We’re at a critical juncture right now where real choices are being made by data centers between investing in grid capacity and defecting to off-grid solutions. Bring your Own Capacity (BYOC) can mean building a new single-cycle gas power plant or it can mean installing thousands of batteries in the local community. Done right, investing in local community resources will reduce costs for everyone. But the overwhelming odds right now point to scenarios in which data centers drive up demand and energy prices continue to skyrocket. Where utilities once feared DERs because of the loss of revenue, they are now finding that DERs may be the best hope for solving near term load growth challenges and affordability at the same time.

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Aristotle and WEATS are unlocking new demand-side energy markets by creating trust on all sides. As part of that effort, we’ve revamped our Registry to focus on better understanding how DER portfolios contribute to grid resilience and carbon reductions. Here’s what’s new.

GridScore and CarbonScore: Now Live in the DER Registry

Our redesigned DER Registry is live, and two new metrics sit at its center.

GridScore answers a simple question: is this asset helping when the grid needs it most? It measures the share of a DER’s energy savings that occur during the top 10% of demand hours. A rooftop solar system that produces steadily all afternoon scores differently than a battery that dispatches precisely at peak. GridScore captures that difference.

CarbonScore answers the emissions question with the same precision. Rather than relying on annual average grid intensity, CarbonScore calculates the actual kg of CO2 avoided per MWh of energy displaced, using the carbon intensity of the grid at the hour the savings occurred and the related carbon savings associated with primary fuel consumption. For buyers making procurement or sustainability claims, this is the defensible number auditors and regulators expect.

Every enrolled asset is independently measured and scored. The data is open to market participants, transparent, and backed by meter-level verification. Explore the registry to see how different types of projects stack up.

We’re also getting ready to introduce Aristotle, our conversational interface for the platform. Tell it about the energy program you want to build, and it will help you design and set it up. We’ll have more to share soon.

Us at SF Climate Week: April 21

We’re hosting a panel during SF Climate Week, co-sponsored by AECOM:

Unlocking a Greener Grid: DERs, Electrification, and the Future of Energy Tuesday, April 21 | 5:00 to 6:30 PM | AECOM HQ San Francisco

The conversation will focus on what it takes to make distributed energy resources bankable: transparent measurement, credible certification, and transaction systems that work.

Our panelists:

• Ari Matusiak, CEO of Rewiring America

• Michael Lee, former CEO of Octopus Energy, North America

• Sarah Millar (Moderator), former VP at Renew Home

• McGee Young, CEO of WattCarbon

If you work in DER development, utility program design, clean energy procurement, or electrification policy, this is your room. The event is free and in-person. Register here.

Community Energy Standards for Data Centers

In March, we joined a panel at BayREN’s Codes and Standards Forum on Powering Data Centers: Balancing Growth with Sustainability and Affordability, alongside speakers from PG&E, the cities of San Jose and Santa Clara, Energy Solutions, and Caliber Strategies. (Full session recordings and slides are available on BayREN’s site.)

One number from PG&E’s presentation stood out: 7,250 MW of data center load is currently in their interconnection pipeline, with 3,550 MW already in final engineering. To put that in perspective, PG&E’s entire system peak is around 30,000 MW.

PG&E’s proposed Electric Rule 30 focuses almost entirely on transmission-level interconnection, cost responsibility, minimum demand charges, and 15-year service commitments. What’s missing from that framework is any requirement for these new loads to invest in local energy resources. A 100 MW data center in San Jose will pay for its transmission upgrades, but there’s no mechanism asking it to support rooftop solar, storage, or efficiency in the community whose grid it now shares. Cities like San Jose and Santa Clara are starting to set their own standards (San Jose requires carbon neutrality depending on energy provider), but there’s no consistent measurement infrastructure behind those requirements.

That’s the gap we’re working to fill. Demand-side energy markets need two things to be enforceable: independent measurement of what distributed resources actually deliver, and certificates that prove it. We’re building both. If your organization is working on data center energy policy or community energy programs, we’d welcome the conversation. You can reach me directly at mcgee@wattcarbon.com.

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Early on this journey, we found ourselves dealing with a bunch of novel situations, where the path to an hourly savings value was unclear and we wanted to make sure that we were doing things in a way that made sense to the rest of the community. Fundamentally, M&V is a trust-based project, and we wanted to be as open as possible about our approach. We recruited a small group of experts from within the community to serve as an advisory board and started writing methodologies that reflected how different organizations were trying to measure their impacts. Some of this work was related to carbon accounting, but mostly it dealt with the question of energy savings. Today, these methods are found at https://methods.openeac.org/ and reflect a mix of different types of interventions, data types, and outputs.

The purpose of the OpenEAC Alliance is not to serve some sort of gatekeeping function, but rather to create a shared space where best practices can be identified, complicated questions can be discussed, and ultimately where the core methodological approaches to valuing demand-side energy resources are hosted.

Demand Efficiency

As I described in an earlier blog post, the basic premise of energy efficiency is being challenged by a new era of load growth paired with renewable energy. Energy (how much) is cheap. Capacity (how fast) is expensive. Energy pays for capacity, but too much energy demanded at the wrong time means that more capacity will be required. This is a delicate balance for utilities to strike, and most don’t have the resources required to do so in an effective way.

Even so, if there is one core tenet of this new era, it’s that “demand efficiency” has superseded “energy efficiency” as the prime directive of demand-side energy policy. The value of demand side energy resources is a function of how well they help manage the balance of supply and demand on the grid. So for a given asset, whether it is a dispatchable battery, a non-dispatchable energy efficiency project, or a heat pump that combines both functions, the fundamental question is not how much energy is being saved volumetrically, but rather what time of day is the energy being saved and how does that line up with what the grid needs?

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On Thursday of this week, the OpenEAC Alliance will hold its quarterly meeting. The above linked slides represent a starting place for thinking more specifically about M&V as it relates to Demand Efficiency. I’m sharing them out ahead of the meeting in an effort to engage in a broader dialog with the community. Is this the right way to think about the problem in the first place? How should we go about understanding core concepts like capacity factor as they relate to DERs? How should we proxy what value would be delivered to the grid?

These questions will have to be answered if DERs are going to function as grid assets. We are long past the days where all kilowatts are created equal and it remains to be seen whether utilities or third parties will control most of these devices. In either case, it will have to be transparent to all market participants where the value of their assets comes from, which means that even where the utility is owning and operating DERs, their planning teams will have to answer these same questions.

If this is an interesting topic to you or your colleagues, please feel free to attend the OpenEAC Alliance meeting on Thursday. If timing is challenging, feel free to reach out to us with your thoughts as we continue to drive forward on these questions.

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The response, so far, has been a combination of slow-rolling interconnection queues and reallocating costs to data center developers. Ohio now requires data centers to pay for 85 percent of their subscribed capacity regardless of actual usage. California’s SB 887 would make data centers pay full infrastructure costs in exchange for expedited permitting. These measures are fundamentally defensive. They slow the problem without solving it.

Like everyone else in the energy industry, we have been doing a lot of thinking about this issue. As energy consumers, we’ve seen our rates increase, even before data centers starting adding stress on the grid. As domain experts, we know that there are elegant solutions possible. We also know that existing regulatory and market pathologies prevent many of these solutions from getting deployed in the first place.

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A few months ago, our friends at Piclo Energy started talking about ACE - Accelerated Community Energy. The basic idea builds on a lot of the work we’ve been doing with our Repowering Communities initiative, and with other partners like Rewiring America, to figure out how to source new energy capacity by deploying distributed energy resources.

After a few conversations with the team at Piclo, we realized that our two platforms would actually complement each other quite nicely. Piclo’s marketplace enables procurement and price discovery for DERs. Aristotle and WEATS provide the measurement and verification and system of record required for robust demand-side energy markets.

Community Energy

We decided to collaborate around our shared vision for Community Energy. We wondered what it would look like if utilities and regulators could require data centers to invest in local clean energy development. Could they implement a sort of “Community Portfolio Standard” in which the data center would procure a certain amount of its energy from local distributed energy resources, and receive credit for the new capacity available to the grid?

Today we are excited to release the first version of that vision in the form of a white paper that we authored together. Linked below, the paper explores how utilities can mobilize new investments into community-based energy projects so that, even as they say yes to new data center development, utilities and regulators are also protecting their customers and ratepayers from increased rates, and ensuring that jobs will be created within their communities.

Accelerated Community Energy White Paper (link)

Obviously, a white paper is just a first step. We are looking forward to rolling out this vision over the next few months with our early partners. But the choice for utilities is now clear - do you trade away your customers’ future in exchange for quick profits? Or do you ensure long-term investments in your communities? The next few months will reveal where they really stand on this question.

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1) Energy Efficiency is dead, but not for the reason you think it is

Last week, the Ad Hoc Group and Alliance to Save Energy published a report outlining how utilities could look to demand-side energy resources to solve their capacity challenges for siting new large loads. The most important takeaway from their report, aside from the obvious fact that demand-side energy resources are the cheapest, easiest and fastest to deploy in most parts of the country, is that energy efficiency isn’t actually the desired goal.

The purpose of deploying demand-side energy resources is not energy efficiency, but rather demand efficiency. In the era of cheap renewables and high load growth, reductions in energy consumption really only matter insofar as they coincide with peak demand.

The implications for the energy efficiency world are profound. First and foremost, it means that all purported savings must be calculated using real world data, and done so on an hourly basis. Any sort of deemed measures, annual reporting, or adjustments based on what other people are “already” doing are simply a non-starter in the world of demand efficiency. Second, I expect to see energy efficiency programs generally start to be phased out. The image below (thanks Claude) highlights the problem. If the problem is grid capacity, we’re only talking about certain hours in a year that need to be tackled. Otherwise, adding load is a net positive for the grid (assuming that we’re also bringing more renewables online at the same time).

Energy “efficiency” assumes that all energy savings are created equal. But if your energy savings happen at noon and mine happen at 6pm, the grid is going to value mine a lot more.

Here’s how to think about demand efficiency. Imagine that for any given grid, there’s a finite amount of capacity to deliver the power we need (roughly analogous to a water pipe). There are a bunch of fixed costs that we have to pay to maintain the grid. We pay for these fixed costs through the electricity that’s delivered through the grid (think water flowing through a water pipe). The more electricity that we can send through the existing grid and charge people for on the other end, the lower the fixed costs per unit of electricity (we all pay a little bit less for infrastructure). However, if we have to build new capacity (get larger pipes for those peak days), our fixed costs go up and we have to pay more, even if the total amount of power that goes through the new wires is the same as what came before.

To put it in other terms, every additional kilowatt (kW) of capacity that we have to add ends up costing us money. Every additional kilowatt-hour (kWh) of electricity that we serve ends up saving us money. Energy efficiency might end up costing us money if it targets the wrong time of day! But energy efficiency when the grid is otherwise constrained saves us money, because it helps prevent the need to build new capacity.

Demand efficiency maximizes the number of kWh served by the grid while minimizing the amount of kW capacity that needs to be added to serve that kWh.

2) Demand Flexibility is valuable, but not for the reason that you think it is

Naming conventions are not a strong suit of our industry. While I will defend “PPAs for VPPs” until the bitter end, ask any random stranger to explain any of the acronyms that litter our industry white papers and you’ll be left with blank stares and baffled bemusement. Over the past five years or so, in an effort to not turn off the general public, our industry has coalesced around “demand flexibility” as the way to signal the value of demand-side energy resources. Do your laundry a little later, plug your car in earlier, activate your battery when called upon, etc. This “flexibility” is meant to resemble a giant coordinated grid-balancing machine. It’s not just a virtual power plant, it’s a virtual “peaker” plant, orchestrating thousands of different devices in an effort to optimize power flows!

This type of flexibility is cute until a 50 MW data center comes to town. Then it’s irrelevant. The problem at hand is not fiddling with marginal resources, but rather identifying the main drivers of peak energy use, and finding permanent, scalable solutions to reduce load during peaks without sacrificing customer comfort or further raising bills.

Another thing to consider is that depending on what part of the country you are in, your peak may be totally different than somewhere else in the country. These peaks are determined by power resources, historical energy use patterns, industrial clusters, and more. There is no one-size-fits-all solution.

But this is precisely why demand flexibility is an important, and valuable concept. Not because of the implied temporal shifting (though this can be helpful sometimes), but because you can mix and match demand-side energy resources depending on the particular peak challenges you face. Demand-side energy resources are diverse, by their very nature, and will most often be the most widely available precisely when local grid peaks are at their most severe.

Rather than stipulating ahead of time what type of interventions are needed, a truly flexible demand-side energy resource strategy should focus on finding the peaks and sending the signal to the market for savings when the grid needs them most. Let the fact that there are diverse demand-side energy resources available be a feature, not a limitation of new demand-side energy markets. As the Ad Hoc group’s paper shows, a typical peak could be solved for with any combination of resources that are able to deliver during the required time frame.

3) Utility monopolies are bad, but not for the reason you think they are

Most Americans hate their utility. Over the past five years, favorability scores for utilities have dropped by nearly 50%. Three in four Americans believe that some sort of consumer choice for utility services would be preferable to a natural monopoly. Political candidates are riding a wave of dissatisfaction, stemming from rising rates and declining service, winning statewide elections and promising reforms. Very few economists or pundits stand up for utility monopoly rights and even those who do caveat their support with a litany of criticisms.

There are probably lots of valid points to be made, and its hard to blame people for being frustrated when their bills continue to go up, but the monopoly that we should worry more about isn’t the utility that’s selling you power; the monopoly we should pay attention to is the utility that is buying energy services from you.

The utility monopoly, in this case, is a monopsony - a single buyer rather than a single seller. They are buying energy services - everything from the solar on your roof to the managed EV charging in your garage to the energy efficiency in your attic. When they buy these services from you, they don’t have to spend money buying them elsewhere. Utilities use a tool called an Avoided Cost Calculator to determine how much they should spend on buying these services from you. You are, in essence, competing with a natural gas power plant for utility payments for your energy services.

