As international scientists are frantically raising alarms about climate change, corporations, public policy and tech innovation are coming together to potentially unleash a large-scale rollout of solar, wind, batteries and other renewable power sources.
At the root of it all is the need for a huge infusion of cash — and a new Seattle startup believes it can help unlock and direct some of those dollars.
Ever.green is playing matchmaker between corporations that are spending money to reduce their carbon footprints and developers that need funding to build energy facilities. The startup has built a marketplace to facilitate these transactions, with the goal of making them quicker, less risky financially, and easier for smaller corporations to participate.
The company, which launched in 2021, today announced a $6.1 million seed round. The investment will help Ever.green work toward its mission of getting clean energy plugged into the grid — and fast.
“We’re building 20 gigawatts of solar per year [in the U.S.]. We need three or four times that,” said Michael Leggett, co-founder and chief product officer. “We need to build so much more. It’s just unfathomable.”
To drive money into these projects, Ever.green is targeting two funding mechanisms: corporate purchases of renewable energy and the new investment tax credits (ITCs) created by last summer’s Inflation Reduction Act.
“The area that Ever.green is going to sit in is a really unique space,” said Kim Fiske, an energy market expert and chair of the OneEnergy Renewables board.
Buying green power
Solar, wind and other clean energy facilities can sell renewable energy certificates (RECs) for each megawatt hour of electricity they produce. For years, companies have bought RECs that equal their electricity use in order to reduce their carbon emissions. In 2021, more than 300,000 businesses purchased RECs.
One of those is Molly Moon’s Homemade Ice Cream, an artisanal, Seattle-based business that touts its sustainability ethos. Molly Moon’s cafes and ice cream kitchens use 173 megawatt hours of electricity in a year and the company buys an equivalent amount of wind power through a REC, according to a federal database.
The database doesn’t disclose the price of the RECs, but the cheapest certificates can cost $2-$4 while high-end RECs can cost $100 or more.
Ever.green’s marketplace is built to increase the environmental benefits of the certificates. It offers multi-year contracts for RECs only for new renewable power facilities. Existing clean power plants can also sell RECs, but that doesn’t necessarily lead to additional clean energy production.
The startup is also working directly with developers building smaller-scale solar energy fields. These facilities can have more of an impact than individual rooftop solar panels, but avoid some of the grid transmission challenges that delay larger projects.
One downside to traditional corporate purchases of renewable energy is they can carry financial risk for the buyers due to fluctuating energy prices. So Ever.green recently teamed up with Watershed, a climate software platform, to offer a new type of REC that’s structured to eliminate that risk. Watershed customers Samsara, Stripe and TaskUs have purchased these certificates for a deal backing the development of a solar facility in Texas.
Ever.green is intentional in linking its operations to boots-on-the-ground construction.
While Ever.green is a tech platform, it’s not just “fluffy software,” said co-founder and CEO Cris Eugster. “Our platform, our software, our business model, bridges technology and the physical world,” he said.
Eugster was formerly the chief operating officer for San Antonio’s CPS Energy, the nation’s largest publicly owned energy company, and worked for decades in sustainability and renewables. Leggett was previously CPO for Nori, an early marketplace for carbon removal, and led design and product at Facebook and Google.
New act, new opportunities
In August, when Congress passed the Inflation Reduction Act with its billions of dollars for clean energy, it created a giant, unexpected opportunity for Ever.green. The company, which had launched the year before, started scrambling.
“Almost immediately we were rolling up our sleeves and digging in and trying to [understand], ‘What does this mean? What’s it mean for our business? For our customers, the people involved in this? Are we pivoting? Are we adding?” Leggett recalled.
The startup decided to add.
It focused on investment tax credits (ITCs) included in the act that range from 6% to 70%. The amount depends on whether a project meets criteria such as being located in areas with closing coal plants or in low-income communities, or if it uses domestically produced materials. The IRS is still issuing specific rules and regulations on the credits.
Ever.green’s marketplace lets solar power developers get capital quickly by selling their tax credits. A developer, for example, might offer an investor $1 million in credits for $900,000. Deals are already being arranged on the platform with the caveat that terms will be finalized once the IRS finishes its work.
If Ever.green has figured out a way to make exchanges of the tax credits relatively simple, “that’s incredibly valuable,” said Fiske. “I have not seen anybody else out there this quickly. I was shocked. That’s incredibly exciting,” she said.
The startup also released a free tool for exploring locations that could potentially confer the greatest tax benefits.
Last week it announced a partnership with Baker Tilly, a leading advisory CPA firm, to provide tax and energy expertise to the product.
Ever.green is a spinout from Seattle’s Pioneer Square Labs. PSL Ventures, the investment arm of Pioneer Square Labs, and Designer Fund led the startup’s round. Baker Tilly, Fin Capital, City Light Capital and Climate Capital also invested.
“The Inflation Reduction Act and Ever.green’s marketplace radically change the profitability of clean energy projects, and I believe Ever.green will be a critical player as we figure out how to build more renewable energy,” said Greg Gottesman, managing director of Pioneer Square Labs, in a statement.
The startup joins another Seattle company in the space — LevelTen Energy, which launched in 2016. The company recently announced a collaboration with Google Cloud to develop a new platform that accelerates that energy deal making. Portland, Ore., is home to LO3 Energy, which also operates a clean energy marketplace with a focus on community projects. There are multiple companies internationally helping fund renewable energy deployment.