Climate Positive

Mark Danzenbaker | Optimizing building efficiency for a more resilient grid

Episode Summary

As CEO of GridPoint, Mark Danzenbaker believes that energy efficiency can be harnessed to make the power grid more sustainable and resilient. GridPoint does this by installing energy optimization hardware in mid-sized commercial buildings that are often overlooked by efficiency programs. GridPoint works with corporations that have many sites across the country and provides real time data on savings and energy consumption for a client’s portfolio of buildings. As their reach has expanded, the network of buildings GridPoint serves has become an important way to partner with utilities to manage energy demand during heat waves and other periods of high energy use. In this episode, Hilary Langer talks with Mark about how GridPoint engages clients both in front of and behind the meter to accelerate the transition to a more sustainable grid.

Episode Notes

As CEO of GridPoint, Mark Danzenbaker believes that energy efficiency can be harnessed to make the power grid more sustainable and resilient.  GridPoint does this by installing energy optimization hardware in mid-sized commercial buildings that are often overlooked by efficiency programs. GridPoint works with corporations that have many sites across the country and provides real time data on savings and energy consumption for a client’s portfolio of buildings.  As their reach has expanded, the network of buildings GridPoint serves has become an important way to partner with utilities to manage energy demand during heat waves and other periods of high energy use. In this episode, Hilary Langer talks with Mark about how GridPoint engages clients both in front of and behind the meter to accelerate the transition to a more sustainable grid. 




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Episode recorded: July 6, 2022

Episode Transcription

Chad Reed: This is Climate Positive – a show featuring candid conversations with the leaders, innovators, and changemakers driving our climate positive future. I’m Chad Reed  

Hilary Langer: I’m Hilary Langer.

Gil Jenkins:  I’m Gil Jenkins.

Mark Danzenbaker: We're trying to ultimately accelerate the energy transition with this network of buildings such that the end customer wins with a business case of consumption reduction and savings. But you get to those hundreds of thousands of buildings, and then you're able to provide very reliable energy demand reductions at specific points to the grid all at the same time.

Hilary: At Hannon Armstrong, we believe knowthat the cleanest energy is the energy that isn’t useds saved through efficiency. GridPointshares this outlook and drives energy efficiency by installing optimization hardware in commercial buildings.  They work with clients that have many locations across the country – corporations like Walgreens and Chipotle –and they manage savings for a client’s portfolio of buildings.As their reach has expanded, the network of buildings they serve has become a tool in and of itself to moderate energy demand during heat waves and other periods of high energy use.  GridPoint’s CEO Mark Danzenbaker joined me to discuss how his team is working to create a more sustainable grid. 

Gil: Climate Positive is produced by Hannon Armstrong, a leading investor in climate solutions for over 30 years. To learn more about our climate positive journey, please visit

Hilary: Mark, thank you so much for joining us on Climate Positive.

Mark: Yes, it's a pleasure to be here, and thanks for inviting me.

Hilary: Mark, you've been with GridPoint since 2009 and you became the CEO in 2016. Your team provides technology that has saved nearly 10 billion tons of carbon. We'll get into the business model shortly, but I want to first touch on your path. What drew you into this field of market-based climate solutions?

Mark: I would say, for me, the interest in being involved in sustainability goes back to growing up in the DC metro region. That's really had an impact on my worldview and passion for sustainability. What I mean by that is living here makes you see that despite some increasingly partisan politics that people really do come here to make a difference. For me, that's always made me want to work on something bigger than myself.

I think you could really summarize my goal here to come down to one word and that's "impact." I really want to have a positive impact on society. I see us helping solve some of the world's biggest problems, particularly around sustainability and climate change.

There's a lot that we'll talk about in the macroeconomic situation in what we do, but fundamentally peeling it all the way back, what's the legacy? It's about being involved in something and building something that plays a role in trying to help make the world a better place. I think everybody that comes to GridPoint, myself included, from the beginning has been wanting to make a positive impact and, in particular, help accelerate the energy transition, which is one of the most important things we have to tackle.

Hilary: That's fantastic. In terms of your impact, could you talk us through how the general business model works? Since you joined CEO, you became more focused on the subscription-based energy technology services. What does that look like for a typical client?

