CEO Puja Balachander
Alison Wong visits UpGreen, a new startup that supports commercial tenants and their landlords to work together to decarbonise their buildings at low to no cost to them.
Within the British Government’s commitment to reaching net zero, most commercial or non-residential buildings must have an EPC rating of at least C in the next five years. The Energy Performance Certificate monitors the energy efficiency of the building – from energy loss to inefficient heating or venting systems. As the UK estimates around 18% of commercial properties are presently in the EPC F and G rating brackets, many UK landlords may risk stranded assets and lost returns.
Landlords and tenants are stuck in the middle
Landlords are caught between the risk of stranded assets and high retrofit costs as limited legislation helps commercial landlords out of this challenging position. Landlords must put their finances into potentially expensive retrofits if they are unable to let their properties fall under EPC C in the next five years.
Tenants are also finding pressure to pursue net-zero strategies with rising costs. Facing tight margins, utility expenses and energy bills have increased by 250%. With landlords with little incentives to make retrofits out of pocket, tenants might have fewer options that might raise prices.
Decarbonising commercial buildings at no cost
That’s where UpGreen fits in, a new startup that supports commercial tenants and their landlords to work together to decarbonise their buildings at low to no cost to them. CEO Puja Balachander and CTO Feras AlSaab are a second-time co-founding team behind UpGreen. Balachander, a climate tech investor and Oxford MBA, and AlSaab, an engineer and data scientist by background with a PhD in Materials Science. From their first startup to UpGreen, they bring advanced solutions to commercial landlords in the UK.
Balachander thought up the idea of UpGreen after listening to a podcast of a US Founder creating a marketplace for retrofit projects that would generate carbon credits. She found that corporations would pre-buy carbon credits, and the building owners use that funding to make retrofits. The carbon credits are issued based on realised energy/carbon savings.
Balachander found that the best way approach was to identify the high ROI retrofits and facilitate returning a portion of the energy savings from tenants. As most landlords don’t have the experience to determine which interventions are necessary and where to get them financed, she knew UpGreen had to cover the end-to-end journey.
Building UpGreen to be commercially scalable
Balachander wants to bring UpGreen’s commercially scalable model to landlords now to ensure the UK market doesn’t have to wait for legislation to catch up: “Commercial landlords are caught between the risk of stranded assets and high retrofit costs in a shrinking office rental market. SME tenants face tightening margins from rising energy costs, higher costs of capital, etc. We help them both solve these problems through our model.”
UpGreen navigates the regulatory framework and limited capital by implementing energy-saving retrofits in commercial spaces. UpGreen first identifies the highest return of investment interventions from wall or floor insulation window glazing to energy optimisation. Closely working with clients on UpGreen projects with commercial tenants without tenant disruption on weekends or evenings. UpGreen charges tenants a recurring fee as the retrofits are made, allowing the landlords to get payback on the investment while tenants receive lower bills.
Pilot project
UpGreen has implemented its first pilot in London, with a private landlord with 47 office space properties and a further project with Durham Council, on an industrial estate with 35 tenants. With a partnership with the Installation Assurance Authority, UpGreen implements interventions with its installer network. Balachander and AlSaab believe UpGreen is the key to providing net zero opportunities for commercial clients to reduce their carbon emissions drastically.
One of UpGreen’s tenant clients in its pilot program, Nick Cochran, Founder of Zebra People, was excited for its landlord to announce the plans for retrofitting. “When we heard from our landlord about UpGreen, we jumped at the chance to engage. We’re committed as a business to net zero, and improving the energy efficiency of our office space is key to that. And since we get cost savings at the end of the day, it was a no-brainer.”
Maggie Bosanquet, Low Carbon Economic Development Team Leader at Durham County Council, said: “Durham Council has put the highest priority on heat decarbonisation and energy efficiency within our Climate Emergency Response Plan, and so UpGreen and Durham Energy Institute were clear partners for us. We value UpGreen’s approach as very economically sound and designed to fill a defined gap in the market in terms of retrofits. We are beginning a proof of concept with them, and we aim to use the momentum from this project to decarbonise our 25 industrial estates and contribute to our net zero targets. We’re optimistic that our collaboration with UpGreen and the university will not only be scalable but will also set a precedent for councils nationwide.”
Commercial landlords or tenants interested in reducing your energy bills, contact puja.balachander.mba18@said.oxford.edu for more information.
