Brad Pilgrim, CEO at Parity Inc., says the company is looking to expand into such markets as California, Florida, Colorado and Illinois.Christopher Katsarov /The Globe and Mail
A Toronto-based company with technology that promises to lower energy costs and greenhouse gas emissions from buildings has raised $25-million from a Canadian impact investor to expand in the United States.
Parity Inc. said on Tuesday Idealist Capital contributed to its Series B financing. Idealist, of Montreal, joins the eight-year-old company’s existing backers: ArcTern Ventures, Wyse Meter Solutions Inc. and RET Ventures.
Parity uses machine learning technology to reduce consumption of electricity and natural gas at hotels and multifamily dwellings through automation and monitoring of their heating, ventilation and air-conditioning-systems. It also provides regular reports that itemize energy savings, reductions in CO2 emissions and other data.
The company currently offers its services in Toronto, New York, Boston, Philadelphia and Washington.
With the new funding, Parity is looking to expand into such markets as California, Florida, Colorado and Illinois, while improving the technology, said Brad Pilgrim, Parity’s co-founder and chief executive officer. The United States has been tightening building performance and benchmarking standards over the past decade, and the sheer size of the market offers considerable expansion potential, he said.
“The energy intensity in the Northeast and in the West play into high utility rates, and decarbonization of buildings and services like ours are now being demanded, and in some places being required,” Mr. Pilgrim said in an interview.
The company currently has 26 employees and expects to hire more as it expands into other regions, he said.
Mr. Pilgrim came into the energy-efficiency business from a career in solar electricity, where he became convinced managing consumption at the building level was key to giving utilities more flexibility to move power where it is needed at times of high demand.
The spark came from attending a meeting of his Etobicoke condominium in 2016, where the topic under discussion was surging costs at the building that were forcing a jump in monthly condo fees.
He studied where to reduce costs for owners, and energy stood out as one of the only items that could be controlled by making the building’s systems more efficient, he said.
“It looked like a problem that I wanted to dedicate a lot of time to,” Mr. Pilgrim said. He founded the company in 2016 with fellow energy-industry expert Brian MacLeod.
It’s not just about costs. The real estate sector is a crucial target in the fight against climate change. Emissions from buildings account for about 37 per cent of global greenhouse gas emissions, according the UN Environment Programme. Half those emissions are from inefficient HVAC systems, according to Parity, and its systems are aimed at reducing energy consumption from buildings by 25 to 40 per cent.
Meanwhile, electricity grids are becoming more complicated as wind, solar and other renewables add to generation capacity, Mr. Pilgrim said.
“We’re doing things like automated demand response curtailment right now with a view that every building in the future will need to interact with a grid in a much more complex way. That’s what the grid is demanding,” he said.
The investment in Parity meets the goals of Idealist Capital, which seeks opportunities in power-supply decarbonization, electrification of transportation, carbon reduction from industrial activity and advancement of the circular economy, said Pierre Larochelle, its co-managing partner.
“As Parity will scale and grow, the overall energy-saving impact through the integration of Parity software solutions will be very material,” Mr. Larochelle said in an e-mail. Consumers will benefit through cost savings, utilities through shaving peak consumption, while the technology also produces environmental gains by cutting carbon emissions, he said.
Idealist made headlines in March, when the federal government’s Canada Growth Fund invested $50-million in it, hoping to attract more private investors seeking growth-stage green technology opportunities.