Mark: What we find is that the smaller the building, the less likely they've been addressed, which is really the space that we play. GridPoint is playing this subscription volume game where most of the buildings are. That's what we're doing because we are going in and we're saying, "Let's make it easy for those customers to adopt technology to participate in the energy transition and to make their buildings efficient."

We tackle those customer buildings with a technology platform on a subscription that includes the equipment, the software, the services, everything rolled in together. Really, the idea is to set up a business model where everyone really wins, where we can save energy that far exceeds the subscription fee that we charge our customers. The customers don't have to put any capital out. They're zeroed-down, as it were. Everything is included. Our equipment isn't free that we put in the site, but it's included in the subscription and everything comes with it.

You create this business model where the end customer is making money from the start by saving energy, but you have these broader benefits for grid decarbonization. You are using less energy, reducing carbon emissions for the end customer, but also for the grid at large. You're helping the utilities make the transition because they have this reliable relationship where you can lower the energy consumption and demand its specific points, which is another way to say virtual power.

What we see in the future is an increasingly decarbonized grid, where the electrons that fuel this podcast right now are increasingly green ones. There is this two-way networked relationship between the producers of energy and the consumers of energy. In addition to that, tackling the edge of the grid, all buildings and commercial buildings is a very, very important factor. The truth is we're not going to make the energy transition without tackling the edge of the grid.

That means commercial buildings and not do it without tackling those. Really, what we believe is important is an opening for centralized technology platforms like GridPoint to connect the consumers of energy, particularly commercial buildings and the producers of energy, utilities, and the grid at large to bring them together to help close the supply and demand gaps and make the transition for both the end customer at the edge, as well as the grid and utility.

Hilary: I want to bring us back to what it looks like when a GridPoint system or subscription is in place at a site, thinking about the behind-the-meter side of things. A few years ago, your team showed us one of the GridPoint systems in a Chipotle. It's in the back room, in the break room, and it's a pretty unassuming system. It's a control panel essentially, but you're able to generate tons of savings from that. What is actually going on in, for instance, a Chipotle site?

Mark: Yes, you got it. The same could be true for many of the other types of customers that we work with, whether that's Walgreens or Chipotle or Wendy's or Burger King, or many, many, many other types of customers like that. What we're doing is we're putting our technology in the site, our platform, which includes a controller, which is a small unassuming piece of equipment that goes in the site and takes control of the assets within the facility to help make the trains run on time, so to speak, make them more efficient and collect a lot of data within the site, and then combine that data on-site with our cloud-based platform, our technology, our algorithms, our data science, and our services.

Hilary: GridPoint’s services are provided through a subscription service. How does that work for your clients?

Mark: That’s correct. It's like equipment in the site, installed, warranted. Everything is included. We take control of the building. We make the trains run on time and then we use the data and the technology and the platform to help the customers make great decisions, but also to help them control their sites more efficiently. At the end of the day, the goal is, "Okay, let's make the site smart. Let's make the building efficient. Let's make the building and the customer sustainable.

Really, what we're talking about is reducing kilowatt-hours day-by-day, minute-by-minute within that facility without impacting customer comfort, and also managing those bills in such a way that we're helping the customer make a great business case, but also making those buildings use less energy at specific points and overall, and then make those buildings more resilient as well.

Everything comes in together. If you say, "Okay, well, I used to spend X on energy on an annual basis," or divide that by 12 into a monthly basis, and then you have the GridPoint technology platform in place for a modest subscription fee. What's happening is your saving far in excess what our subscription fee is and the customer doesn't have to put any capital down.

They're in the money, so to speak, from day one and minute one with a great system that can then be extended to help them tackle future use cases, which include the assets of the future because, today, it's very significantly about heating, cooling, lighting, refrigeration, the major assets within these facilities. Tomorrow, it's about extending what we do into the assets of the future.

Really, the mission is build this intelligent network of buildings that comes together across many different types of sites, many different geographies, many different types of assets today, many different types of assets tomorrow. Bring them all together, all for a subscription that the customer is really in the money on, saving on an energy and build perspective, but also saving from a carbon emission standpoint, and also really participating side by side with the grid.