If you choose not to accept a utility payment for your energy services, they will instead turn around and buy more or less the same service from a traditional power plant. There’s no real incentive for a utility to pay more for demand side energy resources, even if it means the grid gets cleaner, infrastructure costs go down, or consumer bills go down. You have basically zero bargaining leverage.

Imagine, though, what would happen if there were multiple buyers for your energy services! What if your rooftop solar or your battery or your attic insulation could be sold to another energy customer? If these energy customers competed for your services, the price that you could command would go up. I’m going to throw in an economics graph below to show how this works. Economists have figured out that competitive markets improve the bargaining power of sellers so that buyers can no longer capture monopoly rents from the market.

So what does this mean for demand-side energy markets? With all the drama over data centers needing to BYOC (Bring Your Own Capacity) and BYONCE (Bring Your Own New Clean Energy), perhaps it’s time to let them become buyers in the market for demand-side energy resources too. As our friends at the Ad Hoc Group pointed out (and before them Rewiring America and ACEEE), demand-side energy resources are the perfect complement to data centers. The main thing lacking is a market mechanism that allows them to efficiently procure this capacity and make a legitimate claim on it.

What we need are new open demand-side energy markets, embedded with measurement and verification, that support all types of distributed energy resources, and that come with systems of record that prevent double counting, that allow data centers and other large loads to procure these resources alongside traditional PPAs for generation. The utility still has a role to play here, of course. They need to specify the hours that matter and certify the savings calculations. They will have visibility into distribution networks that allow for better targeting of demand-side energy resources on a time and locational basis. Most importantly, utilities are custodians of economic growth and consumer welfare in our communities. Our utilities are essential participants in the well-being of our communities. They show up when the storms arrive and make sure that when the hottest and coldest days come that we all have the power we need to survive.

But it’s an all-hands-on-deck moment, where load growth threatens to overwhelm our capacity to manage it. If costs start to spiral, expect the political winds to blow in favor of complete restructuring of the utility ecosystem. If we don’t choose this moment to invest in our communities, keep costs in check, and minimize the new fossil fuel infrastructure we build, we should expect to pay the price for the next half-century or more.

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Consensus is emerging that the deployment of demand-side energy resources is going to be the primary way in which large new electrical loads are going to be integrated into the grid. Even the current administration is asking grid operators to allow for expedited review for data centers that can accommodate requests for flexibility. The reason for this is simple. There are a handful of hours on a handful of days in which the expected demand for power is going to exceed the capacity of the grid to supply it. Something has to give, and since a single data center can use the same amount of power as a million homes, the data center is the obvious choice for curtailment.

However, the amount of capacity that needs to be made available can vary significantly. It may be that just a few megawatts need to be curtailed, in which case, even though the data center may be the largest single contributor to demand, the best available flexible resources may be found outside of the data center. A fleet of distributed batteries, controllable EV charging loads, or, on a more permanent basis, more efficient air-conditioners, are all capable of delivering the required capacity savings to the grid. Because there are a variety of resources that might be tapped, grid planners, DER developers, and policymakers are excited about the future of distributed capacity markets.

Unfortunately, current market solutions are proving inadequate. Wholesale capacity markets discriminate against DERs, and in large swaths of the country utilities are vertically integrated, meaning that they control both generation and distribution. Demand response programs are notorious for paying pennies on the dollar and even the most successful demand response programs, like DSGS in California, suffer from the unpredictability of political winds.

It’s time for a new approach to demand side energy markets. We need a system that prioritizes lower rates, more resilience, and a cleaner grid. To date, we’ve seen no evidence that the current system will yield any of these outcomes - in fact, utility bills are rising, the grid seems ever more fragile, and carbon emissions are back on the rise. We can do better.

PPAs for VPPs

Today, we’re excited to announce a first-of-its-kind program that will catalyze investments into distributed clean energy, bring lower electricity rates for all customers, and build resilience in our communities. We call it Repowering California.

While this initiative is designed to work within California’s unique system (more on this below), it can be deployed anywhere in the country and in most places on the planet. We are truly on the verge of a transcendent ecosystem of distributed energy resources enabling the grid to absorb the largest influx of new demand since the 1950s.

The mechanism is simple and takes most of its inspiration from the procurement of renewable energy on the supply side. We imagine a power purchase agreement (PPA) in which a large load, like a datacenter, can directly procure “negawatts” or “flexiwatts” from distributed energy resources on its same grid. In aggregate, this procurement would be thought of as a distributed capacity contract, or more commonly a “virtual power plant” (VPP). Load-shifting heat pumps, energy efficiency projects, and controlled devices will be deployed so that energy demand goes down when spare capacity on the grid is needed. The PPA contract will pay these resources for their ability to reduce demand during critical peak hours.

The goal is to allow California to double the utilization rate of its electrical grid while reducing rates on consumers in the process. This happens by more efficiently using existing grid resources (more energy consumption in the middle of the day when solar is abundant and at night when plenty of wind and hydro can be utilized) and using the additional revenue from serving new loads more efficiently to fund infrastructure investments. We want our utilities to invest in the infrastructure needed to power the electrified economy, but to do so without raising the costs of electrification for consumers. This is possible if we use our grids more efficiently.

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How the Program Works

Repowering California invites large energy users, utilities, and DER developers to work together to provide the capacity needed to serve the entire state’s energy needs at lower cost with an eye towards resilience in the face of climate change and other challenges. It builds on California’s existing demand-side energy markets - collectively known as Market Access Programs - to recreate the same fundamental economic principles that allowed large-scale renewable projects to flourish in this state decades ago. And it uses WattCarbon’s unique data infrastructure - Aristotle and WEATS - to make sure that the savings are real and that they aren’t being double counted.

Here are the key pieces:

• Corporate PPAs for VPPs:

  • A PPA for a VPP allows a large energy user to provide financial support to the deployment of distributed energy resources. The animating principle of a PPA is the advance market commitment, which allows projects to be financed at lower interest rates. In essence, the large energy user is committing to buy the savings at a guaranteed rate. This guarantee allows the project developer to secure financing at favorable rates and lowers costs for consumers.

• Market Access Program Integration:

  • California currently operates a set of Market Access Programs (MAPs) in which energy efficiency savings are paid out to market aggregators on the basis of the “system benefit” value of energy efficiency projects - effectively the cost of generation, transmission, distribution, and overhead. These programs provide the critical connective tissue between corporate PPAs and the capacity credits that they need to be able to claim. Each one of the state’s investor-owned utilities plus several of its CCAs and RENs runs a Market Access Program. As a result, every project enrolled first gets credited by the state for its system benefit and certified by the utility for its capacity savings. This leaves the PPA offtaker with certified capacity credits that can be used as part of an agreement to site a new load or expand an existing service. In short, the Market Access Programs provide a framework where private companies can fund demand flexibility projects, submit them to their local utility, and have the capacity savings certified so that they can ensure no net new grid impacts.

• Customer Dividends:

  • Consumers are the ultimate winners here. Instead of just receiving the single stream of payments from the Market Access Programs, now consumers have the opportunity to monetize their investment through a PPA agreement as well. In some cases, the payment for the capacity might exceed the cost of the equipment in the first place! WattCarbon has been trialing this concept with its partners for the past few months. For the first time, these contractors and DER developers have access to automated measurement and verification of all of their projects. With access to a new revenue stream, projects that were formerly out of reach, suddenly become possible (see, e.g., link).

Program Vision & Next Steps

We are now opening up Repowering California to additional corporate partners, utilities, DER developers, and contractors who want to be part of the reimagining of our state’s energy future. Of course we couldn’t have gotten this far without our early partners like Harvest, QuitCarbon, Rewiring America, Northern Pacific Power, Powderwatts, Electrify My Home, Atrium, or the work done by so many to bring the market access programs to life. California is blessed with abundant natural resources that give us access to solar, geothermal, hydro and other forms of clean energy. But we also have aging infrastructure and fire risks that are being paid for through higher electricity bills. If our bills continue to rise, our economy will falter and our state will suffer. Giving large energy users the option to procure distributed capacity creates a financial incentive to better utilize existing grid resources, effectively reducing the burden on consumers. Plus, giving consumers another avenue for monetizing the investments they are making in their homes and businesses blows tailwinds into the state’s economy and unlocks the energy we need to stay competitive.

If you are a contractor or DER developer, learn more about how to participate at https://dividend.wattcarbon.com.

If you are interested in setting up a PPA for a VPP, please reach out directly.

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If tapping into DERs happens at scale, the focus will inevitably shift to markets. To date, markets for demand-side energy resources have mostly been limited to 1) ESCO agreements, in which a company offers to install new energy saving equipment in exchange for a share of the bill savings; 2) utility or wholesale energy market programs where a third party aggregator delivers resources to a single buyer (in economics, this is called a monopsony).

In a world in which data centers and other large loads are buying demand flexibility capacity from other DERs, a new wrinkle is introduced to existing markets. Suddenly you have multiple buyers in the market at the same time, and you may have the same DER sell to more than one buyer at a time. For example, if I have a battery that can dispatch daily, I may have one buyer that needs my capacity twice a year, and other that needs it twice a month, and yet another that needs it twice a week. I should be able to sell to each of them, but not at the same time.

Emerging DER markets need standardized Measurement and Verification (M&V) - we need to know how much was delivered; and a System of Record - we need to make sure that the same capacity isn’t being sold to multiple different offtakers at the same time. Standardized M&V means that we are measuring DERs using a consistent, transparent set of methodologies; a system of record means that we need to assign a unique serial number to each watt-hour that is transacted. The serial number must match up to the source and to the M&V. This is the settlement layer that DERs need to be able to scale to meet the moment.

Our Big Product Announcement

Since performance-based contracts were introduced in the late 1980s, M&V has always been tacked on as an engineering exercise that was performed periodically to validate the models used to estimate potential savings. This months-long exercise required data collection, an agreement on methodology, various bespoke adjustments, and if the numbers didn’t add up, it would often end up in a lawsuit. Companies like Recurve figured out how to perform M&V at scale, but being able to perform M&V on-demand has heretofore remained impossible.

When we launched Aristotle AI back in April, we got close to this goal. And over the past few months, as we’ve refined the platform, it has become more and more a reality.

Here’s why it’s important to be able to do M&V on demand. If you are a DER developer, the thing that’s most important for you is the performance of your asset. And if you are trying to close a customer, get financing, or sell your capacity to an offtaker, there is nothing more powerful than being able to point to independent, revenue-grade M&V that shows exactly what your assets are delivering.

The challenge - to date - has been a chicken and egg problem. Historically, this M&V has been expensive. Again, it’s been something that engineers do, and never at scale. If you’ve deployed a hundred DERs, you might end up spending tens of thousands of dollars on third party audits before you are able to sign an offtake agreement. (As an aside, this is how the carbon offset world works and part of the reason why it is so broken).

Because Aristotle AI is now able to provide end-to-end, automated M&V for any DER asset, we are extremely excited to announce that we can offer FREE M&V for any company that needs to prove the value of their energy resources.

We believe that the motive force of decarbonization will come from unlocking markets for DERs. As the “assayers” of the energy transition, WattCarbon is uniquely positioned to enable the thousands of companies who are creating, financing, and deploying the energy assets that will be foundational to the energy transition. Providing them with a way to prove their worth will be the most impactful thing we can do as a company.

If you give away your M&V for free, how will you make money?

I know what you’re thinking, and it’s a good question. We lay out the answer on our pricing page, but to save you a click, the short answer is that many of our customers use our API outputs in their own tools and others want custom reports based on the savings results. Additionally, we provide a settlement-grade Registry (WEATS) that’s used for transactions. In our view, it’s fine if all you want to do is show off your impacts. Once you want to use that data for official purposes, it’s seamless to make the transition.

Most companies take inspiration from previous innovators (aka, the “X for X”). We don’t see a direct antecedent to WattCarbon in that regard, but there is a similarity between the rise of DERs and the way that e-commerce emerged in the early 2010s. Where once PayPal and Braintree stood as innovators, Stripe allowed e-commerce to be programmed directly into an app. Today, ESCOs and market aggregators plug DERs into legacy systems the same way that PayPal and Braintree did for early e-commerce companies. Automated M&V changes the value proposition of DERs the way that programmable financial infrastructure changed e-commerce. You can now directly program your DER to enable it with revenue-grade M&V and a settlement-grade system of record. The potential is limitless. This is an exciting time and WattCarbon is looking forward to working with those companies on the vanguard of the energy transition.

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To begin, it’s worth looking back a little farther at the WattCarbon trajectory over the past few years. We started out trying to figure out how to quantify emissions impacts from demand-side energy resources. This drew on our previous experience at Recurve building measurement and verification tools for utility programs. We knew that hourly attribution was really important and wanted to bring together supply-side carbon accounting with demand-side energy flexibility.

We ran into headwinds from multiple directions. To begin with, the carbon-offset industrial complex was more formidable than expected. The overwhelming opposition to considering decarbonization (it has to be a carbon “removal”) as a plausible pathway to net zero and the variety of arbitrary and self-serving obstacles placed in the way of companies trying to get recognized for their impacts ruled out any headway on that front.

As an alternative approach, we tried to get organizations like the WRI (author of the GHG Protocols) and newer entities like EnergyTag to recognize demand flexibility as a clean energy resource. But these groups insisted that only energy generation would qualify as a Scope 2 offsetting energy credit. The debates between 24/7 energy matching and “emissionality” camps have grown increasingly disconnected from the realities on the ground.

While we were proud of our work to launch the first demand-side energy EAC market last year - and even today you can see in the WEATS Registry that these projects are yielding carbon reductions - we took a step back in December to build out our measurement and verification stack. In April, we launched Aristotle AI, our next-generation M&V platform that provided automated, hourly demand-side energy savings calculations.

We haven’t given up on decarbonization - in fact, it’s more of an imperative than ever before. But the reality is that the constructs that we have used in the past - carbon offsets, net-zero, environmental attributes, etc., - are now much less influential in driving investments into clean energy resources.

AI and Energy

The dominant theme of this year’s NYC Climate Week was AI and Energy. The consensus seems to be that around 100 GW of new data center load will arrive on our grids over the next 5-10 years. “Load growth” has breathed new life into the energy sector and is intersecting with resilience and lingering (if somewhat tenuous) commitments to lowering carbon emissions from the sector.

