Electricity Rate Increases + Grid Defection + Onsite Energy and the Commercial Real Estate Sector

Every month we share VECKTA updates and our insights on trends and technologies related to the corporate energy transition.?

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In this issue, we cover:

• Graph: Overview of commercial electricity rates since 2002. For most of the states, you'll see the curve take an aggressive upward trajectory around 2022.
• Study: The five U.S. States ripe for grid defection
• Conversation with Brendan Wallace, CEO and CIO of Fifth Wall, the largest VC firm focused on the global real estate industry and property technology for the built world.
• Customer Win: VECKTA helps a cold storage marketplace user save 68% on energy costs.
• Blog Post: The opportunity for CRE owners to be power producers with onsite energy and de-risk their properties by investing in sustainable solutions.

TRANSITION NEWS

Commercial Electricity Rates 2002-2024

We frequently talk with customers about what's happening with electricity rates and the fact that we are squarely in a new era of cost increases, price volatility, and greater outages (preventative and weather-related). Up until about 2020, the rate increase year over was fairly dependable at about 4% (except for 2005-2010), on a national average.

To help paint the picture of how rates have behaved overall, we pulled in commercial rates from the EIA dating back to 2002. In the graph below, you'll see rates mapped for the states with the most energy consumed by commercial customers.

The Five States with Economic Conditions Ripe for Grid Defection, Western University in Ontario Study

Economic conditions are now favorable for electricity customers to generate their power off grid in five US states: California, Connecticut, Hawaii, Massachusetts, and New York, says a new study by researchers at Western University in Ontario, Canada.

This study examines the growing trend of "grid defection," where electricity customers are increasingly opting to generate their power off-grid. In the states listed above, high utility rates and falling solar/battery prices, are making grid defection a near-term possibility. This raises concerns about a potential "utility death spiral" as customers flee the grid, leading to higher rates and more defections. The article suggests that regulators must consider this threat and design rate structures to encourage solar producers to remain on the grid. It also highlights emerging business models that could make grid defection more accessible to consumers.

Read the article here.

ON THE RENEWABLE RIDES PODCAST

Fifth Wall CEO and CIO, Brendan Wallace, Talks About Onsite Energy as a Competitive Advantage for CRE Owners

VECKTA Founders Gareth Evans and Dan Roberts talk with Brendan about the importance of turning buildings into energy producers, the role of data centers in the energy transition, and why decarbonizing real estate is not just an environmental necessity, but also a financial opportunity. Get a glimpse of how the future of energy innovation is unfolding within real estate and why property owners need to think more strategically about sustainability.

Listen to the episode here.

VECKTA NEWS

VECKTA Platform Helps Save 68% on Energy Costs for Cold Storage Company

The latest VECKTA marketplace win: A cold storage company was paying $0.25 per kilowatt hour in utility costs. They locked in a 20-year PPA at $.08/kilowatt hour in our marketplace. That's $25M in lifetime savings!

Learn More

FROM THE BLOG

The Future of Commercial Real Estate: From Concrete Boxes to Power Producers

We explore the paradigm shift in the commercial real estate industry, where energy and technology are becoming central to property ownership and management. It highlights how onsite energy solutions, such as solar panels and battery storage, can open up a large asset-generating opportunity. Embracing these sustainable technologies can increase property values, attract high-quality tenants, and protect against climate-related risks.

The CRE experts we interviewed emphasized the need to consider the financial materiality of these investments, evaluating both consumer-facing and corporate-facing properties to gain a competitive edge. Commercial real estate should adapt quickly and internalize its role as both a technology and energy industry.

Read the post here.