Stem, a startup providing financing for energy storage installations, has received a $100 million investment from Starwood Energy Group Global.
The California-based energy software and storage provider has raised over $350 million in three years to finance energy storage installations for no money upfront. Stem said it has based its business model on the finance arrangement that contributed to the rise of residential solar systems. However, instead of generating energy, Stem's product saves it.
“This financing vehicle gives our customers access to capital and allows them to achieve the benefits of intelligent energy storage without making a major investment,” Stem chief executive John Carrington said in a statement. “Distributed energy resources such as those provided by Stem will be part of the foundation of the future electric grid,” added Starwood vice chairman Madison Grose.
Some of Stem's early storage-as-a-service customers include Safeway, Wells Fargo and Adobe. Its systems combine batteries with software that automatically reduces energy use during peak demand times, lowering monthly electric bills by up to 20 percent.
As the clean energy market matures, businesses are finding ways to make newer technologies more accessible to customers. Countless solar companies have been created in the past few years after its financing model was perfected, and a company called United Wind is pioneering this method for small-scale wind turbines.
Energy storage is still emerging as a viable energy technology, but its potential is recognised. Ratings agency Standard & Poor's predicts the world will need 150GW of installed battery storage if it is to double the share of renewable power by 2030.
Stem launched in 2013 with a $5 million investment from Clean Feet Investors I. It has now installed or has under contract more than 75MW/hours of projects across 480 locations in the US. It has added other investors, including Angeleno Group, Iberdrola, GE Ventures, Constellation Technology Ventures, Total Energy Ventures, Mitsui, RWE Supply & Trading and Mithril Capital Management.
The company is also working with utilities including Southern California Edison, Hawaiian Electric and the California Independent System Operator.