A giant digital sign is seen at Facebook’s corporate headquarters campus in Menlo Park, California, on October 23, 2019.
Josh Edelson | AFP | Getty Images

Technology hub Menlo Park, California, home to Meta, is teaming up with Brooklyn, New York-based BlocPower in a new form of public-private partnership to electrify thousands of buildings to help meet a 2030 climate goal of carbon neutrality.

The small California city, with a population of roughly 35,000, estimates the fossil fuel consumption of buildings at 41% of its total emissions. BlocPower, a past CNBC Disruptor 50 company, is among the leaders in retrofitting residential and commercial real estate to reduce fossil fuel use. The Menlo Park plan will start modestly, with 25 buildings to be electrified this year. It is voluntary, but the plan is to increase that to over 1,000 buildings per year starting in 2024. It includes the installation of heat pumps for air cooling and heating, heat pumps for water, electric vehicle charging stations, and solar power and battery storage.

“Menlo Park just set a crucial, historic climate precedent as the first city on the West Coast to establish a public/private partnership of this kind,” said Angela Sherry Evans, Environmental Quality Commissioner, City of Menlo Park, in a statement announcing the deal.

Electrifying 95% of existing buildings will “dramatically reduce” reliance on natural gas, she said, which is responsible for almost half of Menlo Park’s greenhouse gas emissions.

BlocPower already works with New York college town Ithaca, where Cornell University is based, which became the first municipality to commit to a 100% decarbonization plan and use a new public-private partnership model. Ithaca lined up an initial $100 million in private financing last summer to support the effort from private equity partner Alturus.

BlocPower founder and CEO Donnel Baird told CNBC last year that 100 million buildings across the U.S. waste $100 billion a year on fossil fuels. “There are significant savings that can be introduced,” Baird said.
Building direct energy and electricity use comprise roughly 38% of greenhouse gas emissions in the U.S., according to the U.S. Green Building Council, and the majority of buildings that will make up urban environments through 2030 already exist.

Heating systems, including water heating and space heating, are big drivers of energy use in residential and commercial buildings and are targets of climate projects, as well as insulation and lighting, according to the American Council for an Energy-Efficient Economy. In cities with less population growth, there will also be a larger share of legacy buildings in need of upgrades rather than new constructions in booming population hubs.

Cities have emerged as leaders on decarbonization because much of the law related to buildings is in the realm of state and local governments, and they set building codes. As more cities and towns look to lead on climate, tapping into private investors in combination with incentives from the government can reduce the cost of capital and interest rates for project finance.

Ithaca set a ratio at 1 to 20 for taxpayer versus private investment funding.

“Given the scale of the problem, people are open to public and private partnerships in Ithaca,” Svante Myrick, Ithaca’s mayor until early 2022, told CNBC at the time of the BlocPower deal. “They realize government has to be the catalyst setting rules for climate but if we are going to make sweeping changes we just don’t have the resources to do it alone,” he said.

Smaller cities like Ithaca and Des Moines, Iowa — which also plans to target buildings — are being aggressive in seeking to reduce greenhouse gas emissions on a local level. Both cities are part of a new UN-led consortium on climate called the 24/7 Carbon-free Energy Compact, which also includes Google.

In cities and towns across the U.S., many of the least-efficient buildings are located in lower-income communities, a focus for BlocPower across its project portfolios, and these properties are often older and in need of upgrades, including appliances that are more efficient. Not only are the energy efficiency standards neglected in these areas, but the households pay a higher percentage of income in energy costs.

Local non-profit Menlo Spark is working with Menlo Park to raise up to $35 million to reduce project costs for low-to-moderate-income households. Belle Haven, an area of Menlo Park close to the bay, as well as major roadways where air quality is lower, was chosen as an initial focus.

BlocPower, with a business model that combines the traditional construction and engineering sector with climate technology, and increased investment opportunities in underserved communities, as well as job creation in green building, has projects underway across dozens of additional U.S. cities.

Meta, formerly Facebook, announced it had reached 100% renewable energy and net zero-usage by 2020.

In addition to investors Goldman Sachs, Kapor Capital, Microsoft’s Climate Innovation Fund, and Andreessen Horowitz, BlocPower received a grant from the Jeff Bezos Earth Fund and was invited to Apple’s accelerator program.