Secular load growth is manageable for utilities - but the ferocity of new interconnection requests has induced panic amongst utility executives facing the twin challenges of rising prices and cascading infrastructure failures. Something has to give.

Enter demand flexibility. The story goes something like this. Our current energy systems are sized to be able to provide power on the hottest day of the year. Adding a data center pushes the system beyond its limits (requiring both new generation and larger wires). Before a data center interconnection agreement can be approved, new generation must be constructed and upgrades to the system to carry the power to the data center must be completed. If these costs are passed along to ratepayers, bills will continue to rise.

The thing is, outside of really hot days, the current grid is actually underutilized. We actually have plenty of spare capacity most of the time. What we really need is to figure out how to shift current peak load to non-peak times of the day.

As it turns out, there are plenty of solutions lining up to provide this flexibility capacity. Batteries, EV chargers, smart thermostats, Bitcoin miners, and many other technologies are available to perform this service. And for those times of the year where demand is consistently high, there are energy efficiency measures like replacing old space heaters with modern heat pumps that stand to permanently reduce load during these peak periods.

Interestingly, the challenge of accounting for a demand-side energy resource is no different if you are trying to determine its carbon impact versus its energy impact. The same measurement and verification and system of record is required for both. Perhaps ironically, the very infrastructure that we had built at WattCarbon to bring carbon transparency to demand-side energy resources is also core to unlocking the value of these same resources to solve the problem of load growth.

Why this is all exciting

Over the past three months, we have been deploying our Aristotle AI platform across the entire energy sector for the purposes of providing measurement and verification for demand flexibility and energy efficiency. In addition to previously announced customers like Prologis and Rewiring America (check out their new report here), we are excited to be working with companies like Siemens, R-Zero, Peachtree Infrastructure, Elevate Energy, PowderWatts, Northern Pacific Power, and more to provide settlement-grade M&V via our platform.

Even more exciting is work that with organizations like NYSERDA and BayREN to develop transactional demand-side energy markets that is now extending across utilities and hyperscalers to unlock what we have been calling PPAs for VPPs. Once we make demand-side energy resources procurable - again, the basic construct is the same, the EAC just quantifies capacity in this case in addition to carbon - we will unlock what will likely become the largest energy market on the planet.

So as we take stock of NYC climate week, a couple of things are clearer than ever before. First, the pace and scope of decarbonization is increasing, not because of the moral imperative, but rather because of the economic imperative. The value of clean energy will now be unlocked through conventional markets, rather than driven by the value of the environmental attribute itself. That is, we will see the energy transaction be the primary driver of value with the environmental benefit as a secondary, though still relevant attribute of the transaction, rather than the other way around.

Second, demand-side energy markets are still mostly organized around the prerogatives of regulatory bodies, and need to substantially evolve if they are going to rise to the challenge. Without load growth, energy efficiency and demand response are performative. But in an era where falling short means triggering a blackout, “good enough” can no longer be good enough. Settlement-grade M&V is required for markets and systems of record like WEATS will be critical to ensuring that no double counting happens.

Collectively, these shifts mean that these are exciting times for us at WattCarbon. It’s been quite the journey from the earliest days of figuring out how to think about hourly carbon accounting as it relates to demand response to the realization that the underlying technology that we have built will be instrumental to the growth of a giant new clean energy market.

I’ll conclude here by noting that amidst everything else last week, ACEEE released a great report on how demand side energy resources can be part of a decarbonization strategy. Check it out and get in touch with us if this is something you’ve been thinking about as well.

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1. Update from Travis Sikes on the OpenDSM (OpenEEmeter). Last month, a new version was released that will be incorporated by reference into the OpenEAC methodology.

2. A new methodology for calculating the savings from controls that turn equipment on and off.

3. A deep dive with Harvest on the methodology for calculating savings from grid-aware heat pumps.

4. A discussion on “automated additionality” for carbon credit certification.

Because we had trouble with Zoom last time, the meeting has been upgraded to a Google Meet link. Join here: https://meet.google.com/sjw-hkbj-bwf

Thank you!

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But the team buried themselves to get Aristotle released back in April, and we’ve been fortunate to work with really great partners who believe in what we’re building - companies like Prologis and organizations like Rewiring America, and friends from throughout the industry who have stepped up in ways that will forever be part of our story. We’re able to continue to imagine a world in which demand-side energy markets scale to unlock the $10 trillion in investment we need to decarbonize the built environment. Today we are able to keep going on this journey because Matthew Stotts and Jahed Momand at Cerulean Ventures, Josh Cohen at City Light Capital, Tom O’Keefe, and Priscilla Tyler and the rest of the team at True Ventures also believe in this vision and were willing to back us to support our work.

Those of you close to the startup world know that this is a challenging time to raise capital. I’m particularly grateful for all of the intros, all of the meetings, and all of the advice that we have received over the past several months as we’ve tried to navigate these unsettled waters. Now it’s time to repay the favors by rolling up our sleeves and getting back to work. I want to launch some VPPAs for VPPs, see more carbon credits sold for installing heat pumps, automate M&V for new ESCO business models, deploy Green Equity Finance to replace all of the expiring tax credits, and help all of the other companies pushing on the energy transition find traction to accomplish their own goals. The stakes have never been higher and the alternatives never more stark. Let’s go!

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San Francisco, CA – July 17, 2025 – WattCarbon, the industry-leading measurement and verification (M&V) platform for distributed energy resources, today announced the successful completion of a Seed Extension round featuring new investors Cerulean Ventures, City Light Capital, and Tom O'Keefe, alongside existing investor True Ventures. This additional funding will accelerate WattCarbon's mission to become the authoritative "weights and measures" system for the energy transition, providing the transparent, auditable measurement infrastructure that unlocks new markets and maximizes value for clean energy investments.

Transforming Energy Markets Through Rigorous Measurement

As the energy sector rapidly transitions toward distributed clean resources, the lack of standardized, transparent measurement has created a critical market gap. WattCarbon's AI-powered platform, Aristotle, addresses this challenge by serving as the definitive "system of record" for hourly energy attributes, tracking every kilowatt-hour saved and every gram of carbon avoided with unprecedented granularity and transparency.

Unlocking New Value Through Precision Measurement

WattCarbon's measurement and verification capabilities are creating entirely new markets and value streams for distributed energy resources:

Automated Measurement and Verification (M&V): Processes that have historically taken months are now completed in seconds, as WattCarbon combines state-of-the-art data pipeline infrastructure with automated algorithms for calculating hourly energy savings. Any type of energy asset - from whole buildings, to EV chargers, to solar and batteries, are tracked in real-time so that they can be leveraged individually and collectively as functional energy assets.

Energy Attribute Certificates (EACs): WattCarbon's platform generates hourly EACs for every asset, creating tradeable certificates that represent verified energy savings and carbon reductions. This granular approach enables building owners, utilities, and corporations to monetize their decarbonization efforts in ways previously impossible.

Portfolio-Level Intelligence: The platform consolidates data from entire building portfolios into a single, intuitive interface, enabling sophisticated analytics that turn raw information into actionable insights. Users can identify top-performing assets, pinpoint optimization opportunities, and benchmark performance across their entire portfolio.

Strategic Investors Bring Deep Market Expertise

The addition of Cerulean Ventures, City Light Capital, and Tom O'Keefe brings significant strategic value beyond capital:

Cerulean Ventures

Cerulean invests at the intersection of AI, data, and climate, backing founders who create exponential solutions for nature and the built environment.

City Light Capital

City Light Capital is an early-stage impact VC firm. They partner with experienced teams building category-defining solutions in the areas of education, care, and climate where more revenue means more impact at scale, every time..

Tom O’Keefe

Tom O’Keefe is a climate-tech angel investor and policy organizer focused on accelerating capital flows toward decarbonization and climate resilience.

“WattCarbon is solving one of the most fundamental challenges in the clean energy transition – how do we accurately measure and verify the impact of distributed resources at scale," said Matthew Stotts from Cerulean Ventures. "Their platform creates the measurement infrastructure necessary to unlock trillions of dollars in clean energy investments, and drive the energy transition at Earth-scale.”

Addressing Critical Market Needs

The energy transition is creating unprecedented demand for accurate, real-time measurement of distributed resources. Traditional measurement approaches cannot keep pace with the complexity and scale of modern clean energy deployments. WattCarbon's platform addresses several critical market needs:

Utility Scale Grid Management: Providing utilities with real-time visibility into distributed energy resource performance, enabling better forecasting, planning, and integration of customer-owned assets.

Corporate Decarbonization: Helping enterprises develop innovative strategies for accelerating the energy transition and supporting ambitious net-zero commitments with credible data.

Program Optimization: Enabling program administrators to identify high-performing interventions and optimize resource allocation based on verified outcomes rather than projections.

Investment Validation: Providing investors and lenders with transparent, auditable data on clean energy project performance, reducing investment risk and enabling new financing models.

Platform Capabilities Drive Market Transformation

WattCarbon's Aristotle platform represents a fundamental advancement in measurement and verification technology:

• Automated M&V: AI-powered engine tracks entire portfolios of buildings and energy assets automatically in real-time

• Transparent Methodologies: All calculations follow published, peer-reviewed methodologies with full audit trails

• Granular Integration: Ingests data from smart meters, IoT devices, and building management systems at device-level granularity

• Real-Time Analytics: Provides immediate feedback to enhance project optimization opportunities

• Regulatory Compliance: Designed to meet evolving regulatory requirements with defensible, approved methods

Looking Forward: Scaling the Infrastructure for the Energy Transition

With this additional funding, WattCarbon will accelerate platform development and expand its customer base across utilities, enterprises, and program administrators. The company is positioned to become the standard measurement infrastructure that enables the next phase of clean energy market evolution.

"We're not just measuring the energy transition – we're providing the measurement infrastructure that makes the energy transition possible," said Young. "Every successful market transformation requires trusted measurement standards. We're building that foundation for the clean energy economy."

The funding will support continued platform development, expanded market penetration, and the advancement of open-source measurement methodologies through the OpenEAC Alliance. WattCarbon's platform is the only solution capable of measuring and reporting savings hourly across both energy and environmental attributes, positioning the company at the forefront of the energy transition.

About WattCarbon

WattCarbon is the first fully automated M&V platform for demand-side energy resources. Its Aristotle™ engine ingests utility, sub-meter, and device telemetry; applies statistically robust baselines; and delivers auditable savings and carbon-impact calculations in near-real time. For more information, visit www.wattcarbon.com.

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What’s left are local, distributed efforts. It won’t be easy to decarbonize this way. Resources are limited and opposition is real. But as I explain in the podcast, these are the foundational principles of the United States, inherited from thinkers like Adam Smith, Max Weber, Alexander Hamilton, James Madison, and others. National innovation has always followed local innovation in the U.S. We should continue to advocate for national policies that accelerate the energy transition away from fossil fuels. But in the meantime, we should also be rolling up our sleeves and working in our own backyards on positive change we can realize today.

https://modoenergy.com/research/channels/transmission?wchannelid=vtx0dp52da&wmediaid=o3sfcnvi7f

• Virtual Power Plants

• Automated M&V

• Attribute-based Accounting

• Competitive Demand-Side Energy Markets

Below I’ll preview a few themes related to each of these topics.

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Understanding Virtual Power Plants

"Virtual power plant" is a term frequently used in energy circles, though interpretations vary. Broadly, a VPP refers to a coordinated network of demand-side energy assets that collectively deliver value to the energy grid. This value can manifest as generation (e.g., rooftop solar), capacity (e.g., load shifting), emission reductions (e.g., heat pumps), or really any attribute of energy that the market finds valuable.

The core value proposition of a VPP comes from the fact that it changes previous energy consumption patterns. Rooftop solar reduces demand in the middle of the day. Load shifting can increase or decrease demand in different parts of the day. An electrification project changes the fuel that is used to heat a building. In other words, a VPP's value is found in the difference that it creates between "old-business-as-usual" and "new-business-as-usual."

The Role of Automated Measurement and Verification (M&V)

Determining if a VPP genuinely delivers its intended value, whether in the form of carbon reductions, increased capacity, or added generation, requires rigorous M&V. Without clearly establishing a business-as-usual scenario, accurately measuring impact is impossible, akin to dividing without knowing the denominator.

However, defining the business-as-usual scenario can be complex. Heating and air-conditioning loads heavily depend on weather; EV charging patterns fluctuate significantly; even permanent load shifts like solar panels will vary based on the type of building and interactive effects with residents. Automated, real-time M&V, as introduced with Aristotle, makes addressing these complexities feasible.

Beyond Price-Volume Thinking

When discussing VPP value, it’s helpful to move beyond the traditional price-times-volume metric (e.g., dollars per kilowatt-hour). Unlike conventional demand-side energy accounting, a VPP’s value isn’t purely about the volume of energy delivered (or saved); it also hinges on key attributes like timing, location, and the type of energy it displaces. For instance, distributed solar is more valuable in areas where there is lower overall solar penetration, while flexible loads are most valuable when the grid faces supply-demand imbalances. Similarly, a heat pump’s emission reduction value increases as as the electricity it consumes gets cleaner.

VPPs can be thought of as the energy system’s equivalent to accrual accounting for businesses, offering a sophisticated approach to measure and manage demand-side transactions, while factoring in time and temporality.

Competitive Demand-Side Energy Markets

The rapid growth of renewables in Texas, facilitated by ERCOT's open-market policies, provides inspiration for a big idea we have been kicking around: applying Texas-style markets to demand-side energy resources. Imagine if utilities set price signals for VPPs and allowed any demand-side resource aggregation to compete freely. Call it FERC 2222 for the distribution grid. Such an approach could spur innovation, significantly increase grid capacity, reduce consumer costs, and accelerate electrification needed to decarbonize the economy.

Historically, utilities have run programs that trace back to the era of decoupling, when regulators forced utilities to fund energy efficiency. These programs typically offer customers one-time incentives for adopting certain technologies or behaviors. As we know, these command-and-control approaches often discourage long-term investments, leading to inefficiencies, boom-and-bust cycles, and susceptibility to gaming.

