Today, Heating Ventilation and Air Conditioning (HVAC) Company, Johnson Controls International, announced that with Apollo Global Management, it is forming a joint venture. Specifically, this enterprise will provide services to businesses; particularly, to help them improve the energy efficiency of their buildings.
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Thus, the venture will focus on North America and utilize Johnson Control’s technology. Besides, it will use the capital of the private equity firm. Accordingly, these elements will allow both Johnson and Apollo to enhance structures; particularly, without paying significant sums upfront.
About the venture between Johnson Controls and Apollo
Moreover, the venture will make changes, such as installing renewable power generation and battery storage. Also, more efficient heating, ventilation, and air conditioning (HVAC) system, and then charge a monthly fee.
In fact, as Johnson and Apollo noted in a media release, reducing energy consumption by buildings is a significant step; mainly, to achieving sustainability goals. Additionally, it can help to avert major climate change.
Considering that residential and commercial buildings in the United States make up around 40% of the country’s total energy consumption (EIA), this is even more important.
A challenging environment for building modifications
However, one crucial disadvantage is that building modifications can be expensive. Particularly, this adds to a prohibitive consideration for companies; that indeed, are already contending with economic uncertainty due to the coronavirus pandemic.
Therefore, the joint venture falls into the emerging energy-as-a-service sector, aiming to address this cost issue. Accordingly, the savings that result can cover much of the monthly payment.
In this sense, Geoff Strong, Apollo’s Co-Head of Infrastructure and Natural Resources, told Reuters the venture would target large corporates.