Hilary: When we think about a specific site where GridPoint is involved, for people who are not familiar with GridPoint, what does that actually look like? You mentioned getting real-time data, but a lot of these operations have set hours. You know when they're going to open. You know when they're going to close. You know when they'll be occupied. Why can't they just do a programmable thermostat? What specifically is GridPoint doing in one site to save money?

Mark: I think what is great is that commercial buildings do have the opportunity to be controlled. The assets within a facility, you want to make the train run on time. I said that before, but I think it's a great analogy to say, "Okay, well, we find that unmanaged sites and programmable thermostats control just locally without eyes and ears and connectivity and data about what's happening leads to situations where various HVAC units fight each other or lighting zones are inconsistent with those store hours."

Really if you're not collecting the data and managing those assets consistently through technology that you end up in a situation where it's not controlled and you're not being efficient. If you want to be efficient, data is the first order of business, and knowing what's happening and having a control point within those facilities, not just observe but be able to actually control. Really, GridPoint becomes this mini-building management system within these sites.

Hilary: Is there a certain type of building that GridPoint focuses on and works best with?

Mark: I think this is a really, really important point for people to understand where GridPoint focuses and one of the essential ingredients to tackle the edge of the grid because the truth is, and everybody gets this intuitively, that there's big buildings and there's small buildings. The bigger buildings tend to consume a lot more and the smaller buildings consume less.

A lot of the traditional focus out there in the market, in the industry, and some of the traditional, larger building management system providers is on the larger, often more unique buildings. That is really fantastic because they're big buildings. They consume a lot, so you can really move the needle within a specific site. That's really, really important. What we found is that the unaddressed part of the market is the smaller the building.

The smaller the building, the less likely the technology's been deployed or that these sites have technology to manage and they tend to be less efficient. That makes sense because the smaller the building, the smaller the spend, so the harder it is to make a business case to put technology in. Our focus has been focus where most of the buildings are.

Hilary: The ones that operate under the radar?

Mark: Yes, I think so. That's what we've observed because there's significantly less penetration of technology within buildings that are smaller. A fun fact is that 70% of commercial buildings are below 10,000 square feet. That's your neighborhood, Walgreens or Chipotle, or Burger King, and that's your pharmacy. That's some grocery stores. Then 90% of commercial buildings are below 50,000 square feet. We are playing a volume game and we’ve got 16,000+ buildings that we call subscribers, paying sites, on the platform. Our goal over the next several years is to more than 10x those buildings on the platform through very significant investment in sales and product. I could go on and on about all the things we're doing, but the bottom line is the scoreboard is how many buildings and subscribers and paying sites do you have? Then those paying sites, the 16,000 today, become the 150,000-plus tomorrow and those 16,000 buildings today-- and last year, here's another fun fact for you. We saved on just in the year 2021 across those buildings that we had $100 million.

Hilary: Wow.

Mark: We saved them $100 million. We charged those customers less than half of that, far less than half that. More like a third of that if you think about the fee relative to what they save. The customer's saying, "Great, I'm getting at least a 1:2 ratio on the value to them," and that's just the energy side. That's before you talk about operational benefits, asset management, sustainability benefits, just having the eyes and ears, all the good services benefits. That's the value ratio.

That $100 million, if you convert that to what you're really doing, you're making the site more efficient. That's kilowatt-hours reduced. That's reducing the consumption of natural gas within those facilities as well. We're really having this fantastic impact where most of the buildings are on a volume game with a subscription that makes it fantastic for everybody. Really, the idea is like, "Let's make it so that everybody wins," like the end customer wins, the grid wins, society wins, our investors win, and maybe GridPoint wins too.

Chad: I want to tell you about another podcast you might enjoy.

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Hilary: A lot of companies have tried to figure out energy efficiency for some of these smaller, medium buildings. They focus regionally because they want to have their installation guys in a certain area and they want to be able to manage it that way, but you've worked with companies that are all across the country. How do you manage that? What does that actually look like on the ground?

