Commercial Buildings
November 29, 2023—Money is often the obstacle that keeps both building owners and occupiers from embracing clean energy upgrades. Tallarna hopes to change that through its “Decarbonization-as-a-Service” offering, which guarantees the performance of clean energy technologies and uses a shared savings model to raise private finance to fund the works.
“If you can say to the building portfolio owner, technology provider, finance provider, and end occupier, ‘We will guarantee not just the performance outputs of decarbonization works, but the resulting financial outputs,’” said Tim Meanock, CEO and co-founder of Tallarna. “They jump at that chance.”
Headquartered in the United Kingdom, Tallarna works with both commercial and multi-family residential building owners and occupiers, technology providers, and financial service providers on the clean energy transition. The company’s software links decarbonization project outputs to a unique performance insurance. It does this by analyzing a range of project measures, assessing how much these measures will save, and modelling their risk profile as maps to the underwriting criteria of Tallarna’s insurance partner. Tallarna can then raise money against the income streams this policy underpins to fund the works.
While building owners and occupiers pay to access the newly installed clean energy technologies, their lower utility bills and maintenance costs offset that expense, with the net savings shared between parties. Essentially, they get the economic benefits of decarbonization without the risks of ownership or initial capital outlay. It is the perfect example of how “as-a-Service” models are being deployed outside of the traditional business-to-consumer streaming market.
“Large building owners and occupiers come to us, often through their technical advisors,” Meanock said. “We take the data from their buildings and put it into our software. We can then validate the proposed clean energy methods and explain how much they will save, the likelihood of underperformance, and the amount of private finance they can access, before connecting them to our performance insurance and funding partners through our software. It’s all fully transparent.”
Tallarna’s ultimate goal is to make the shift to clean energy a no-brainer by showing potential users the difference to their bottom line. The backing of a global tech company and an insurance company confirms the power of their model. In the UK, Tallarna’s focus to date has been low-to-moderate income (LMI) housing. Here, they scope and unlock savings of hundreds or thousands of dollars a year that help both fund the works and lift tenants out of financial difficulty.
“Our ability to guarantee project savings in kilowatt-hours and their conversion to dollars limits the financial contribution required from the building owner—with the money instead coming from private finance. At the same time, we ensure the occupier is left better off from day one,” Meanock said. “We help these parties work together by acting as their translator. Funders, for example, require an ESG (environmental, social, and governance) outcome with a net financial benefit. So, our software predicts and helps guarantee these metrics. This enables the funder to invest the money the building owner needs, which in turn helps tenants get the energy bill savings they need.”
Tallarna was operationally launched in 2019, with co-founder Meanock bringing a background in property investment, financing, and analytics. Another co-founder came from strategic real estate consulting. Together, they composed a technology team with experience of creating software-led risk and performance models. Uniting these different disciplines and areas of expertise, Tallarna was formed, focused on ensuring that green efforts will actually deliver verified, green outcomes.
“There is a natural link between building engineering and financial valuation,” Meanock said. “We’ve put more science behind this connection, incorporating energy performance uncertainty into our building-physics led assessments. This enables us to understand the distribution of decarbonization project savings and use that to inform financial decisions.”
Tallarna joined the Wells Fargo Innovation Incubator (IN2) program in 2021 for Cohort 8 but has been working with the National Renewable Energy Laboratory (NREL) since its inception, repeatedly collaborating with the lab to test beta versions of their software.
“We started out using a more rudimentary format for modeling building upgrades,” Meanock said. “We knew that our software had untapped potential, and we wanted to extend our analysis of the technologies driving the marketplace. Our work with NREL has undoubtedly achieved this.”
The company has focused on several key clean energy measures with NREL, including battery energy storage systems (BESS). And as a result, Tallarna has generated business in both Europe and the U.S.
“The amount of experience and knowledge NREL has is incredible,” Meanock said. “But it’s their great processes that sets them apart. The lab provided us with a first class way to take our software to the next level, and they coupled this with market references.”
Meanock says the progress Tallarna is making with BESS performance modelling and guarantees will move the company out of the startup category and into a more mature place.
“We started in LMI housing and now we’ve expanded to the commercial and industrial sector,” he said. “We’re currently working on a global rollout programme for BESS using our unique software-led risk analytics and integrated insurance, with a significant contract in the U.S. starting early next year. We’re launching this initiative in partnership with a blue-chip systems integrator under an ‘Equipment-as-a-Service’ model, a natural extension of our already proven ‘Decarbonization-as-a-Service’ offering.”
Whatever the path forward, Meanock knows NREL will be a major part of it.
“The clean energy transition relies on partnerships between forward-thinking companies and research institutions. Our enduring collaboration with NREL will continue to make clean energy adoption the financially smart choice—turning it into the default, not the exception,” he said.
