Budderfly plans to allocate $500 million for small and mid-sized U.S. cities to cut energy costs

The plan

Shelton, Connecticut-based Budderfly, which helps clients cut power costs, will allocate $500 million to assist cities in updating aging facilities by adding solar panels, batteries, and high-efficiency HVAC. It is partnering with Schneider Electric, which will supply energy management and automation gear for a push targeting roughly 100 municipalities. Budderfly will finance the effort with existing capital.

How it works

Budderfly will handle installation, ownership, and operations, and cities will repay gradually out of the savings the upgrades generate. This follows the company's energy-as-a-service model, where Budderfly covers upfront costs and customers pay back through reduced utility bills.

Why now

Cities and businesses are hunting for ways to rein in power bills amid stubborn inflation. Since the start of 2025, average monthly commercial electricity prices have risen 10 percent, according to Bloomberg data, with rates pushed higher by utility infrastructure spending and fast-growing demand from AI data centers. "Cities are being asked to modernize aging facilities, while electricity costs and budgets remain tight," Al Subbloie, Budderfly's Chief Executive Officer, said. He noted that many smaller municipalities do not have the funds required to pursue cost-cutting improvements.

First project and financial footing

In Cadillac, Michigan, Budderfly and Schneider's first project will direct $4.4 million toward energy system upgrades at several sites, such as city hall and the wastewater treatment facility. Budderfly says it has more than 9,000 customers, among them McDonald's Corp. and Planet Fitness Inc.

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The company's financing totals about $1.3 billion across debt and equity. Partners Group has contributed more than $500 million in equity, and Nuveen, Vantage Infrastructure, and BlackRock Inc.'s Global Infrastructure Partners have lined up $650 million in debt facilities, with additional borrowing coming from smaller partners. For investors, a pipeline touching about 100 municipalities says demand for efficiency tech and financing is meeting a rate backdrop where savings can self-fund the spend.

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