Building-to-Grid Is the Next Frontier for Smart Buildings

Digital transformation is the pathway between a commercial facility recognized as a business cost center and a revenue-generating smart building business asset. IoT devices and remotely accessible automation and controls provide the infrastructure for exchanging data and directives for ongoing performance improvement with analytics engines and advisory services. Customers first embark on a journey of change in the process of managing building equipment, staff, and space use to refine the systems performance within their facility. Next, these cost-saving optimized buildings can be managed in coordination across a portfolio and with onsite energy assets, or distributed energy resources, to realize new revenue opportunities.

Guidehouse has characterized this pinnacle in the construct of the smart building as the building-to-grid (B2G) platform in the energy cloud. These buildings become the point of transaction for new business models, energy supply and demand, and occupant experience. Recent market activity acts as smoke signals for maturation of the smart buildings market and the initiation of the next frontier for the smart buildings market in revenue creation.

#1 Funding Announcements

Early stage startup Blueprint Power is introducing building-to-grid solutions to the New York market in hopes of capitalizing on emerging opportunities from NY REV. CEO Robyn Beavers explains the company’s value proposition: “Until very recently, buildings were not able to proactively sell excess energy capacity in the same way that traditional power plants do. Now in states like New York they can. We are helping buildings connect to and transact in these markets in a scalable way.” The value proposition led to $3.5 million in funding according to Tech Crunch.

Major tech giants are placing their bets on the acceleration of enabling technologies—key devices and services for building optimization, the foundation of B2G readiness. Amazon—in partnership with the accelerator group TechStars—announced the Alexa Fund ($100 million in venture capital announced in November of 2017) latest round of program participants, including a notable shift into the commercial market. Alibaba Hong Kong Entrepreneurs Fund and CLP Innovation Ventures announced $1 million in funding for smart building IoT startup, En-trak.

#2 Leadership Moves

Executives from major industry incumbents are jumping ship for the uncertain world of technology startups, but their commitment demonstrates insider optimism on the smart buildings market outlook. Feilo Sylvania’s now-former smart lighting development chief, Bastiaan de Groot, has recently announced his leap to co-found Ingy, a smart lighting startup. In a recent LEDs Magazine article, de Groot explains his outlook, “We believe that the value of the data is around 12 times bigger than the value we create in terms of reducing the energy consumption in the building by installing energy-efficient lighting.” He underscored the cross-cutting business benefits of IoT smart building systems.

#3 Project Implementation

Finally, large-scale comprehensive energy and smart building technology projects are gaining ground across industries and regions. There has been notable activity by major European energy providers such as the Bombardier and ENGIE announcement of their 5-year, $290 million smart buildings engagement to optimize operations. The Bombardier COO explained, “ENGIE’s strengths in energy and services, combined with the ability to provide solutions across our global facilities, will help us address our business challenges while ensuring a high-quality working environment for our people and exploring new combined business opportunities.”