By contrast, demand-side markets would operate by sending clear price signals rather than prescribing specific solutions. Utilities could sign sleeved Virtual Power Purchase Agreements (VPPAs) for VPP aggregations on behalf of large customers (like data centers). This more open approach, aimed at the attributes that matter, would encourage market participants to develop organic solutions that incorporate new technology and meet the needs of the local community. Rather than mandating prescribed (often outdated) technology, these markets would incentivize private investment by rewarding good outcomes directly.

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Hopefully these topics seem interesting. Feel free to leave comments below on any of these issues. I’m looking forward to having the conversation as we work through these weighty concepts. More to come soon!

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The provisional agenda is as follows:

1) Welcome and review of existing resources

• www.openeac.org

• methods.openeac.org

• https://github.com/wattcarbon/open-eac-alliance

2) Quarterly update

• New approval process

• Review of existing methodologies

• Deep dive on electrification methodology

• Utility meter data

• Device data

• Building/project only data

3) Q3 roadmap

• Demand response/flexibility methods

• Battery (FIFO)

• Generator fuel switching

4) Discussion

Looking forward to seeing everyone!

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Made possible by an advanced purchase of Energy Attribute Certificates (EACs), representing certified third-party emissions reductions, this partnership is enabling Harvest to bring advanced heat pump technology to underserved communities and shows how smart, strategic funding can accelerate decarbonization efforts, creating tangible benefits for communities and the climate.

Why Heat Pumps Need an Upgrade

Heat pumps have rightfully been celebrated as heroes in building decarbonization. But there's been a challenge: peak heating times—typically morning and evening—coincide with the periods when electricity is most expensive and carbon-intensive.

Harvest’s approach tackles this head-on by pairing hyper-efficient heat pumps with advanced thermal storage. Imagine capturing clean, affordable solar energy midday, storing that energy effectively in a thermal battery, and then releasing it precisely when it’s needed most. That’s what Harvest’s innovative Smart Thermal Battery™ achieves, combining intelligent software, thermal storage, and efficient heat pump technology.

Smarter Storage, Bigger Impact

Harvest doesn't just store energy—it selects the cleanest and cheapest energy available, ensuring maximum carbon reduction. The results speak for themselves: up to 30% energy bill reductions, 90% emissions reductions compared to traditional gas furnaces and an impressive 40% reduction compared to conventional heat pumps.

Harvest’s first collaboration with WattCarbon is centered in a multifamily affordable housing complex in Truckee, California. The Tahoe-adjacent town regularly experiences subzero temperatures. Harvest’s implementation in this geography is a testament to the system’s ability to perform even in cold climates.

But it's not just about cleaner fuel; it's about supporting a flexible, resilient grid. As California’s grid reaches over 54% renewable generation, Harvest’s technology ensures homes tap into abundant solar power, enhancing grid stability and paving the way for broader electrification without additional strain.

Investing Ahead for Maximum Impact

What truly sets this collaboration apart is how companies have stepped up to purchase the Energy Attribute Certificates (EACs) from Harvest ahead of time, ensuring their investment makes a real and tangible difference. By providing critical upfront funding, these forward-thinking companies are closing essential financing gaps, enabling the installation of Harvest’s decarbonization projects in buildings where gas would otherwise be the default choice, and directly driving measurable, verified carbon reductions.

For the initial set of projects, True Ventures, an investor in early stage startups, and the creative force behind the Climate Compass Report and the Climate Action Guide, purchased the EACs from Harvest’s projects in advance so that the money spent on EACs would unlock new projects within the Truckee complex that otherwise wouldn’t have had the funding necessary to get done.

Accurate, Transparent Carbon Tracking

WattCarbon is at the heart of verifying and tracking these reductions. Leveraging Aristotle AI, its robust automated Measurement and Verification (M&V) platform, WattCarbon meticulously tracks every gram of carbon saved through Harvest's installations. This precise accounting ensures that every carbon reduction claim is accurate, verifiable, and impactful.

"Electrification is crucial, but it must be smart electrification," says Jane Melia, co-founder of Harvest. "Our collaboration with WattCarbon allows organizations to directly support high-impact decarbonization projects, ensuring their investments yield real, measurable emissions reductions."

WattCarbon CEO McGee Young emphasizes the value of this innovative model: “Traditional methods of purchasing clean energy credits often fail to achieve real-world impact. Harvest’s technology, paired with our transparent tracking and upfront investments from committed companies, provides a new, effective way to invest in genuine decarbonization.”

A New Era of Climate Action

Harvest and WattCarbon’s partnership illustrates a powerful shift toward smarter, more accountable decarbonization strategies. By aligning cutting-edge thermal storage technology with precise carbon accounting and forward-looking investment models, we’re unlocking a scalable solution that makes buildings cleaner, electricity smarter, and our climate future brighter.

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Sustainability officers face the complex task of reducing carbon emissions across multiple buildings while proving the impact of their initiatives. Aristotle is a cloud-based analytics platform designed to meet this challenge. By combining Automated Measurement & Verification (M&V) with Hourly Carbon Accounting, it empowers you to make informed decisions backed by real data.

Automated Measurement & Verification (M&V)

Leverage advanced analytics to automatically validate and track the energy savings and emissions reductions from your sustainability projects. The dashboard’s automated M&V capabilities continuously analyze high-frequency building data to provide near real-time savings estimates. This modern “M&V 2.0” approach delivers results more quickly and accurately, and at potentially lower cost, than traditional manual methods.

Key benefits of Automated M&V:

• Continuous Performance Tracking: Instantly see the impact of efficiency upgrades or operational changes. No more waiting for annual evaluations – get verification of energy and carbon savings as they accrue in real time.

• Increased Confidence in Savings: Automated, meter-based verification increases trust in reported results, giving you and your stakeholders confidence that sustainability investments are paying off. Validate the ROI of projects with credible data.

• Reduced Effort and Cost: By automating complex analysis, you save time and reduce the need for external consultants or manual calculations. Focus your team on strategy rather than number-crunching, and achieve verification at a fraction of the usual cost.

Hourly Carbon Accounting

Achieve a new level of precision in emissions tracking with granular, hour-by-hour carbon accounting. Aristotle calculates your portfolio’s carbon footprint in real time, reflecting the actual carbon intensity of the electricity and fuels your buildings use each hour. This goes far beyond traditional annual or monthly averages, revealing when emissions are highest and helping you optimize accordingly.

Why Hourly Carbon Accounting matters:

• Granular Insights: Identify daily and hourly peaks in carbon emissions and uncover patterns (e.g. higher emissions during peak grid periods) that annual accounting would miss. These insights guide smarter scheduling of energy use and load shifting to cut emissions when it counts.

• Transparent & Defensible Data: Get a transparent, verifiable, and defensible record of your carbon impact that holds up to scrutiny. As investors, regulators, and boards increasingly expect rigorous proof of decarbonization progress, hourly data provides the credible detail you need.

• Maximize Renewable Usage: Measure how effectively you leverage renewable energy and storage, hour by hour. Track how solar generation or battery discharge aligns with consumption to ensure you’re using green energy when it’s available – and reducing reliance during carbon-intensive peak times.

Portfolio-Wide Analytics & Reporting

Our dashboard consolidates data from all your buildings into one intuitive interface. Sophisticated analytics turn raw information into actionable insights, enabling you to drive decisions with confidence:

• Portfolio Benchmarking: Compare performance across buildings to pinpoint leaders and laggards. Identify which facilities offer the biggest opportunities for improvement in energy efficiency or carbon reduction at a glance.

• Custom Dashboards & Reports: Dive into interactive charts or export polished reports to share with executives and stakeholders. Tailor the metrics and visuals to align with your ESG goals and reporting frameworks (e.g. GRESB, CDP), ensuring data is presentation-ready.

• Real-Time Alerts: Stay informed with alerts for anomalies or target thresholds – such as sudden spikes in energy use or when a building exceeds its carbon budget for the day. Proactive notifications let you address issues immediately and maintain control over your performance.

• Seamless Data Integration: The platform automatically pulls data from utility meters, building management systems, and IoT sensors across your portfolio. This unified data stream means your carbon and energy metrics are always up-to-date without manual data entry or spreadsheets.

Proven Impact and Reliability

Built on industry-leading methodologies, Aristotle is grounded in proven science and technology:

• Standards-Based M&V: Uses established IPMVP-compliant techniques and the latest advances from M&V 2.0 research to ensure accuracy and reliability in savings calculations.

• Secure Cloud Platform: Access your dashboard anywhere with confidence. Our platform employs enterprise-grade security and undergoes regular audits, so your data remains protected and private.

• Scalable Solution: Whether you manage 5 buildings or 500, the dashboard scales with you. High-performance processing ensures smooth analytics even as data volume grows, so you’ll never miss a beat as your sustainability program expands.

Get Started – Free Trial & Demo

Ready to transform your sustainability strategy with smarter data? Try the dashboard free for one month and see how automated insights can accelerate your decarbonization efforts. Launch your trial in minutes and start uncovering opportunities from day one.

Prefer a guided tour? Book a personalized demo with our team. We’ll walk you through key features and use cases relevant to your portfolio, so you can see exactly how this dashboard fits your organization’s needs.

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For you, the readers of our blog, we’re providing a deep dive into our thinking ahead of the release. Below is a white paper that outlines what we have built, how it works, and what use cases it unlocks.

On a personal level, the most exciting part of this product is the fact that we’ve eliminated/automated all of the work that goes into making an energy/carbon savings calculation so that not only can you know - within a few minutes - how much your projects are saving (making ROI calculations effortless), but also come back the next day for automatically updated information.

Here’s the plan: sometime Monday night or Tuesday morning, we’ll flip the switch on the site to unlock the new functionality. If you already have an account, you’ll be able to login using your existing credentials. If not, you’ll just create one and be on your way. You’ll have to be a customer of UtilityAPI, Arcadia, or Bayou Energy for it to work (that’s where we pull data from), though we also have the ability to calculate modeled electrification savings without requiring source data. Moving forward, we’ll be adding integrations with other data providers (hit us up if you have a request). Of course, we expect lots of edge cases. There will be a way to leave feedback in the app if something isn’t working or doesn’t look right.

For now, please take a read through the white paper below. We’d love to hear your feedback on our thinking. I’m going to try to figure out how to do a Substack Live on Tuesday to show and tell some of the cooler functionality (tentatively penciled in for 11am PT). Stop by and say hi to us! Of course the WattCarbon team deserves all the credit here. They’ve been working their tails off getting this across the finish line and deserve special recognition for what they’ve built. Thanks also to all of you for your support and enthusiasm. It’s a dark time right now, but brightness will come from the candles we light for each other to illuminate the path forward.

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Introducing Aristotle

Measurement and Verification (M&V) is the cornerstone of proving that energy efficiency and sustainability projects deliver real savings. Traditional M&V methods—while grounded in decades of engineering practice—have often been manual, slow, and costly, providing only after-the-fact validation of energy savings. WattCarbon’s new Aristotle platform introduces a paradigm shift: it is the world’s first fully automated, AI-driven M&V platform that continuously verifies energy performance and hourly carbon impacts in real time.

By leveraging machine learning and advanced energy modeling technology, Aristotle delivers on the long-promised industry vision of “M&V 2.0” – continuous, real-time verification of energy savings and emissions reductions across building portfolios. This white paper details the technical innovations behind Aristotle, including its architecture, data inputs, methodologies, and the outputs it delivers, as well as how it builds upon (and goes beyond) industry-standard frameworks like IPMVP, ASHRAE Guideline 14, the Uniform Methods Project, CalTRACK, and emerging standards for carbon accounting.

Industry Standard Frameworks for M&V and Emissions Accounting

Over the past several decades, the energy industry has developed well-defined protocols to measure and verify energy savings from projects. Aristotle’s design is informed by these established frameworks, even as it extends them with automation and AI. Key standards and initiatives include:

• IPMVP (International Performance Measurement & Verification Protocol): A widely adopted framework published by the Efficiency Valuation Organization (EVO) that defines standard options (A, B, C, D) for planning and implementing M&V. IPMVP provides a conceptual framework for measuring savings by comparing post-project energy use to an agreed-upon baseline (what usage would have been without the project). It is broadly applicable and acts as the foundation for many M&V projects worldwide.

• ASHRAE Guideline 14: A technical guideline from ASHRAE (“Measurement of Energy, Demand, and Water Savings”) that provides detailed procedures and calculation methods to reliably quantify savings. Guideline 14 outlines three fundamental M&V approaches (Retrofit Isolation, Whole Facility, and Calibrated Simulation) corresponding closely to IPMVP Options B, C, and D. It also specifies statistical validity criteria (such as bias and uncertainty thresholds) to ensure models accurately represent the baseline, complementing IPMVP’s high-level framework.

• DOE Uniform Methods Project (UMP): A U.S. Department of Energy initiative providing a library of model M&V protocols for specific energy efficiency measures. UMP guides offer step-by-step methods (e.g. for lighting retrofits, HVAC upgrades, etc.) to consistently determine savings, serving as a practical supplement to IPMVP for evaluators and program administrators.

• CalTRACK: An open-source methodology for meter-based energy savings analysis. CalTRACK standardizes how to calculate normalized energy consumption and savings at the building meter level, often using high-frequency data (daily or hourly). For example, the CalTRACK hourly modeling approach characterizes a building’s energy use as a function of temperature, occupancy, and time-of-week, enabling consistent hourly baseline predictions for M&V. These methods have been implemented in software (like the OpenEEmeter) to support “M&V 2.0” programs where large volumes of interval meter data are analyzed automatically.