Mark: That's a fantastic question because this really is, if you're going to focus where most of the buildings are and play the volume game, then you've got to be able to go to a lot of places at the same time. That doesn't necessarily always make it easy, but that makes it really an essential ingredient and every noble act is first very difficult. What we're trying to do is be able to do a lot of things at once, right?

We're trying to be fantastic at the hardware-enabled SaaS platform, which takes the investment, and we're very proud of what we've done. We're also thrilled and excited where we're going to go, but we also have to be great at delivery. We do that with a network of installation partners certified across the country to deliver and install our product because customers like a Wendy's operator or Walgreens, they're not just in one particular town or geography. They're all across the country.

Ultimately, our customers want consistency across their fleet of sites. That means going really everywhere that's required and what we call "platform delivery," which is a very important function within our company, is we have to be fantastic at making the delivery of our products on time with high quality on budget and doing that for our customers when and where they need it.

Hilary: Once the technology is installed, then you're really operating in the cloud and you're monitoring and providing data, but you're not going back and forth.

Mark: That's correct. That's the idea. Now, part of our business model is, "Hey, we put our equipment in and it's part of the subscription." If something breaks or if we have a failure and issue like it's on us, we'll come back and fix it. That's part of our service and part of our offering. Everything is tied together. The equipment, the software, the services. The services are proactive monitoring. It's customer success. It's consulting services. We call energy advisory services. Those all come together as part of the package.

That is really important for the customers to know that, "Hey, you got me covered." That's really what it comes down to. We say to customers, "We've got you covered. It's all in. The equipment's not free. It's included. It comes with it. We warrant it. It's all on us. You're going to get a great result. You're going to get fantastic benefit from the beginning and you're going to have all these positive, additional benefits from a sustainability, a carbon offset perspective, et cetera."

Hilary: With extreme weather events, I imagine one of the main challenges for folks who are tasked with managing sites across the country is knowing which sites are still operating well. A Walgreens or a Chipotle or a Wendy's, they're going to have refrigerators and freezers and need to know if they can continue to sell the goods that are in there, or if they have to throw everything out. What kind of monitoring services do you provide and what does that look like when the grids are going through volatility?

Mark: We provide really a complete solution for our customers to not only manage and monitor the heating, cooling, and lighting but also to monitor and manage the refrigeration assets to ensure uptime and to know when you have those situations and know when goods go unrefrigerated, which creates a real problem for inventory. We've been able to help customers through weather events. Part of our service is helping them monitor when there might be, say, a hurricane coming and we'll help them really. This is very, very important when that happens, knowing what sites are up, what sites are down, being the eyes and ears.

Technology can be a real help there, not just day-to-day but when you have more significant weather events. Part of our platform investment is to continue to invest in the types and nature of monitoring that we do within the facilities on those major assets, and be those eyes and ears within the facility for our customers to help them keep the doors open when they're needed. That's part of the reliability and resilience of the end customer, but reliability and resilience from a grid perspective is a term of art also writ large for the grid.

Hilary: Let's talk about that a bit. On the utility side, you've engaged utilities as GridPoint clients. What does that engagement look like? What do you provide to them?

Mark: That's right. Grid services has many shapes, sizes, and flavors, but we are providing capacity back to the grid by controlling and managing these sites and participate in a variety of programs. Some of those traditional capacity, day ahead-based, demand response programs.

Hilary: For those who don't know , when you're talking about capacity, you mean the amount of energy that's being consumed by these buildings and you are able to toggle that a little bit to free up capacity for elsewhere on the grid. Is that right?

Mark: Yes, that's right, and that's effectively moving demand and shifting load later. It's almost like, imagine an overbooked airline flight going from point A to point B. They can't suddenly add more seats. If they're overbooked, they need to ask people to take a later flight. They're compensating you to take a later flight. Effectively, that's what good services and demand response programs boil down to is because the utility might not have enough supply to satisfy demand at a specific point.

They will ask people and incent people. Particularly, really, what we're talking about is buildings at the edge of the grid to move their demand or shift the load to another point in time. You can do that manually or you can do that through technology in an automated way. That's really what we're doing at these sites. We're managing them day-to-day, minute-by-minute from an energy efficiency perspective like permanently reducing the consumption within those buildings.

