RetroFix AI: Making it easy for every building to decarbonize

By: Collaborative Team

Building operations are responsible for about 25% of global energy CO2 emissions. In dense cities, like NYC, DC, Boston and Philadelphia, these numbers are even higher. In some jurisdictions like NYC, cities are actually taking action to penalize building owners for exceeding emissions threshold. Accordingly, investment into critical building upgrades are becoming more and more prevalent.

RetroFix AI was formed to make it easy for every building in the world to decarbonize. Starting with a platform to help building contractors source and apply for tax incentives and sustainability credits, RetroFix wants to build the TurboTax of building rebates using instant AI assistance, affordable reporting, maximized incentive stacking and streamlined applications.

Founders, Isaac Toscano and Daniel Portela, founded RetroFix earlier this year and joined YC S24 to get to work building. With backgrounds in material engineering and CS from MIT, they knew they wanted to build a tool that used AI to better understand regulatory constraints and compliance, and could ultimately accelerate the energy transition. I recently sat down with Isaac after demo day to learn more about his background, their GTM and why they decided to build a product at the intersection of AI and sustainability.

Why did you choose to build a rebates tool for contractors? Are there incentives to be taken into consideration that are much broader and/or holistic than an immediate point-of-sale feature for energy-efficient upgrades?

Daniel and I saw a significant imbalance in the incentives market. There were many contractors we spoke to that would choose to cut into their own project margins rather than process incentives themselves. The largest pain point was not only identifying the best incentive and staying up-to-date, but also, having the administrative capacity to take on the work of processing an incentive.

The incentive application itself can take a number of days. However, the entire procedure to actually receive the incentive in your hand, from start to finish, can take a number of months. A contractor must maintain proper work logs, invoices and work orders for months to ensure they can receive the incentive on behalf of their client. Imagine doing all of this work while having other projects in your pipeline – the administrative needs can be incredibly burdensome.

We took this opportunity, and with my expertise as a former HVAC technician, to address this particular pain point today.

What is the biggest misconception about what’s challenging for building decarbonization?

Building decarbonization at its core, is a unit economics problem. What most buildings are concerned with is understanding what the payback period on an investment will be. Buildings, like any business, mostly care about the bottom-line impact that energy efficiency, or decarbonization penalties will bring to their business. As a result, incentives play a very strong role in lowering the amount of equity that a building has to place on an investment in its infrastructure, not the actual quality of the technology.

Easy access to incentive information (without spending hours searching) and access to a process that can submit applications on behalf of an individual is non-trivially challenging. Today, contractors are left to walk a building through all available incentives and financing options, effectively placing the title of “Financial Expert” on the contractor. This is why incentives are not being deployed as efficiently as they could be today. We are helping to address this inefficiency with AI.

How has your background and lived experiences led you to become a founder working at the intersection of AI and sustainability?

As a former HVAC technician in Houston, I picked up a lot of the skills that Daniel and I are using today to engineer our software. It gives us the opportunity to personally connect to our customers, while having unique insights as to how a contractor prefers to work! We use this lived experience today to not only provide great customer service, but tailor our platform in the best way possible.

Spending time as a private equity analyst, I realized that at the core of any infrastructure project, the biggest “needle movers” are concessionary capital, and low-cost financing capital. With this financing lens, we know exactly how to target the industry and how to continue building a platform that can service both buildings and contractors alike.

Daniel and I are also both deeply passionate about helping people. We care a ton about not only providing something valuable, but also a solution that will actually help solve their problems.

Image by Dorian Mongel on Unsplash