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Exclusive: Lumen raises $11M for solar financing

Illustration of rows of solar panels with abstract shapes and money elements.

Illustration: Gabriella Turrisi/Axios

Startup Lumen Energy has closed a Series A round of $11 million to expand its new clean energy financing product for commercial building owners, the company tells Axios.

Why it matters: There's massive unlocked economic and carbon reduction potential in bringing solar and batteries to commercial buildings across the U.S.

Details: Climate tech investor Ajax Strategies led the round, and investors Lowercarbon Capital and Designer Fund participated. Real estate companies Nuveen and Bridge Investment Group both joined in.

  • To coincide with the fundraise, San Francisco-based Lumen Energy also launched a new financing product, called Auto PPA, that offers automatically customized financing for each building in a commercial real estate portfolio.
  • The product acts as a marketplace between commercial building owners that want to deploy clean energy projects and financiers that want to invest in them.
  • Lumen Energy co-founder and CEO Peter Light, who previously worked on energy projects at Google's X, said that hundreds of properties have been run through the company's original platform and customers include commercial real estate companies Hines, Bridge Investment Group, and Tishman Speyer.

Zoom in: The reason that more commercial building owners haven't deployed solar and batteries is because each project tends to be complex and requires manual customization.

  • Not all buildings will economically benefit from rooftop solar or onsite batteries, and the rate of return on the investment depends on many factors, like the region, the building, the roof, the utility and more.
  • Light said a marginal IRR (internal rate of return) would be 3%, a good one would be 10% and a great one would be 12%.

Big picture: The U.S. is sitting on untapped potential of 145 GW of unused commercial solar potential.

  • At the same time, commercial buildings account for 16% of the greenhouse gas emissions in the U.S.
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