Then also with specific pinpoints, you can reduce the load, shift the load, and there's a variety of strategies there. There's really an increasing explosion of different types of programs that you can participate in, depending on the area, the geography, direct with utility at the market level. We're seeing real growth and the opportunity to connect the edge of the grid with the utility in a real-time way, and that's where technology can help.

What we do, a real simple example is we will reduce the HVAC usage at specific points without making it uncomfortable within a facility. There's a variety of strategies that you can use within those facilities to pre-cool a site and let the temperature float down a little bit to an acceptable level, and do that across not just one unit but many units at a site, but also many units across lots of sites altogether at one.

The real magic of where this is going to go, and this is really the GridPoint vision, is don't just do that with heating and cooling in HVAC. Do that with a variety of the assets. Do that with HVAC lighting where you can, which is a little bit of a trickier way to do it. More importantly and increasingly, it's going to be about the assets of the future. It's going to be about pulling down the charging of electric vehicle charging infrastructure that that particular commercial building might have outside, pausing that, pushing it out, pulling it down to 80% charging just like at night.

Sometimes your iPhone might try to charge on a slower level because you don't need your phone until the morning. Well, if there's a grid event, we can manage down that load and that charging at specific points to help close those supply and demand gaps on the utility side. I'm weaving this picture of many buildings with many different types of assets, HVAC, lighting, refrigeration, EV charging, and energy storage, all these assets together. Folks that are in the energy industry, they'll know that as a multi-distributed energy resource play.

Whatever the scenario is and the geography is, we have this network of buildings. Really, that's what we're trying to achieve. We're trying to ultimately accelerate the energy transition with lots of buildings, this network of buildings such that the end customer wins with a business case of consumption reduction and savings. Every building that you add on the platform, you get to those hundreds of thousands of buildings, and then you're able to provide very reliable energy demand reductions at specific points to the grid all at the same time. That's really what the ambition of our vision is all about.

Hilary: Behind the meter, you're working with a Walgreens, for instance, and you're discussing with them the parameters, what they're comfortable with in terms of changes to HVAC operation. Then on the utility side, you're not providing a subscription service per se, but you are saying, "We would like to incentivize Walgreens to take part of this." Then GridPoint takes a portion of that incentivized assume too and then the utility wins because they don't have to fire up very polluting additional power plants.

Mark: Correct.

Hilary: What does it look like on the utility side?

Mark: You are able to have a reliable, what we call "virtual power source," a virtual power point of source that is distributed across lots of different buildings and can be geographically pinpointed to a specific region or a specific sub-segment of the grid that has particular issues or problems being able to provide energy to those end customers in a reliable way. From the grid perspective, it is not using power at specific points to provide broader reliability to everybody and be able to rely on someone like GridPoint to bring very reliable energy reductions at specific points when they very desperately need it.

That will result in an economic payment to those that bring that shared with our end customer. There's a variety of different programs that are out there. Some of them are more traditional, but we believe we're going to continue to see an explosion in the types of programs and grid service's potential. We're also going to see the economic benefit for that virtual power grow. That's really the bet that we're making and we're doing it in a segment of the market that is less addressed.

Demand response have been around for a long, long time, typically focuses on the largest of the largest buildings, or there are residential programs. The smallest amount of participation is on the commercial building side and that's where we're focused. This is going to take a village, a lot of different types of programs. What we're trying to bring is this network of commercial buildings, which is where there's a huge opportunity for virtual power and grid services for the utilities and for the grid.

Bring that to utilities on a silver platter to say, "Let's provide that reliable capacity and that demand relief that you absolutely need with these sites in a very reliable way." Do that by, every day, adding more and more sites on the platform. You get this real network effect of the more buildings in a specific geographic area that can be on the platform, the better it's going to be.

Hilary: You've carved out this very specific niche that, as you say, has been under addressed historically and you have a compelling case. A lot of people are predicting that we'll be going into a recession. It seems like a pretty recession-proof model. Do you see any fluctuations between the busts and the booms?