• Emissions Accounting Standards: Traditional M&V frameworks focus on energy (kWh or fuel units) and demand (kW) savings; translating those savings into carbon emissions reductions is a newer frontier. Many organizations rely on general guidance like the GHG Protocol for inventorying emissions, but GHGP does not provide methods for project-level avoided emissions. The industry is now developing standards to fill this gap. For instance, WattCarbon is a founding member of the OpenEAC Alliance, a coalition of M&V experts dedicated to transparent methods for calculating carbon savings from distributed energy resources. OpenEAC builds on frameworks like IPMVP and UMP, but extends them to include hourly carbon impacts, reviewing and approving methodologies so that emissions reductions claims are credible and consistent. Each approved methodology in OpenEAC (for example, methods for Whole-Building Weather-Normalized Savings, Heat Pump Electrification savings, or Demand Response events) is versioned and published openly to ensure community trust. WattCarbon’s platform uses these methodologies as the basis for its calculations, ensuring Aristotle’s automated results are aligned with industry best practices (and can be audited against those standards).

By referencing and integrating these frameworks, Aristotle’s automated M&V engine doesn’t reinvent the wheel, it builds upon proven techniques for baseline modeling and savings verification. However, it also advances beyond traditional practice by automating the process end-to-end and incorporating granular, real-time carbon accounting that legacy protocols did not address.

Limitations of Traditional M&V Approaches

Conventional M&V, while reliable, comes with well-known challenges that have limited its scalability and responsiveness:

• Manual, Labor-Intensive Process: Traditionally, energy savings verification requires energy engineers to design M&V plans, collect and clean data (often utility bills or logger data), and perform one-time statistical analyses or simulations. Different engineers might choose slightly different methods or assumptions for the same project, leading to inconsistency (the “100 engineers, 100 methods” problem). The need for expert judgment means higher costs and longer timelines. In practice, M&V can add 5–10% to the total project cost, an expense that can discourage evaluation of smaller projects. The process can take months or even years of post-retrofit data to produce a final savings report, by which time the data is outdated.

• Slow Feedback and Limited Frequency: Because of the effort involved, traditional M&V analyses are typically performed infrequently, perhaps a single ex-post analysis after one year of operations, or periodic annual evaluations. This delay means building owners and sustainability managers wait a long time for feedback on whether an efficiency project is performing as expected. If savings are off track, the opportunity to correct course in real time is lost. Moreover, many conventional M&V analyses rely on monthly utility bill data, which obscures short-term performance issues. Important variations in performance (like a HVAC system efficiency dropping during certain hours or a controls issue on weekends) might be averaged out in monthly data. Granular insights, for example, identifying what hours of the day most savings occur, are not available with coarse data.

• Static Baselines and Simplified Carbon Estimates: Standard M&V computes a baseline that represents what would have happened without the project, often only adjusting for weather and other factors in a static fashion using “typical” weather values. However, real buildings and grids are dynamic. Traditional methods have not typically incorporated continuously updated models or high-frequency adjustments to real-world conditions. Carbon accounting has been especially simplified. Common practice might use a single annual average emission factor (e.g. kg CO₂ per kWh) to convert energy savings to emissions avoided. This ignores the fact that grid carbon intensity can vary dramatically hour by hour. As a result, traditional reports of “X tons of CO₂ saved per year” lack insight into when those carbon reductions happened (e.g. were savings occurring when the grid was mostly renewable or mostly fossil-fueled?).

• High Costs and Limited Scalability: Ensuring credibility in results often meant hiring third-party M&V consultants or implementers to perform independent analysis. While this third-party review adds rigor, it drives up cost and time, and still may not catch all uncertainties. For enterprise portfolios with hundreds of buildings or distributed energy resources, doing custom M&V on each asset is impractical at scale. The high cost and effort have been a structural barrier to valuing the climate benefits of many smaller distributed energy projects. Many valid energy savings projects go unverified because traditional M&V doesn’t scale easily without significant budgetary impacts.

These limitations set the stage for an “M&V 2.0” evolution: the application of software, smart meter data, and AI to automate and accelerate the M&V process. Advanced M&V (or “M&V 2.0”) aims to maintain the accuracy and rigor of classical methods while providing faster, more granular, and cheaper analysis through analytics. WattCarbon’s Aristotle platform is an embodiment of this evolution, addressing the above challenges by design.

Aristotle Platform Architecture and Data Inputs

Aristotle is a cloud-based, fully automated M&V platform that continuously ingests data, models expected versus actual performance, and generates verified energy and carbon savings. Its architecture is designed to seamlessly connect to a variety of data sources and to operate across entire portfolios of buildings and distributed energy resources. Figure 1 below illustrates the high-level system architecture and data flow for the platform.

Figure 1: Aristotle Automated M&V Platform Architecture. The platform integrates diverse data streams, including utility meter data, building IoT/BMS sensors, weather feeds, and operational context, into an AI-driven engine. This engine creates a reference model for each asset, as well as energy savings calculations and hourly carbon accounting. The outputs (via dashboard or API) include real-time energy & carbon savings reports, minted Energy/Environmental Attribute Certificates (EACs), alerts, and other insights for stakeholders.

Aristotle’s data pipeline begins with automated data acquisition from relevant sources: building energy meters, sensors, and contextual datasets. The platform can ingest interval data (e.g. 15-minute or hourly electricity consumption) from utility smart meters or sub-meters, either through direct utility integrations or data aggregators (existing customer accounts with providers like Arcadia, UtilityAPI, etc., can be linked to import historical and ongoing usage data). Additionally, it can collect data from building management systems (BMS) and Internet of Things (IoT) sensors for more granular operational metrics. These may include HVAC runtime data, temperatures, occupancy counts or schedules, basically any inputs that help explain energy usage patterns. Weather data (from local weather stations) is continuously pulled in, as outdoor temperature and other conditions are critical drivers for building energy models. The platform also incorporates static contextual information (building square footage, operating hours, equipment inventory) and project details (for example, the date an efficiency retrofit was implemented, or the capacity of a battery system). All these inputs feed into the core AI engine.

At the heart of Aristotle is the AI-driven energy modeling engine that creates a “reference model” of each tracked asset or building. The reference model is essentially a computational model that represents the asset’s ideal behavior (energy consumption or generation) under varying conditions, calibrated to real-world data. For a building, this could be capturing whole-facility energy use patterns; for a specific device like a heat pump or battery, the reference might isolate its performance (and interactions with the building or grid). Aristotle’s engine employs machine learning algorithms to automatically develop counterfactual models from historical data, for instance, using regression to relate a building’s energy use to weather and occupancy. The approach draws on techniques from CalTRACK and other open M&V methods (e.g., generating features for time-of-week and temperature dependency, and training models on pre-intervention data. What’s novel is that the platform performs this model fitting and calibration continuously and autonomously. As new data flows in, the reference model self-adjusts to maintain accuracy, a process akin to continuous commissioning.

In essence, the system is always answering the question: “What would energy consumption or savings be right now if the efficiency measures or DERs were performing as expected?” It uses that answer to deliver ROI feedback in real-time by running the calibrated reference alongside actual measured performance. The use of AI allows Aristotle to handle complex patterns and large datasets that would overwhelm manual analysis, and to update models far more frequently than a human could. Importantly, even as it uses modern tools, the modeling approach remains grounded in physics and industry-accepted practice (for example, ensuring that models meet the goodness-of-fit criteria of ASHRAE Guideline 14 and that any simulation-based methods follow the calibration guidelines). The platform can support classic M&V modes: it can function like IPMVP Option C (whole-building analysis using meter data and weather) or Option D (calibrated simulation), or a hybrid of both, depending on the data available for a given asset.

A core component of the platform’s innovation is its Hourly Carbon Accounting capability, integrated into the M&V calculations. WattCarbon maintains a library of emission factors and hourly grid carbon intensity data for electric grids in different regions. Aristotle links each hour of energy consumption or savings to the corresponding grid emissions factor for that location and time. This means when the platform calculates, say, 100 kWh of electricity savings in a given hour, it will also compute how many kilograms of CO₂ that saved, based on that hour’s actual grid mix. In regions with cleaner grids in certain hours (e.g. high renewable penetration overnight) and dirtier grids in others (peak hours when gas plants are running), this granular approach reveals exactly when carbon reductions occur. It provides a contrast to traditional carbon accounting that might use annual average emissions rates. Aristotle can show, for example, that an efficiency measure reduced load predominantly at 5pm on hot summer afternoons when the grid was carbon-intensive, yielding a higher carbon benefit than the same kWh savings would at 10am. The platform’s internal data model time-aligns all energy data with carbon intensity and even marginal emissions factors where available, enabling marginal carbon abatement calculations for demand response or load shifting interventions. This level of detail (hourly watt-hour and gram-of-CO₂ values) is recorded as an EAC and forms the basis of the platform’s outputs.

Methodologies and AI Applied in Automated M&V

While the data ingestion and modeling architecture is designed to manage significant data complexity, Aristotle’s analytic methodology remains transparent and grounded in established M&V techniques. Each project or asset onboarded to the platform is associated with an M&V methodology plan, essentially a digital specification of how savings will be computed. WattCarbon’s approach uses the OpenEAC Alliance’s library of methodologies as these plans. For example, if a user is tracking an energy efficiency retrofit in a commercial building, the platform might automatically apply a whole-building weather-normalized metered savings method (similar to IPMVP Option C) to that project. If another project is the installation of a heat pump replacing a gas furnace (an electrification project), the platform can apply an electrification-specific methodology that accounts for fuel switching, modeling the avoided gas usage and the new electrical usage to calculate net energy and emissions savings. These methodology definitions formalize the “counterfactual” baseline calculation for each project type in a way that is consistent and auditable.

Under the hood, Aristotle’s AI engine uses a combination of machine learning, statistical analysis, and simulation to implement the chosen methodology. In many cases, a baseline model is constructed from pre-intervention data (for retrofits) or from reference models (for new construction or equipment additions where pre-data may not exist, a calibrated simulation might be used initially). The platform might deploy advanced regression models, time-series forecasting (to handle occupancy or production schedule variations), or even ensemble techniques that switch models based on regimes (weekday vs weekend, seasonal changes, etc.). The “reference model” concept implies that for more complex systems, a hybrid approach can be taken: part data-driven (learning from data) and part physics-informed (using known equipment performance characteristics). This is particularly useful in scenarios like battery storage or PV solar: the platform knows the physics (e.g. a battery’s charge/discharge efficiency, or solar panel output equations) and uses data to issue alerts for unexpected usage patterns. The AI can detect when the real system is deviating from expected performance. This continuous feedback loop is a divergence from traditional practice, which typically develops models once at the start and assumes they remain static; Aristotle instead treats feedback as an ongoing process, improving the reliability of long-term savings tracking.

Crucially, every calculation Aristotle performs is traceable and defensible. Each hour of savings is backed by the input data (meter readings, weather, etc.) and a documented methodology. WattCarbon’s platform automatically generates transparent M&V reports detailing each step in the measurement process. These reports show the baseline model employed, the adjustments made (e.g. weather normalization, or occupancy normalization), and the resulting savings for each interval. The use of standardized open methods means stakeholders or third-party auditors can review the methodology documentation (which is version-controlled and published via the WEATS Registry) and even replicate the calculation if needed. In other words, Aristotle’s AI is not a “black box”. It is better described as an “automated calculator” implementing industry-approved formulas, but doing so on a volume of data and with a speed that manual calculation cannot match. The platform includes an audit trail such that any EAC (Energy/Environmental Attribute Certificate) it issues for a project can be traced back to the raw data and method used. Each savings record is effectively like a ledger entry with a unique ID, preventing double counting and ensuring accountability.

Outputs and Stakeholder Deliverables

One of the primary goals of Aristotle is to translate raw data and sophisticated analysis into clear, actionable outputs for stakeholders like building owners, energy managers, sustainability directors, and investors. The platform delivers several types of outputs:

• Real-Time Dashboards and Alerts: Users have access to a cloud dashboard that provides a portfolio-wide view of all their projects and assets. Interactive charts show energy consumption vs. baseline in real time, with savings updating continuously. Projects can be compared and benchmarked to identify which buildings are yielding the greatest improvements and which ones lag behind, focusing attention where it’s needed. The platform issues alerts for anomalies or threshold violations. For example, a user will want to know if a building’s energy use suddenly spikes above the modeled baseline (possibly indicating equipment malfunctions or drift in performance), or if a demand response event did not achieve the expected load drop. By catching these issues immediately, stakeholders can respond proactively (tuning operations, scheduling maintenance, etc.), rather than finding out at the end of the year that savings were lower than expected.

• Automated M&V Reports: Aristotle generates detailed M&V reports for any selected EAC output. These reports document the baseline model accuracy statistics, the total savings (energy and carbon) achieved, and breakdowns by time or by source. They effectively automate what an engineering consultant would traditionally produce as an M&V report, but with far greater speed and consistency. Each report is audit-ready insofar as all assumptions are explicit and the underlying data is referenced. This gives confidence to both internal stakeholders and external verifiers. A sustainability director can use these reports to back up their claims of energy savings in ESG disclosures or to support incentive payments from utility programs. Because the data is updated continuously, getting an M&V report no longer requires waiting until the project’s end. One can pull a report even a few weeks after project implementation to see early results, or continuously monitor savings on the dashboard.

• Certified Energy/Carbon Savings: A unique feature of WattCarbon’s platform is the creation of Energy/Environmental Attribute Certificates (EACs) which quantify verified energy and carbon reductions. As Aristotle calculates the hourly savings for a project, these savings are packaged into certificates, each with a unique serial number and metadata describing the project, time, and methodology. For example, a building retrofit project might generate certificates for 500 kWh saved and 200 kg CO₂ avoided during a particular month, based on the hourly data aggregated. These certificates serve as a system of record for each asset. They are registered in WattCarbon’s WEATS registry and potentially transacted (for organizations that earn revenue from carbon credits or energy saving performance contracts). By tokenizing energy savings and carbon reductions in this way, with full traceability, Aristotle provides a mechanism to monetize or trade the “negawatts” and avoided emissions, turning them into fungible assets. Investors or programs that fund efficiency can be issued these digital certificates as proof of the outcomes, fostering trust that their capital indeed delivered quantifiable carbon impact.

