Budderfly said it will make $500 million in project capital available to small and mid-sized US municipalities for solar, battery storage and other energy upgrades at no upfront cost, and plans to combine the sites into a 150 MW VPP. Cities would pay the company over time from the resulting energy savings.
The Connecticut-based energy-as-a-service company announced the Modernizing American Cities program with Schneider Electric this week at the International City/County Management Association’s annual conference in Long Beach, California. Depending on local needs, projects could also include EV charging, HVAC, lighting and energy-monitoring technology, said the company.
Budderfly added that it aims to upgrade 100 cities at roughly $4 million to $5 million each and forecasts energy savings of 60% to 80% per city. It did not say whether the $500 million is newly committed financing or an allocation of existing capital. It said it has invested more than $378 million in facility upgrades over the past 10 years, across more than 9,000 commercial customer locations.
Under the planned model, Budderfly would finance, install, own, operate and maintain the equipment. The company said municipalities would pay over time through energy savings rather than depend on grants or capital-budget spending.”
“Cities are being asked to modernize aging facilities while electricity costs rise and budgets remain tight,” Budderfly CEO Al Subbloie said. “The question is how to get that work underway.”
Schneider Electric will supply energy management and automation technology to integrate and run the systems. “Budderfly’s model helps cities move forward without drawing on limited capital budgets,” said Michele Hix, vice president, strategic customers, North America operations, at Schneider Electric.
Cadillac precedent
The program builds on Budderfly and Schneider Electric’s project in Cadillac, Michigan, where Budderfly said it is investing about $4.4 million to upgrade seven municipal facilities, including city hall and the wastewater treatment plant. According to Cadillac City Council minutes, the investment “would primarily fund solar generation and battery storage,” and the systems at city hall and the wastewater treatment plant would provide microgrid capability during power outages.
Budderfly will finance, own, operate and maintain the equipment under a 15-year agreement and “would assume the performance risk,” the minutes show. The companies said in August that Budderfly would deliver guaranteed savings over the contract term.
The project “is projected to lower the city’s overall energy costs by approximately 65%,” according to the minutes, and the city will own the equipment outright at the end of the term or could renew the agreement for further upgrades.
“The city would receive a share of demand-response revenue and additional savings if the project exceeds the projected 70% savings threshold,” the minutes state. They do not specify the city’s monthly payments to Budderfly or the size of its demand-response share.
Company representatives told the council that Cadillac would be Budderfly’s first municipal project. Council members discussed “the proposal’s long-term financial implications,” along with maintenance, solar output in cloudy and snowy weather, visual impacts and the use of local contractors, before voting unanimously on July 20 to waive competitive bidding and authorize the agreement.
Cadillac City Manager Marcus Peccia said the project allows the city to modernize “without requiring upfront taxpayer investment.”
The Cadillac project came through Schneider Electric’s Accelerating Resilient Infrastructure Initiative, which launched with $7.5 billion in available financing, according to Schneider Electric. Budderfly’s plan to aggregate municipal sites into a VPP comes as distributed aggregation scales up in the United States, where Sunrun, Tesla and Renew Home announced plans in June for VPP programs of up to 16.8 GW.
From ESS News
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