Mark: That's a great question. I believe that we're focused on all the right macro and secular trends. Sustainability, which is necessary regardless of economic conditions. Cost savings, which are very, very important in the potential for an economic downturn. Being able to provide those to customers, we think, is going to be a recipe for success regardless of their macroeconomic conditions. I would add to that that as energy costs increase and energy costs go up, it makes the business case for GridPoint even better.

We see it as an opportunity to help our customers be more successful and help them drive energy savings while also being sustainable and do it on a subscription model, which, as I said from the start, is very easy to pick up because you're not going to have to put your own capital down. That's where we work together to say, "We'll take the risk. We will provide the subscription to you, customer. We've got your back. We've got you covered. All in on a subscription fee, you get to have your cake and eat it too. You get sustainability. You get cost savings. You don't have to put capital down."

Hilary: Hard to say no to that.

Mark: Yes, right, that's the idea.

Hilary: That's great. We're almost done, but I want to turn to the hot seat. Fill in the blank for the following statements. This may be the hardest or the easiest question for you. The best DC sports team is?

Mark: That's got to be the Washington National, the world champion Washington Nationals. That's my team. The Washington Nationals, that's my answer.

Hilary: Awesome. I like it. The most important advice I've followed is?

Mark: I'm going to struggle to attribute this quote, but the right thing is always the right thing to do. I think that sometimes we have these complicated problems or challenges or issues that come up day-to-day, but often, the right answer is the right answer. I think it was Colin Powell that said, "Never let adverse facts get in the way of a good decision," because sometimes this stuff isn't easy. If you know what the right answer is, work through it. Make the call and move ahead for what's right for the long term and for the business. I guess that's advice that applies in anything, not just business.

Hilary: I like that. I want my kids to know?

Mark: I want my kids to know that I focused a substantial part of my career on making impact and doing something that I was passionate about. I always tell my kids, "The only life worth living is the one you're passionate about," so find that one thing, find that passion, and pursue it no matter what. You don't just have to have one thing. It can be many things. My advice would be to my kids and I tell them all the time and I'd want them to know that I really tried to pursue that, which I thought I could make the most impact on.

Hilary: It's a good motto. When I need to recharge, I-

Mark: -go for a run. I love to run.

Hilary: Distance or do you do races or--

Mark: I've done six marathons, but it's been a while since I've run one.

Hilary: Nice.

Mark: I don't know if I'll do another marathon. I have, in my long-term goals, one day to run the Boston Marathon, but I think I would struggle to qualify. However, I have run multiple marathons. I haven't done one recently, but I love to run. One of my favorite races, every year, I always do it, is the Cherry Blossom Ten Miler in Downtown DC. It's like the best race of the year. I love it.

Hilary: Yes, that's beautiful.

Mark: That's about as far of a distance as I could go. I'm not going to make the Olympic distance team, but I do love to run.

Hilary: If I weren't the CEO of GridPoint, I would be?

Mark: I would say I would probably pursue some path for public service. I think it's really important to do something to benefit something bigger than yourself. I would probably pursue public service in some kind of fashion, some way to make an impact. Obviously, for right now, I'm very focused on making GridPoint successful today and tomorrow and next week and next year.

Hilary: Finally, to me, climate positive means?

Mark: To me, climate positive means trying to create a business that makes an impact. I think that, really, the purpose of a corporation is to find profitable solutions to the world's problems. I heard Microsoft's CEO say that. I'm going to say recently, so it may have been a little ways back. I just love that answer so much because we are trying to build a fantastically profitable business that makes great impact, but we're trying to do it in such a way to solve some of the world's toughest challenges and problems. If we can do that, then we're going to create all the kinds of impact we want economically, from a sustainability perspective, and beyond.

Hilary: Wonderful. We share that at Hannon Armstrong and it certainly makes it more fun to go to work.

Mark: That's right.

Hilary: Well, Mark, thank you so much for taking the time to talk to me and share GridPoint's successes with our listeners.

Hilary: If you enjoyed this week’s podcast, please leave us a leave a rating and review on Apple and Spotify.  This really helps us reach more listeners. 

You can also let us know what you thought via Twitter @ClimatePosiPod or email us at

I'm Hilary Langer. 

And this is Climate Positive.