Author: David Arscott, CEO PyTerra Ltd
Looking back over the last few years of getting our business off the ground, there is one particular regret which stands out.
PyTerra’s journey started in the water sector, setting up R&D projects with universities such as the University of Surrey, and large corporates such as WSP. Our approach was simple. By partnering with large organisations, we could propel our ambitions in the sustainability sector. Charles Handy, the business guru, wrote about this type of relationship in his book “The Elephant and the Flea”.
That particular chapter in our business history did not conclude satisfactorily. Covid played a large part in derailing plans, but it especially highlighted one point. As an SME, unless you have leverage, then meaningful business relationships can come and go in an instant.
What has this to do with the business of sustainability? Our journey changed in April 2020 when we pivoted the business away from water and towards low carbon and renewable energy. We also focused our sights on Bristol as a preferred location and first market. Our business moved away from optimising the management of one resource (water) to another – finance. The concept was to connect finance with low carbon projects. The challenge was to see how finance of all sorts can be crowd sourced and channelled through to those who need it in order to move their households and businesses towards net zero.
We looked at how households and SMEs can leverage affordable finance. Approached individually, this is very difficult, but harnessing the power of local collective voices, on the other hand, can be a powerful way to be heard. Embedding these messages in local ESG narratives can then amplify buying power. This collective voice gives investors the sense that they are investing into a neighbourhood with a sense of purpose rather than just individuals. In other words, it creates leverage.
PyTerra is using this approach to change the way that finance reaches low carbon projects. We are doing this through a simple device: creating an incentives system linking incentive providers with low carbon projects via SMEs and households. Financial payments can also be influenced by incremental improvements in the energy profiles of each property – a reward for good behaviour approach. In this way, properties can send out collective signals to the market to attract incentives which are then spent on low carbon projects, goods and services. More incentives will then flow to those clusters which are willing to collaborate and change their own behaviour towards energy efficiency and carbon output.
Here is an example. Replacing gas boilers with air source heat pumps is not necessarily the best solution for many properties. Heat networks instead are becoming a preferred solution to local energy needs. They can be powered by several alternative energy sources: boreholes, waste heat from industry, biomass and green gases. Bristol City Council wants to roll out heat networks, but this is only happening in the city centre. Developers such as Vital Energi, Kensa and Metropolitan want SMEs and households to connect to planned networks across all urban areas, but the up-front cost of connection for each property may well be prohibitive. To address this ‘connection risk’, PyTerra’s platform will be able to crowd source finance into each property’s own incentives account to close this affordability gap. Sources of blended finance include grants, corporate sponsorship and low cost impact finance.
We hope that our innovative business model helps to create a new ‘prosumer’ marketplace where SMEs and householders alike can leverage their collective buying power to create an affordable route to net zero.
North & East Bristol Enterprise Support has supported David and Pyterra though 1:1 mentoring with expert advisors and marketing workshops. Pyterra have also our 33% cashback grant which helped him cover initial costs of software development. Enrol today to North & East Bristol Enterprise Support to find out more about our business support and grants.