The Canada Pension Plan Investment Board is investing $200 million in Energy-as-a-Service provider Redaptive to help businesses with energy generation and efficiency programs.
Redaptive funds and installs energy equipment to help organizations reduce energy waste, cut costs, and lower carbon emissions while addressing their sustainability goals. Existing investors Linse Capital and CBRE also are participating in the financing, and Redaptive expects a second round of financing to close in early 2023.
The company’s Energy-as-a-Service (EaaS) platform provides businesses with data-driven energy generation and efficiency programs that include renewable energy, electric vehicles, HVAC systems, lighting, and other upgrades. The service can be installed at large sites or across real estate portfolios, and Redaptive funds the upfront costs to help companies with financial and logistical barriers that may occur while planning for energy transitions.
EaaS is seen as an important tool for lowering emissions and increasing clean energy transitions. EaaS models often take the form of a subscription for electrical devices owned by a service provider to manage and deliver energy. They are primarily used for energy efficiency platforms, and increasingly for options like subscribing to solar energy.
A report by UnivDatos Markets Insights over the summer of 2022 says the EaaS market is expected to grow at a 13.4% annual clip through 2027. The analysis says the commercial segment of the EaaS market is expected to grow at the fastest rate during the forecast period.
Last year a Guidehouse report found that the EaaS market could be valued at more than $66 billion by the end of the decade. The EaaS market is especially driven by sustainability goals and energy resilience needs.
The Canada Pension Plan Investment Board, which is headquartered in Toronto with offices across the world, says its investment in the EaaS programs is to help businesses reduce energy consumption and greenhouse gas emissions, especially across real estate portfolios. The board says it supports its vision of investing in companies that support energy transitions.
San Francisco-based Redaptive says it has increased its bookings of EaaS by more than 100% year-over-year in 2022. The Canada Pension Plan Investment Board’s Sustainable Energies group has net assets across the global energy market totaling nearly $22 billion, with investments in renewable energy, utilities, and power generation.