCM Real Estate, investing in commercial real estate on the East Coast, and CCM Puerto Rico, a full-service real estate development and management company 2

3 What We Do Core Strategy Invest expansion capital into companies with a proven solution in distributed generation, energy efficiency and green construction Act as a value-add strategic investor, accelerating the growth of our portfolio companies by: Offering project capital in addition to corporate financing Providing access to our own large portfolio of buildings Leveraging the deep market knowledge and relationships of our colleagues in CCM Real Estate and CCM Puerto Rico Employ flexible deal structures, including debt, to balance risk-reward and provide optionality to management teams 3

4 Portfolio Companies Airside efficiency company with unique technology platform and suite of software tools Leading residential solar photovoltaic ( PV ) installer in the US Provider of componentized, energy-efficient buildings with short assembly times and significant savings relative to traditional construction Provider of solar PV and solar hot water solutions to commercial buildings Global provider of solar energy systems to residential customers 4

5 US Market Opportunity $240 Billion Total Market Opportunity in US non-residential buildings if 75% of buildings are refurbished Source: Credit Suisse Equity Research Themes in Energy Efficiency Research. April

6 Competitive Landscape Opportunities Policy incentives and tighter building codes Only 20% of potential energy savings in buildings have been realized Business model & financing innovation Technological advancements: Big data analytics Reduced cost of real time monitoring and verification Virtual audits Internet of things Challenges Upfront capital costs Misaligned tenant-owner financial incentives Owners limited knowledge about efficiency opportunities and effectiveness Energy efficiency projects seen as non-core Lenders willingness to change, comfort with new financing offers 6

7 Who Will Win? Source: Groom Energy s Enterprise Grid Report 7

8 Food for Thought The jury is still out on whether energy efficiency will capture any meaningful share of venture capital investment going forward, despite the large opportunity Can this sector consistently deliver category killers that can give an investor a 10x return or will many smaller winners emerge in a highly fragmented space? Technology vs. business model who wins? Exits is the fact that there are a clear, finite group of potential acquirers a benefit or a drawback? With capital efficient business models and a need for project capital, who needs venture investors? 8

9 Thank You For more information: 9

10 Appendices 10

11 The Future Drivers 60 billion sf of new buildings will be added to the US building stock over next two decades, a 23.3% increase (1) More than 50% of construction is expected to be green focused, up from 10% in 2009 and 30% in 2012 (2) Opportunities for innovation Technologies, materials or processes to improve energy efficiency or serve as substitutes for more polluting materials Rising global energy supply concerns Catalyst for efficiency 41% of 3,000 respondents in 2013 Johnson Controls annual survey stated energy management is extremely important to their firm. 72% of orgs with set goals indicated plan to increase EE spending Growing opportunity for energy management professionals to evaluate demand response, energy efficiency measures and distributed generation as a portfolio of energy reduction measures Source: (1) Architecture 2030: (2) McGraw Hill (quoted in credit Suisse report) 11

12 Investment Criteria No material technology or product risk $3-$5 million target investment size Must have satisfied, paying customers, >$5M revenue and pathway to EBITDA positive in months Profitable now or realistic path to Cash Flow breakeven within 18 months Company provides a solution which CCM s real estate portfolio and relationships can help scale 12