How $5M Will Help A Startup Tackle The Emerging Energy Storage Market
A California energy storage startup has raised $5 million to fund projects that it will sell to businesses under long-term contracts, a model that resembles the leases that have made rooftop solar installations popular.
Stem plans to use the money from Clean Feet Investors to finance up to 15 megawatts of lithium-ion battery systems. Stem is targeting hotels, chain stores, fast restaurant and light industrial companies, said Prakesh Patel, vice president of capital markets and strategy at the startup.
Stem is one of a growing number of energy storage system and service providers that are gunning for California as their primary market. The state last week passed the country’s first mandate that will require its utilities to buy energy storage to help them manage the growing amount of solar and wind electricity that flows into the grid.
Investors such as Clean Feet Investors will be the first wave of money managers who are willing to take big risks. Given that the energy storage market is so new, major banks are watching to see whether various types of storage equipment will deliver the promised performance over time and how money can best be made. Right now, many of them aren’t so willing to invest in what they consider to be unproven technologies.
The new fund enables Stem to market to a broader set of customers. Businesses would sign contracts in which they pay a monthly fee for using the energy storage and Stem’s software, which collects and analyzes onsite energy use and other data in order to control how frequent and how much the electricity should flow in and out of the batteries throughout the day. FULL ARTICLE:
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