• APIs and Integration: For organizations that have their own analytics platforms or sustainability reporting systems, Aristotle offers API access to the data. All calculated metrics (hourly consumption vs. baseline, emissions, etc.) and certificates can be exported programmatically. This means a company can integrate the real-time M&V results into their enterprise dashboards or even trigger automated actions (for instance, adjust operations if an asset isn’t meeting its savings targets). The platform’s open-data approach ensures that the information is not siloed. Furthermore, Aristotle’s outputs are designed to meet emerging regulatory and disclosure requirements. For example, with the move toward more rigorous climate reporting, having hourly, asset-level carbon data provides corporations a stronger evidentiary basis for their reported emissions and reductions. Stakeholders from sustainability teams to financial auditors benefit from the transparent, defensible data that Aristotle delivers.

Use Cases Across the Energy Transition

Because Aristotle’s automated M&V system is flexible and data-driven, it can support a wide range of decarbonization use cases. Below we highlight how the platform applies to various project types, from classic energy efficiency to cutting-edge grid-interactive assets.

Energy Efficiency Retrofits

For traditional energy efficiency measures (lighting upgrades, HVAC improvements, building envelope enhancements, etc.), Aristotle automates the entire M&V cycle. Typically, these projects align with an IPMVP Option C whole-building approach or Option B retrofit isolation if submetering is available for the affected systems. The platform will ingest the building’s meter data (and any relevant submeter or sensor data), establish a baseline using pre-retrofit performance (adjusting for weather, occupancy, production levels, etc.), and then continuously measure the drop in energy use once the retrofit is in place. For example, imagine an office building that upgraded all lighting to high-efficiency LEDs. First, Aristotle’s reference model for the building will predict the reduction in energy consumption as part of the whole-building load profile. Once the LEDs are installed, the M&V engine will detect that for the same occupancy and hours of operation, evening electricity use is, say, 30% lower than would have occurred with old lights. The reference model will serve as a point of comparison to evaluate the impact of the retrofit relative to expectations.

The result is a continuous verification of savings: building owners can see in near real-time how much energy (and money) the LEDs are saving, rather than waiting for a year-end verification. If the savings are trending below expected (perhaps some fixtures weren’t replaced or are miscontrolled), the system flags it early. In terms of carbon accounting, those reduced kWh each hour are converted to avoided CO₂ with the appropriate hourly emissions factors from the grid. This could show, for instance, that an efficiency retrofit in a grid region with coal-heavy peak power yields significantly more carbon reduction per kWh saved during peak hours than during off-peak. Aristotle’s hourly analysis would capture that and report both total kWh and kg CO₂ saved. All of this is accomplished following standard principles (as outlined in IPMVP and ASHRAE guidelines) but executed with higher frequency tracking at lower cost. The outcome is a defensible record of energy savings for use in utility incentive claims or corporate sustainability metrics, without the need to hire external M&V consultants.

Building Electrification (Fuel Switching)

Building electrification, such as replacing a gas-fired boiler with an electric heat pump, or a gas water heater with a heat pump water heater (HPWH), is a key strategy for decarbonization. However, electrification presents a unique M&V challenge: increased electrical usage (which the meter sees) coupled with reduced on-site fuel combustion (often not directly metered by the electric utility). Aristotle addresses this by employing a hybrid reference model that integrates both the previous and new systems. When an electrification project is registered, the platform sets up a baseline representing the thermal energy that was previously provided by fossil fuel. This could involve using metered gas consumption data, device-level simulations, or manufacturer performance data for the old equipment to estimate how much gas would have been used hour by hour, based on the building’s heating demand and weather conditions.

Meanwhile, Aristotle also models the building’s expected electric consumption under those same conditions. Once the project is live, the platform measures the actual electricity consumed by the heat pump (via the meter data or submeter on the device) and compares it to the combined baseline (what the gas usage would have been plus any electric usage that was there before). This yields both the net energy change and the change in emissions. For example, a heat pump may use 3 kWh of electricity to deliver the same heating that 1 cubic meter of natural gas would have provided. The platform will show perhaps a slight increase in site energy use (if we only consider kWh), but it will also account for the avoided gas combustion. The emissions calculation will incorporate the gas CO₂ factor (which was avoided) and the electricity CO₂ (which is now incurred). If the electricity is much cleaner (as it often is, especially if paired with renewable energy), the net result is a significant CO₂ reduction.

Aristotle automates this complex accounting, using methodologies specifically approved for electrification projects. It effectively creates a virtual gas meter in the reference model to track avoided fuel use. This is invaluable for proving the impact of electrification: historically, if one just looked at the electric bill after such a project, they’d see higher kWh and might think energy performance worsened, unless a careful analysis is done. Aristotle provides that careful analysis continuously, demonstrating that although the form of energy changed, the overall carbon emissions and site energy content (BTUs) are improved. This helps justify electrification investments by showing the real climate ROI. Moreover, the platform’s hourly carbon view is critical here. It can show if an electrification project is resulting in increased load during peak grid times and help strategize around that (maybe by shifting some loads, adding smart controls or thermal storage to minimize high-carbon grid usage).

Battery Energy Storage Systems (BESS)

Batteries in buildings (or connected to them) are used to shift energy usage in time, charging during low-cost or low-carbon periods and discharging during high demand periods. Verifying the benefit of a battery can be complex because it doesn’t necessarily save energy (in fact there are some losses), but it can greatly reduce peak demand and ensure more consumption is met by cleaner sources. Aristotle handles battery projects by tracking two primary effects: peak demand reduction and load shifting for carbon optimization. For M&V, the baseline in a no-battery scenario is that the building’s demand profile would follow its natural pattern (perhaps a big peak at 5pm when HVAC and other loads coincide). With the battery, that peak is shaved.

The reference model uses telemetry data collected from the battery to create a record of charging and discharging, which allows it to create a profile of what the demand would have been without storage, and then measures the actual with storage. The difference at each time step is the impact of the battery. If a battery discharges 50 kW at the 5pm peak, the platform will record a 50 kW reduction in grid demand for that hour (and corresponding kWh shifted). Over time, these hourly differences can be integrated into total “energy savings” from the grid’s perspective (even if not a reduction in consumption, it is a reduction in peak supply needs). The Uniform Methods Project doesn’t have a standard battery protocol, but Aristotle leverages techniques from demand response M&V and even utility demand charge calculations to quantify this.

On the carbon side, the platform looks at when the battery charged versus when it discharged. If, for instance, the battery charges at 1am (when the grid CO₂ intensity was 200 g/kWh) and displaces power at 5pm (when grid intensity was 400 g/kWh), Aristotle calculates the net carbon benefit of that 1 kWh shifted is roughly 200 g (the difference) minus any efficiency losses. Summed over all hours, the platform can report how many kg of CO₂ the battery system is avoiding by time-shifting energy. It will also account for round-trip efficiency: if 10% extra energy was drawn to charge (losses), that is counted against the benefit. All of this is done automatically and in near real time. Stakeholders get a clear view each day of how the battery operated and what the measurable impact was, whether for demand charge management or carbon reduction. If the battery is not being utilized optimally (say it’s charging and discharging at suboptimal times), the system’s analytics can highlight that and suggest better scheduling to maximize benefits. In essence, Aristotle provides a continuous commissioning tool for batteries, ensuring they deliver on their intended goals and providing verified data for any claims of peak reduction or emission savings.

Electric Vehicle (EV) Charging

EV charging in commercial buildings (offices, fleets, multifamily housing) is another growing piece of the energy puzzle. From one perspective, EV charging increases building energy use, but it displaces gasoline or diesel consumption in vehicles, yielding a net climate benefit. Aristotle’s platform can integrate EV charging stations as part of a building’s reference model. Similar to electrification, the baseline for an EV project can be defined as “vehicle would have run on gasoline for X miles.” If the data is available, WattCarbon can incorporate the fuel use data (or use standardized factors, e.g. an EV charging 40 kWh replaces a gasoline car driving Y miles consuming Z gallons). The platform will thus compute avoided fuel emissions concurrently with the measured electricity used for charging.

Many building managers may focus simply on managing the additional electric load. Aristotle can provide insights on load management for EVs: e.g. verifying that smart charging systems are properly staggering loads to avoid spikes. If an EV charging management system claims it reduced peak draw by coordinating charging, Aristotle’s meter-based verification will show the counterfactual peak vs. actual. Hourly carbon accounting is particularly useful here too. EV charging can be scheduled when grid carbon is lowest (for example, late night when wind power is abundant). The platform can track how much of the EV charging energy was done during “green” hours vs “brown” hours and quantify the difference in emissions. This is valuable for companies trying to achieve 24/7 carbon-free energy goals. They can not only buy renewables, but also ensure EVs charge at optimal times and prove it.

Additionally, if EV chargers are bidirectional (vehicle-to-grid), their behavior can be treated similar to batteries in the M&V system. Aristotle, through its flexible data model, essentially can treat an EV charger plus EV as a dynamic asset with both consumption and possible discharge. It will consistently apply the baseline of “what if this EV wasn’t here or wasn’t managed” vs. actual, to isolate the impact. For investors in fleet electrification, the platform provides a verification of fuel cost savings and carbon reduction per vehicle in the fleet, aggregated in one place, rather than having to manually combine vehicle telematics with utility bills.

Demand Response and Load Flexibility

Demand response (DR) programs pay customers to reduce load during peak events or grid stress events. M&V for DR typically involves computing a baseline of what the load would have been during the event (using methods like the 10-of-10 baseline or regression models) and then measuring the actual load drop. Aristotle automates DR event M&V by leveraging its continuously learned models. Since the platform is already modeling the facility’s behavior, when a DR event happens (say on a particular afternoon for 2 hours), it can immediately compute the counterfactual baseline for that period using its reference. This can be more accurate than simplistic baseline methods, because it can account for operational changes, weather, day-of adjustments, etc., in a sophisticated way (similar to CalTRACK or other advanced DR baseline methods). The result is an immediate calculation of kilowatts curtailed during the event. This is delivered right after the event, rather than weeks later, enabling program participants to know if they met their targets.

On the emissions side, demand response is increasingly viewed as an emissions reduction strategy (e.g. avoiding the need to run peaker plants). Aristotle will quantify the avoided energy (kWh) and associated emissions for each event hour. If the grid was particularly dirty at that time, the DR event’s carbon benefit is calculated and can be aggregated into the project’s overall impact. This real-time verification is extremely useful for emerging carbon markets that might reward load flexibility that reduces emissions. Instead of relying on blunt estimates, the platform provides a defensible, fine-grained accounting of each demand response action. For instance, a commercial building that participates in 10 DR events a year can have an annual report (or even a certificate per event) saying exactly how much energy and CO₂ was avoided per event. This builds trust with grid operators and can support pay-for-performance models. From the user’s perspective, having a single system track both their efficiency improvements and their demand response performance is a bonus. It’s all part of the holistic view of how their building interacts with the energy system, whether reducing overall consumption or strategically timing it.

Traditional vs. Automated M&V: Key Differences

Automating M&V with an AI platform like Aristotle yields significant advantages over the traditional approach. The table below summarizes the differences in cost, speed, granularity, and defensibility of results:

• Data Granularity & Frequency: Traditional M&V often relies on monthly utility bills or a few spot measurements, providing coarse insights. In contrast, Aristotle uses high-frequency interval data (hourly or sub-hourly), enabling analysis of load shapes and savings at each time step. This means granular visibility into when and how savings occur, uncovering patterns (e.g. nighttime setbacks, weekend operations) that monthly data would mask. The result is a richer understanding of project performance.

• Speed of Results: Manual M&V might take weeks or months after data collection to produce a verified savings report. Often one only truly knows the savings long after project implementation. Aristotle’s automated engine delivers near real-time results. As soon as data is available, the platform updates the savings calculations. This continuous verification accelerates feedback; stakeholders can validate ROI immediately and make any necessary adjustments in operations while the project is ongoing, not afterward. Essentially, it turns M&V from a one-time audit into a continuous commissioning tool.

• Cost Efficiency: Conventional M&V requires significant labor by skilled analysts or engineers. As noted, industry guidelines suggest M&V can cost 5–10% of project expenditures. Automated M&V drastically lowers the per-project cost by leveraging the same software platform across many projects. Once Aristotle’s data integration is set up, adding another building or measure has minimal marginal cost. This makes robust M&V feasible even for smaller projects that previously couldn’t justify the expense. Overall program administrators or ESCOs (Energy Service Companies) can scale up M&V across a portfolio without a linear increase in effort. Additionally, the avoidance of third-party verification contracts for every project can translate to large savings, as human experts can instead be focused on oversight of the automated system and handling exceptions, rather than doing every analysis from scratch.

• Defensibility & Transparency: Traditional methods rely on the competency of individuals and often proprietary spreadsheets or models. It can be hard for outsiders to fully verify the calculations without redoing the work. Aristotle improves defensibility by using standardized, peer-reviewed methodologies (via OpenEAC) and automatically generating a detailed audit trail for each result. Every assumption (weather adjustments, baseline selection) is explicit, and the raw data is linked. This level of transparency is seldom achievable in manual M&V reports due to time constraints. Furthermore, because the methods are consistent, there’s less room for unintentional bias or overly optimistic savings estimates; the same rules are applied uniformly. From a stakeholder perspective (be it a financial investor, an auditor, or a sustainability officer), the numbers coming out of Aristotle carry weight because they are backed by both solid data science and industry-approved calculation methods. In short, results are more reproducible and thus more credible.

• Scope of Metrics: Traditional M&V primarily gives you energy unit savings (kWh, therms) and maybe peak kW reduction. Any conversion to carbon or financial metrics is done as a separate, simple multiplication step. Aristotle provides a much broader set of integrated metrics, as every report includes not just energy savings but also emissions reductions (Scope 2 carbon), and even avoided Scope 1 emissions for fuel-switching cases, computed with granularity and accuracy. It can also translate savings into dollars using tariff data if needed, giving a full picture of project value. Essentially it bridges the gap between energy management and carbon accounting automatically, whereas traditionally one would have to marry energy data with emissions data offline.

• Scalability & Portfolio Insights: Perhaps one of the biggest differences is in multi-site management. If you have 100 buildings with efficiency projects, the manual M&V approach would treat each building as a separate effort, and then someone might roll up the results in a spreadsheet. With an automated platform, all buildings can be onboarded and analyzed in parallel, and the portfolio results are available at a click. This not only saves effort but unlocks new analysis. You can rank buildings by realized savings vs. predictions, you can cluster buildings by performance profiles, and you can manage a program in a data-driven manner. The speed and automation allow for program-level M&V analytics that traditionally might only be done in a retrospective evaluation study. It’s the difference between having a near-real-time energy management system versus sporadic M&V snapshots.

