The cost of solar energy has seen a remarkable decrease in recent years, marking a significant milestone in our transition to sustainable energy sources. However, this transition remains out of reach for many, as financing gaps create a divide between homeowners and renters.

Enter Fram Energy, a startup on a mission to bridge this gap and drive a more equitable energy transition. They recently won the DOE Solar Prize Ready! Competition, with the support of Streamline, which is a testament to the fantastic work they're doing.

The Challenge: The "Green Premium" Barrier

As consumers, we often encounter the concept of a "green premium," where climate-positive products come with a higher price tag. This premium restricts adoption to those who can afford to prioritize the environment and invest in sustainable solutions. Until green products become both cheaper and better, the goal of mass adoption remains elusive.

Home energy upgrades, including solar panels, heat pumps, insulation, and energy-efficient appliances, now offer a promising solution. Over time, these upgrades pay back the initial investment through substantial savings on energy bills. However, there's a catch: these installations are initially expensive.

Innovative Financing: Paying for Savings

Fortunately, a wave of innovative lenders has emerged, offering a solution that allows homeowners to pay for these upgrades gradually. Instead of a fixed monthly payment, homeowners pay a percentage of the energy savings they achieve. This approach not only reduces their energy bills but also pays off the loan simultaneously.

The Problem for Renters: "Split Incentives"

However, this financing model primarily benefits property owners living in their own buildings. The equation changes for tenants, as the cost savings are experienced solely by the tenants themselves— not the actual owners of the property.

In other words, property owners have no financial incentive to invest in energy-efficient upgrades because they would bear the costs directly while the tenants reap the rewards.

This dilemma is what Fram Energy calls the "Split Incentives" problem.

Fram Energy's Solution

Fram Energy has taken up the challenge of solving the "Split Incentives" problem for both multi-family and single-family homes, a crucial step in achieving an equitable mass energy transition. Their innovative software enables property owners and tenants to fairly split the energy savings, unlocking profitable deployment of energy retrofits.

Fram Energy positions itself as a "virtual utility", becoming the entity that bills tenants for their electricity. Their product give the tenant a solar discount as well as capturing returns for the property owner. In this way, they turn investments in solar or other home energy upgrades into a win-win for owner and tenant. Tenants save through clean energy, and property owners make attractive returns, decarbonize their portfolio and have a more differentiated value proposition for their property.

Join the Cause

The road to a greener future is not just about adopting clean energy but also ensuring that everyone, regardless of their housing situation, can benefit from it. Fram Energy's pioneering work in tackling the "Split Incentives" problem is a testament to their commitment to a more equitable and sustainable energy transition.

If you're passionate about transitioning to a greener future, Fram Energy will be looking for mission driven talent in the future. Whether you're an expert in the field or looking to start a career in climate-focused work, Fram Energy welcomes you to be part of their journey towards sustainable energy! Follow Fram Energy on LinkedIn to keep up to date on roles opening up.

For property owners seeking profitable and hassle-free solar solutions for multi-family or single-family assets, connect with Fram Energy via email at charlotte@framenergy.com. Take the first step towards making your properties more sustainable and contributing to a cleaner planet.

Streamline's Impact

"Streamline Climate found us the opportunity - we would never have applied without you!"

This was the first of many grants we are collaborating on. This is only the beginning for Fram Energy!