Commercial and industrial (C&I) consumers are increasingly looking beyond renewable energy procurement to reduce electricity costs, with energy efficiency upgrades emerging as another avenue to lower operating expenses.

One such example is a commercial mall in Mumbai that is expected to save ₹217 million (~$2.29 million) over the life of its upgraded heating, ventilation, and air conditioning (HVAC) system through a retrofit completed without any upfront capital expenditure.

The mall’s aging chiller infrastructure had become increasingly inefficient, forcing it to rely on expensive rental equipment to maintain cooling during system disruptions. Significant energy was also being wasted due to manual maintenance and outdated energy management systems. However, budget constraints had prevented the mall from modernizing its HVAC system and pursuing additional decarbonization initiatives.

Green financing platform, Two Point O Capital (TW.O Capital), completed the retrofit in December 2025 under a performance guarantee-based contract that commits to approximately 40% power savings while transferring performance and maintenance responsibilities to the service provider.

The project is expected to reduce electricity consumption by approximately 1.2 million kWh annually and lower utility-related operating costs by ₹11 million (~$116,000) in the first year alone.

HVAC efficiency improved from approximately 1.2–1.3 kW/ton of refrigeration (TR) to 0.8 kW/TR following the retrofit, bringing the system closer to best-in-class performance levels.

While the equipment is expected to operate for more than 15 years, TW.O Capital provides a performance guarantee for the initial five-year contract period.

Manya Ranjan, Co-Founder of TW.O Capital, said the project involved replacing the mall’s 15-year-old chillers with new, high-efficiency systems. The resulting energy savings help fund the lease payments for the upgraded equipment.

The arrangement illustrates a financing model in which efficiency upgrades are funded through the savings they generate, allowing commercial consumers to modernize critical infrastructure without deploying capital upfront.

Under the performance-based structure, the customer pays a fixed monthly fee while receiving contractual guarantees tied to the cooling system’s efficiency and operational performance. The contract involves supplying chillers to modernize the HVAC system, their installation, annual maintenance, and performance guarantee services for five years.

The retrofit required an investment of approximately ₹70 million (~$739,000). According to TW.O Capital, similar projects typically achieve payback within three to three-and-a-half years through reduced energy consumption and operating costs.

The HVAC retrofit model can be replicated across more than 20 malls operated by the same commercial mall chain.

The project demonstrates how performance-based financing models can help unlock energy-efficiency investments in commercial buildings, a segment where aging infrastructure and capital constraints often delay modernization despite clear economic benefits.

Last year, in an interview with Mercom India, Ranjan said that beyond decarbonization solutions, the company planned to expand access to capital at the distributed level by aggregating bankable and credible projects and using on- and off-balance sheet structures to deploy capital and scale green financing in India.

Mercom India will host the sixth edition of the Mercom India Renewables Summit 2026 on July 1-2, 2026, at the Hyatt Regency, New Delhi. The Summit will bring together key stakeholders from across the renewable energy sector for discussions backed by Mercom’s proprietary research and market intelligence. You can register for the event here.