To visualize one aspect of these differences, consider the granularity of data. Figure 2 shows an example of how an automated M&V model captures hourly changes in a building’s energy use versus a baseline, whereas a traditional approach might only report the total monthly savings. The shaded green areas indicate the energy saved in each hour, information that Aristotle makes available continuously to drive operational decisions.

Figure 2: Example Baseline vs. Actual Consumption Over Time. In this conceptual illustration, a building’s baseline (blue line) represents expected power draw without an efficiency measure, while the actual consumption (orange line) is lower during certain hours due to the measure (for instance, a demand response event or an efficiency improvement). The green shaded areas highlight the hourly energy savings. An automated M&V platform captures these dynamics hour-by-hour, showing not just how much energy was saved, but when it was saved. Traditional M&V would typically report only the aggregated savings over a period, losing the temporal detail that can inform operational strategy (such as targeting future savings during the highest load hours or highest carbon intensity hours).

Conclusion and Future Outlook

Aristotle represents a significant step forward in how energy and carbon performance is measured in the built environment. By fusing AI-driven modeling with the rigor of established M&V protocols, it delivers an M&V solution that is faster, more granular, and more scalable without sacrificing accuracy or credibility. In fact, Aristotle arguably increases the credibility of results by eliminating manual errors and by providing transparent, tamper-proof records of every calculation. The platform effectively operationalizes the vision of continuous M&V that industry experts have anticipated as smart meter data became widespread. It also pioneers the integration of hourly carbon accounting, creating a new standard for what it means to truly track decarbonization progress (aligning well with emerging demands for 24/7 carbon tracking and verified Scope 2 emissions reporting).

From an engineering perspective, Aristotle can be seen as an “expert M&V engineer” living in the cloud, one that processes gigabytes of data with ease, and always adheres to the agreed methodology. From an investor or sustainability executive perspective, it provides a level of assurance and insight that de-risks projects: one can invest in an energy efficiency or DER project and immediately verify its performance and carbon impact, increasing confidence in the payback and climate benefits. This real-time ROI validation loop can help unlock more capital for such projects, as stakeholders gain trust that savings will be delivered and proven. It also helps organizations optimize operations in flight, effectively squeezing more savings out of projects through continuous improvement (something not possible when you only check M&V results long after the fact).

It’s important to note that automated M&V doesn’t eliminate the need for human expertise, rather, it elevates the role of experts to focus on designing projects and interpreting insights instead of crunching numbers. Engineers can use platforms like Aristotle to quickly test scenarios (what-if analyses via the reference model), validate strategies like load shifting, and ensure persistence of savings over time. The reference model approach means the model of the building or asset is always up-to-date; if building usage patterns change or new equipment is added, the AI model adapts, providing a living simulation of the building. This opens the door to future capabilities where the same model used for M&V could be leveraged for predictive control or optimization (closing the loop from measurement to action).

WattCarbon’s Aristotle is launching at a time when the intersection of energy efficiency and carbon accountability is especially critical. Policies and markets are increasingly requiring proof of carbon reductions, whether through local building performance standards, carbon trading mechanisms, or corporate ESG commitments. By automating the adherence to standards like IPMVP and extending them into carbon metrics, Aristotle provides the “rigorous proof of impact” that stakeholders demand. It brings consistency and trust to a landscape that used to be fragmented by varying methods and assumptions. As more projects are tracked through the platform and more methodologies are developed by the OpenEAC community, we can expect a virtuous cycle: better data and verification will lead to better project performance, which in turn will encourage more investment in decarbonization projects.

Aristotle demonstrates how the latest in AI and cloud technology can turbo-charge a classic engineering discipline. It honors the industry’s hard-won M&V best practices (ASHRAE, IPMVP, UMP, etc.) by encoding them in software, and then goes beyond by delivering insights at the speed of digital. The result is an M&V platform for the modern energy era, one that not only measures what has been achieved but also actively guides the next steps on the path to net-zero. With tools like this, building operators and investors are empowered to accelerate decarbonization with confidence, armed with continuous, credible data on every watt-hour saved and every gram of carbon avoided.1

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We’ve also been experimenting with feature prototyping using a variety of different tools, but our favorite right now is Vercel’s v0.dev tool. To see what this looks like in real life, here’s an example of how we’re envisioning the tracking of a microgrid with onsite solar, storage, EV charging, etc.

https://v0-dashboard-wireframe-five.vercel.app/

I’m curious to hear what folks think about this type of AI output. I tend to struggle to write “white paper” style material, and when I read the white paper below it feels a little generic, but I think that’s actually a good thing. On the other hand, the ability to create and share prototypes definitely feels like an unlock, even if the AI tends to get a little too creative at times, which makes it hard to know which parts are intended vs unintended. We’d love your comments, thoughts, or feedback. - McGee

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Introduction

In today’s world, the pressure to reduce carbon emissions is growing rapidly. Whether for businesses, governments, or educational institutions, accurate, timely, and transparent data on energy use is essential to achieve sustainability goals. WattCarbon’s innovative approach—built on the concepts of WEATS and Energy Attribute Certificates (EACs)—represents a significant leap forward in how we track, verify, and report emissions reductions.

Understanding WEATS

WEATS (WattCarbon’s Energy Attribute Tracking System) is a digital registry that records and verifies clean energy generation and savings. Think of it as a digital ledger that tracks every bit of clean energy produced or saved by a project—be it a solar installation, an energy efficiency upgrade, or a load-shifting initiative.

• Granular Data: WEATS operates at the watt-hour level. This means it records energy production or savings for every single watt-hour, providing a detailed “energy nutritional label.”

• Trusted Verification: A network of Data Validators ensures that every record is accurate and reliable, making WEATS a robust system of record.

• Digital Certification: Each unit of energy or energy saved is documented, creating a digital certificate that serves as evidence of environmental impact.

By linking real-world energy actions to certified digital records, WEATS offers a new level of transparency and accountability in energy management.

Energy Attribute Certificates (EACs)

Energy Attribute Certificates (EACs) are the digital tokens generated by WEATS. They represent the environmental attributes of every unit of energy produced or saved. In simpler terms, an EAC is like a “receipt” that confirms a specific amount of clean energy has been generated or that energy efficiency measures have led to real carbon savings.

• Time-Specific Proof: Unlike traditional Renewable Energy Certificates (RECs) that cover large blocks of energy over a period, EACs are issued on an hourly basis. This means you know exactly when the energy was produced or saved.

• Unique and Traceable: Each EAC has a unique serial number, ensuring that every certificate can be traced back to its source, preventing double-counting.

• Transparent Metrics: EACs provide detailed information about the energy’s origin, including the time, location, and even the specific type of energy or efficiency project involved.

This level of granularity ensures that every clean energy action is recorded in a way that is both verifiable and easily auditable.

The Benefits of WEATS and EACs

1. Enhanced Transparency

By recording energy actions at the watt-hour level, WEATS and EACs create a clear, detailed picture of energy production and savings. This transparency allows organizations to:

• Clearly see the impact of energy-saving measures.

• Report accurate and verifiable data to stakeholders, regulators, and investors.

• Build trust through independently validated, auditable records.

2. Granular Emissions Tracking

With hourly data, organizations can determine not just how much energy is used, but when it is used. This is crucial because the carbon intensity of the grid can vary significantly throughout the day. By understanding these patterns, energy managers can:

• Identify peak emission hours.

• Adjust operations to minimize carbon impact during high-intensity periods.

• Optimize the use of renewable energy and energy storage systems.

3. Incentivizing Energy Efficiency

WEATS captures the benefits of energy efficiency and demand flexibility—areas often overlooked in traditional systems. When energy-saving projects or smart energy management actions occur, EACs are issued as tangible proof of their impact. This allows organizations to:

• Recognize and reward energy efficiency improvements.

• Monetize energy savings in a verifiable manner.

• Prioritize investments in projects that offer the greatest carbon reduction.

4. Improved Sustainability Reporting

Accurate, detailed data is essential for robust sustainability reporting. With WEATS and EACs, organizations can:

• Demonstrate progress toward emissions reduction targets with precision.

• Align with international standards and frameworks for carbon reporting.

• Enhance credibility in public sustainability disclosures by providing audit-ready data.

Real-World Impact

Imagine a university campus, a corporate headquarters, or even a municipal facility where every energy action is tracked with unprecedented detail. With WEATS and Energy Attribute Certificates (EACs), decision-makers no longer have to rely solely on broad, aggregated energy reports. Instead, they gain a dynamic, real-time view of energy production and consumption down to each watt-hour. Here’s how these technologies can transform everyday operations:

Dynamic Operational Adjustments

• Optimized Energy Use: Consider a large campus where different buildings have varying energy needs throughout the day. Using hourly data, facilities managers can identify peak carbon intensity periods—times when the grid is powered by fossil fuels—and adjust operations accordingly. For instance, non-critical energy loads can be shifted to off-peak hours when renewable sources are more prevalent, reducing the campus's overall carbon footprint.

• Load Shifting and Demand Response: With detailed insights into when energy is most carbon-intensive, building managers can implement smart energy management strategies. This might include pre-cooling buildings before peak hours, temporarily reducing HVAC loads, or using battery storage systems to offset demand during high-intensity periods. These strategies not only lower energy costs but also maximize the number of EACs earned by avoiding carbon-intensive grid usage.

Enhanced Project Verification and Monetization

• Project Impact Verification: Every energy-saving project—from retrofitting lighting systems to upgrading HVAC units—generates measurable savings. WEATS automatically issues EACs for these savings, providing a clear, digital record of the project’s impact. This verified data is invaluable for demonstrating the return on investment in energy efficiency projects to stakeholders and investors.

• Incentivizing Further Investments: When organizations can track the precise impact of their efficiency measures, they gain the ability to monetize these savings. EACs, as tradable digital certificates, add financial value to energy efficiency and renewable energy projects. For example, a commercial building might use the proceeds from trading EACs to fund additional sustainability upgrades, creating a virtuous cycle of continuous improvement.

Strengthening Sustainability Reporting and Compliance

• Audit-Ready Documentation: With every watt-hour accounted for, organizations can produce detailed sustainability reports that leave no room for ambiguity. This granular data helps meet stringent reporting requirements set by regulatory bodies and aligns with frameworks like the GHG Protocol. Stakeholders, from investors to regulators, can review these reports with full confidence in their accuracy.

• 24/7 Carbon-Free Energy Commitment: Traditionally, organizations report on their renewable energy usage on an annual or monthly basis. However, the ability to match energy consumption with renewable energy generation on an hourly basis allows for truly continuous, carbon-free energy operations. This level of accountability not only bolsters an organization’s public image but also sets a new benchmark for sustainability leadership.

Empowering Real-Time Decision Making

• Responsive Energy Management: The detailed, real-time insights provided by WEATS and EACs allow energy managers to quickly identify and respond to inefficiencies. For example, if a data center suddenly experiences a surge in energy use during a period of high grid carbon intensity, immediate corrective measures—such as deploying backup generators powered by renewables—can be initiated. This level of agility is critical in today’s fast-paced energy markets.

• Predictive Maintenance and Future Planning: The granular data collected over time enables organizations to perform trend analysis, predict maintenance needs, and plan future energy projects more effectively. By understanding exactly how and when energy is used, organizations can better forecast future needs, optimize capital investments, and ensure long-term sustainability.

Building a Resilient, Sustainable Future

By integrating WEATS and EACs, organizations gain not just a tool for tracking emissions, but a comprehensive system that drives strategic, long-term change. Every building, campus, or facility becomes a living laboratory for sustainable innovation, where data informs every decision, and every action is transparently recorded. This not only improves operational efficiency but also empowers organizations to confidently demonstrate their commitment to reducing their carbon footprint, inspiring trust among employees, customers, investors, and the broader community.

In essence, WEATS and EACs turn the abstract goal of decarbonization into tangible, actionable steps—ensuring that every watt counts toward a cleaner, more sustainable future.

Conclusion

WEATS and Energy Attribute Certificates are revolutionizing the way we think about energy accounting. By providing granular, verifiable, and transparent data, these innovations empower organizations to track emissions reductions with unprecedented accuracy. Whether you’re managing a corporate portfolio, running a university campus, or overseeing a municipal energy program, integrating these systems can significantly enhance your ability to meet sustainability goals.

WattCarbon’s approach offers the tools needed to make real-time, data-driven decisions, ensuring that every energy-saving action is recognized and verified. In a world where every watt counts, WEATS and EACs provide the clarity and confidence required to truly drive the clean energy transition.

For more information on how these technologies can transform your sustainability efforts, please contact our team for a demonstration.

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Let’s start with the feature itself. We’re trying to solve the problem of a lack of trust in claims that are made around sustainability. “I don’t believe your net-zero nonsense” underlies climate skepticism on both the left and the right and makes the middle tune out. Our antidote is a line-by-line explanation of how we provide a verifiable savings claim that shows all of the steps that were taken to get the answer. Now, this line-by-line approach is highly technical, so it’s unlikely to result in a Kumbaya moment for climate, also because people have better things to do than read detailed M&V reports. But the underlying principle gets at what needs to be a regime shift in how we think about decarbonization.

Whenever we don’t really care about the verification of claims, when “good enough” is good enough, we’re implementing an ideology. When we actually care about the verification of claims, we’re solving a real problem.

Looking at the world through this lens is illuminating because it breaks apart the concept of measurement and verification into two distinct components. The latter, verification, is a policy requirement. Some policies require very precise and accurate verification - like paying your taxes; some policies are quite loose - like flossing twice a day. As a result, measurement tends to follow from the verification requirements of policies. The IRS requires your employer to very specifically measure your wages and conducts audits of those it thinks might be cheating. As a result, tax M&V is extremely rigorous. Your dentist just gives you a stern lecture about gum health. And let’s be honest, there’s not much M&V when it comes to flossing regularly.

