September 1st, 2022 — The American Family Institute for Corporate and Social Impact is a venture capital firm that invests in entrepreneurs who are building scalable, sustainable businesses in a long-term effort to close equity gaps in America. Founded in 2018, the Institute invests in entrepreneurs working on four key themes: economic opportunity for all, healthy youth development, equity in education, and resilient communities.
Last year the AmFam Institute engaged Powerhouse to identify early stage investment opportunities in startups that are mitigating the cause of climate change, adapting to the effects of climate change, and creating safe, well-paying jobs of the future. As part of our work helping our clients access cutting edge climate innovation, Powerhouse had been tracking Ivy Energy since 2019, and introduced Ivy to the AmFam Institute given the strong fit with their investment thesis to help close equity gaps in America.
Ivy Energy is a seed-stage startup that enables rooftop solar and leverages other distributed energy resources to maximize grid flexibility for tenants in multifamily buildings. Ivy software uses smart grid logic to distribute the solar energy benefits of the entire community to tenants according to how much solar power is available and the price of energy in real time. “After several years working in solar, I became obsessed with figuring out why apartments were being left behind in the rapidly-expanding rooftop solar market,” founder Dover Janis said. “At Ivy Energy, our mission is to evolve the way that shared communities create, use, and think about energy. We’re grateful to share this mission-alignment with groups like AmFam who are now backing us as we assist in transforming the shared DER market."
Read on for more on why AmFam invested in Ivy Energy, and how Powerhouse helped make it happen:
Rooftop solar is largely untapped by renters who typically live in multifamily buildings
The technical potential of rooftop solar in the United States is estimated by NREL to be over 1 TW, 27% of which is low-to-moderate income residential rooftop.
Most low-to-moderate income Americans rent their home, and most rental homes are in multifamily buildings, where rooftop solar deployments have lagged behind single family homeowners.
The installed cost of rooftop solar is significantly lower for larger installations on larger buildings.
California has now mandated that all new housing must include rooftop solar.
Low and moderate income households are blocked from rooftop solar by the “split incentive”
In most leases in America, the tenant pays the utilities, but the landlord determines any permanent building improvements, such as onsite solar, storage, and other kinds of home electrification.
This means that the tenant has all the incentive but no ability to install solar, and the landlord has minimal incentive (particularly when a community has a severe lack of housing, as in much of California).
This split incentive is exacerbated in multifamily dwellings because of the complexity associated with dividing the benefits of solar among tenants equitably.
Ivy Energy solves the split incentive for multifamily dwellings by creating a new revenue stream for building owners
When a building has rooftop solar, the building owner can use the Ivy Energy platform to sell their renewable energy to tenants at a cost that is lower than what they would pay to their utility.
Ivy creates a “virtual grid” that distributes solar benefits to tenants using grid resiliency logic.
Tenants can opt in to save money on their utility bill, while owners generate $500-$1,200 in annual net operating income (NOI) per unit on the Virtual Grid Platform.
The platform is compatible with rooftop solar, onsite batteries, EV charging, and other smart DERs.
How Powerhouse worked with the AmFam Institute to source their investment in Ivy Energy
Powerhouse’s unparalleled database of thousands of climate tech startups included Ivy Energy.
Over the course of our 12 month engagement, Powerhouse shared 200 startups with the AmFam Institute based on their investment criteria and our perspective on each startup.
Powerhouse identified Ivy as a fit given the AmFam Institute’s focus on economic opportunity and resilient communities and introduced Ivy Energy’s founders to the AmFam team.
Powerhouse was proud to work with Cliff Bartholomew, Chaarvi Badani, John McIntyre, and the entire American Family Institute team as we enabled their investment in Ivy Energy. We look forward to working with teams like the Institute’s to help startups like Ivy Energy achieve scale.
Co-authored by Powerhouse Technical Director, Octavi Semonin PhD.
To read more about our work at Powerhouse and Powerhouse Ventures, visit our Insights page.