So if we want to bring trust back into claims around decarbonization, we need approaches that demand rigorous verification standards. And these verification standards need the types of measurement tools that can give all sides confidence that the claims being made are legitimate.

The Value of Public M&V

When we launched our EAC procurement pilot in 2023, one of the big questions we wanted to answer was whether or not we could measure energy and carbon savings both across different types of energy assets and over long periods of time. This would involve a more generalized approach to M&V than had traditionally existed. We created EACs (Energy Attribute Certificates) that would provide the granularity needed for verification, but while we tried to be transparent about how we were calculating savings, at the end of the day, you just kind of had to take our word for it.

Side note, for a while we thought we would just take anyone’s M&V and put the savings into WEATS. But after a few early experiences where the third-party calculation methodologies were basically indefensible, we decided to pull the plug on that experiment.

Anyway, making our M&V public became a long-term goal of ours, but it wasn’t at all obvious how to make this happen. Since we are calculating savings on a nightly basis, and the underlying data changes each time, we had to have some way to reproduce all of the data in a structured way to be able to show our work alongside each new batch of EACs. And we had to template the methodologies so that they would show up properly in the user interface with the proper links to supporting documentation.

In our 2023 pilot, we deployed a portfolio of solar assets, a portfolio of demand response assets, and a portfolio of heat pump assets. The first two were a fixed-term, one-time calculation, but the heat pumps are generating EACs on an ongoing basis for their full 15 year life. These projects were deployed by Elephant Energy, QuitCarbon, and BlocPower and are most of the entries that you see today when you look at the WEATS Registry.

For the heat pump methodology we adapted the approach of the State of Massachusetts for heat pumps, but substituted NREL’s End Use Loadshape database to create hourly load profiles scaled to weather normalized annual consumption from energy bills. These methodological details are specified in the M&V Plans (located at https://docs.wattcarbon.com) and now show up line by line in the Registry. Finally, we’ve achieved at least a v1.0 of this concept!

Strategic Implications

A few months ago, we announced that we were no longer trying to run a marketplace on top of serving as the M&V and system of record for decarbonization projects. The marketplace was a conflict of interest for us and the reality of the situation is that the market is so tiny that all of the deals getting done were happening bilaterally anyway. This was hard to swallow (who doesn’t want to have a marketplace business), but like so many of these decisions, by closing one door we have opened up others.

It turns out that lots of organizations have been trying to raise the bar on verification, but have been stymied by a lack of resources for rigorous measurement and no way to keep track of everything. The curse of ad-hoc analysis and PDF reports strikes again.

More and more, we’ve been hearing from organizations that are interested in setting up their own decarbonization programs, monetizing the value of their EACs, or just trying to understand their impacts better with more consistent, transparent reporting. And with the now certain demise of both international as well as federal support for the energy transition, the need has never been greater for infrastructure that allows for distributed decarbonization programs to flourish.

What we are able to show publicly in the WEATS Registry is a small sliver of the powerful analytics that are unlocked for the project developer within the WattCarbon platform. Our early partners are now reaping the benefits of these insights, but we want to bring the power of automated M&V to everyone who is deploying clean energy.

So the next big feature that we’ll release is the ability for any organization to connect to a data services provider and automatically start generating the same kinds of insights that are available to our early partners. No longer will they be bound by the requirement of transacting EACs. But rather, the EAC becomes their way of showing the credibility of their claims, holding themselves accountable, and generating confidence within their own stakeholder ecosystems.

Hope is hard to find in the mayhem that grips our daily lives, and sometimes it feels easier to just ignore the fact that the earth is now substantially warmer than at any other time of human history. There’s a lack of global consensus on how to fix things, an outright hostility in the federal government, and a general skepticism amongst the general public that climate should even be an issue. It’s unlikely that we reach any sort of global consensus any time soon, and federal elections are still nearly two years away. So rather than sit around and sulk, the one thing we can do is address the pervasive skepticism that climate investments are meaningful. The way that we do that is by raising our own standards. We won’t win by implementing an ideology, we’ll win by solving real problems. When that happens, and we have the receipts to show for it, the case will become much easier to make everywhere.

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At the February 20th meeting, Steve and I will share the work we’ve been putting in to organizing a comprehensive methodological framework that allows us to calculate the carbon savings from any type of device, in any type of building, using any type of data. We’ll show how the Methodologies, which are approved by the OpenEAC Alliance members, are connected to specific M&V plans, which represent a sort of contract between parties to execute a particular implementation of a methodology. The M&V plans are then implemented within WattCarbon’s software, which then ultimately outputs savings calculations that show up in our WEATS Registry.

If you go look at our Registry today, you’ll see that the vast majority of what shows up are EAC allocations from the pilot we ran last year, where our brave early-adopters bought into portfolios of heat pump projects from Elephant Energy, QuitCarbon, and BlocPower. They pre-purchased a stream of EACs that helped get these projects going. Now that the projects are fully operational, the EACs are being generated on a nightly basis and allocated to the buyers on a pro-rata basis. If you look carefully, you’ll see that there are other things happening on the Registry too, like new assets being registered, etc., but the main action is the distribution of the EACs.

Coming Soon…M&V in the Registry

What you won’t see today, but you will shortly, is the M&V. How did we arrive at the savings calculation that determines how many EACs are generated? What exact methodology did we follow? Where is the M&V plan filed? What were the intermediate outputs? These are the important questions that ultimately make the savings calculation meaningful.

Our industry of M&V professionals has never been good at showing its work. Part of this is because of technical limitations. The work is done in Excel and shared in a PDF report. Neither of these formats lend themselves to transparency. But there’s a darker side to the opacity as well. It’s fairly easy to game M&V to generate the outcome that you want. There’s a conflict of interest that makes it easy for everyone to look the other way when rosy numbers are reported.

In fairness, this is part of a broader problem of lack of transparency. Over the past decade, we’ve witnessed an unprecedented investment into decarbonization projects. It’s likely that more than $3 trillion has been invested in the United States alone in the past five years. Most of these investments were made because they were the right thing to do. Most of us collectively understand that GHG emissions are leading to unsustainable increases in global temperatures and that the only way to forestall catastrophic changes to our climate is to eliminate these emissions.

But while we’ve made these investments in good faith, we haven’t built the data systems or tools that would be able to tell us whether or not they are returning the value promised. We’ve been focused on ESG, not ROI. As political winds have shifted, so has scrutiny of clean energy investments. Most of these still make sense because of the cost-savings alone, but in order to make the case, you have to be able to trust your numbers.

This is why we’re putting M&V into the Registry. We know that right now the scariest words to a head of sustainability are “show me how you got your numbers.” This is a solvable problem. And by increasing the transparency and the trust between parties that carbon emission reductions are real and validated by actual data from the projects themselves, we believe that we can reinvigorate investment into decarbonization, irrespective of the hostility at the national level of government and the impotence of global climate institutions.

Tonight I want to write about markets and externalities. Externalities are basically the side-effects of economic activity that aren’t priced into transactions. They can be positive or negative. An example of a positive externality would be a beekeeper who sells honey, but whose bees also pollinate nearby crops. The farmers get their crops pollinated for free (the externality), while the beekeeper gets to sell honey. An example of a negative externality is pollution. We aren’t paying for the CO2 that our cars emit (the externality), we’re paying for gas so that we can drive across town.

As an undergrad, I was introduced to Mancur Olson’s book The Logic of Collective Action. This book described why voluntary organizations were so hard to sustain. The answer is that public goods (i.e., externalities) were really difficult to get people to pay for without forcing them into it or giving them some sort of side benefit - like NPR giving away tote bags to those who donated money. I thought this was fascinating and I ended up writing an entire Ph.D. dissertation on the topic.

It’s probably pretty safe to assume that nobody is trying to intentionally cause global warming. Basically, CO2 in the atmosphere is an externality, largely the result of burning fossil fuels for entirely justifiable reasons - like keeping warm and making electricity. And when I switch over to an EV to drive around town, the lack of emissions is still mostly an externality. I’m not driving an EV to save the planet, I’m driving because I need to get from point A to point B.

Generally, as a society we want to increase positive externalities and reduce negative externalities. More bees equals more honey and better pollination of our crops; less pollution equals less global warming, sickness, forest fires, etc. The reason we have government policies is that generally speaking it’s hard to tackle externalities at scale with NPR tote bags. Environmental groups have tried this over the years, but results are decidedly mixed and they mostly end up appealing to government for enforcement. The last few years, corporations have tried to create positive externalities by buying clean energy and carbon offsets, the latter type of purchase being an attempt to internalize an externality.

The reason I was thinking about all of this was that we had a conversation at our team offsite last week about how to define an “EAC”. We’ve been putting work into our website and we have a new section where we define what an EAC is. Most of the time we describe it as an “Energy Attribute Certificate” representing a unit of energy (like kWh), but other times we refer to it as an “Environmental Attribute Certificate” representing a unit of carbon emission reductions. This feels a bit like cheating - having it both ways. Does the EAC represent the energy itself or environmental benefits of the energy?

Maybe it’s better to think of an EAC as an “Externality Attribute Certificate” representing the value of the externality associated with a particular action. This externality might come in the form of infrastructure benefits, such as a more stable grid that benefits from demand flexibility, or in the form of environmental benefits, such as reduced carbon emissions. And in that sense, perhaps the EAC is just another form of an NPR tote bag. It’s the credit you get for creating a positive externality.

In the absence of coercion from the government, we have to take voluntary action if we’re going to try to create positive externalities. If you want to prove that your action resulted in a positive externality, you’ll need the EAC to show your impact. And if that’s the case, I think “Externality Attribute Certificate” might just be the right way to think about the acronym.

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Still, there are silver linings in these storm clouds, the most encouraging of which reflect efforts by companies to build enduring competitive advantages by taking advantage of climate-positive technologies like batteries, heat pumps, and distributed solar.

We took notice of this early last year after launching WEATS, which we had intended as a system of record for the OpenEAC Exchange. It turns out that quite a few other companies had been imagining how they could utilize a system of record to prove the impact of their own innovations. I don’t think I had quite realized how much of a problem this was for the broader industry. We definitely weren’t prepared to offer WEATS as a service at the time, as we were pretty focused just on getting transactions to work.

By the middle of 2024, once we were able to deploy revenue-grade granular certificate tracking, we set out to make WEATS the system of record for all types of energy decarbonization projects, not just the transactions of the OpenEAC Exchange, so that the entire industry could have access to better data infrastructure to prove carbon emission reductions.

Now, as we move into 2025, I want to take the opportunity to reflect on the most exciting of the use cases for EACs and where we expect the most progress to be made in the coming year.

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1. Selling EACs to fund clean energy projects

The most obvious use case for EACs is selling them to raise money for decarbonization projects. As flawed as the concept of a carbon offset is, and as deeply corrupt as the nature-based carbon-offset-industrial-complex has become, there is a simplicity to the notion that the environmental benefits of a decarbonization project can be quantified and priced. We can either do this through public programs (using taxpayer dollars to fund incentives) or voluntarily through corporate net zero commitments to purchase EACs. Until we put a price on carbon to encourage a shift away from fossil fuels, we have to find carrots to achieve the desired result. Corporate purchases of EACs in the $50-$100/ton range can massively improve the economics of energy decarbonization projects and make it possible to dramatically increase the pace of the energy transition.

2. Using EACs to prove clean energy

Granular certificates that attest to the time and locational generation of electricity (along with details about the renewable energy source or generation mix, the prevailing carbon intensity of the grid at the time, the commercial operation date of the system, and other attributes) are becoming foundational for the clean energy economy. Utilities are providing this data to customers to prove the delivery of clean energy; the federal government has required EACs for green hydrogen producers who want to claim tax credits; and companies who provide services using clean energy are using EACs to ward off claims of greenwashing.

We are most excited about companies that are using clean energy to create competitive differentiation. These companies are doing things like powering their buildings and data centers with 24/7 carbon-free energy, providing electric vehicle charging that’s sourced from clean energy instead of the dirty electricity from the local grid, shifting away from fossil fuels for industrial processes, and more. To avoid greenwashing accusations, these companies are turning to EACs to prove their impact. Imagine running an AI algorithm on 100% carbon-free energy or charging your commercial vehicle fleet from a battery powered by connected solar panels. If you offer a superior product, your customers will reward you with loyalty, especially if that product is genuine in its claims.

3. Leveraging EACs for clean energy finance

More than anything else, the energy transition suffers from a finance problem. Our industry still mostly uses the playbook of asset-backed finance and consumer lending, meaning that risk gets incorporated into interest rates and paid for by the end user. Energy cost savings are often completely wiped out by interest payments made to the lender and the customer ends up seeing very little benefit from doing the project.

The Greenhouse Gas Reduction Fund (GGRF) portion of the Inflation Reduction Act will address this problem by providing substantial liquidity for state green banks, but we need additional trillions of dollars of capital to be deployed in the next decade.

Over the past year we’ve been working on a concept we call Green Equity Finance, which effectively trades the rights to EACs for a deferment of interest payments. If you are a company with a large balance sheet, you can loan money directly to clean energy projects and earn the rights to the EACs instead of taking interest on your loan. This serves to reduce the cost of capital in absolute terms (the corporate rate is substituted for the consumer rate) as well as in relative terms (the project cost goes down by as much as 30%). It also means that the costs of EACs are quite low relative to other options and the “additionality” impact is quite high.

How WattCarbon Fits In

All of these EAC use cases depend on rigorous measurement and verification and a system of record. Without these pieces, there is no way to validate that the action being taken is achieving its intended results, and no way for an organization trying to achieve its decarbonization goals to make a credible claim. Both existing and future decarbonization investments will need to be justified; without a system of record and proof of impact these investments will face scrutiny and face the threat of cancellation.

WattCarbon is working side-by-side with organizations that want to keep pushing forward on the clean energy transition and prove the business case for climate-forward technologies. Our system of record and the M&V behind it are proving critical in the validation of EACs that are sold to raise money for projects; for the claim that clean energy is being delivered; and for the finance innovations that are so critical for making clean energy investment affordable. We are looking forward to 2025!

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