The Energy Collective

The world's best thinkers on energy and climate

  • Home
  • Post Here
  • Columns
    • Electricity Markets & Policy Group
    • Full Spectrum
    • Energy and Policy Developments
    • Game Changers
    • Energy for Human Development
    • Seeking Consensus
    • Green Growth
    • New Energy Voices
  • Fuels
    • Oil
    • Wind
    • Nuclear Power
    • Coal
    • Natural Gas
    • Solar Power
    • Renewables
    • Biofuels
    • Geothermal Energy
    • Wave & Tidal
    • Hydro Power
  • Environment
    • Carbon and De-carbonization
    • International Climate Conferences
    • Sustainability
    • Climate
    • Public Health
    • Water
    • Recycling
  • Grid
    • Smart Grid
    • Electricity
  • Tech
    • Cleantech
    • Green Building
    • Storage
    • Rare Earth Minerals
  • Business and Economy
    • Cap-and-Trade
    • Agriculture
    • Efficiency
    • Green Business
    • Utilities
    • Finance
    • Green Jobs
    • Subsidies
    • Risk Management
  • Politics
    • Environmental Policy
    • Energy Security
    • Communications and Messaging
    • China
  • Transport
  • Help
    • FAQ
  • Account
    • Login
    • Register

Can No-Money-Down Financing Unlock the Batteries-for-Buildings Market?

March 7, 2014 by Jeff St. John

Print Friendly, PDF & Email

Green Charge Networks, the startup that’s putting batteries in commercial buildings to help shave utility bills and balance the grid, has just joined a small but growing roster of energy storage players trying out a model that’s helped solar PV hit mainstream and which could push energy efficiency to much broader markets: no-money-down financing.

On Tuesday, Green Charge and partner TIP Capital announced a $10 million fund aimed at giving customers a free installation of the startup’s GreenStation battery-plus-energy-management system, then paying off the cost through utility bill savings. The program is part of TIP Capital’s broader offering for fixed-rate monthly financing payments for lighting retrofits, HVAC upgrades, and other qualified energy-efficient projects — now including energy storage.

Vic Shao, CEO of Green Charge, said the company is targeting 5 megawatts of installations by year’s end, up from 1.5 megawatts as of this week — a figure that’s grown by 400 kilowatts just in the past month. Customers include 7-Eleven stores, Walgreens drug stores and an Avis rental car location in New York. The company also added a UPS distribution facility to the list last week.

Since its 2008 founding, Green Charge has tapped $12 million in stimulus grants, as well an undisclosed amount of funding from investors including ChargePoint founder Richard Lowenthal, to build out its demonstration projects with New York utility Consolidated Edison. Using systems that range from 30 kilowatt-hours to 300 kilowatt-hours in size, it’s been able to deliver average utility bill reductions of 15 percent or more, and with three years of data behind them, “we know they work,” Shao said.

Now, either with new customers or “with customers that we already have, we can go ask them to do mass deployment. Instead of a couple, two or three at a time, we want to start doing the next hundred,” he said. “That’s really the aim for this project fund.”

It’s a similar move to that made by Stem, another fast-growing batteries-for-buildings startup with about 6 megawatts of systems installed so far, mostly in California. In October, Stem launched a $5 million fund with Clean Fleet Investors to boost installations of its own building energy storage systems, and expects to bankroll about 15 megawatts of storage systems through it.

Both companies are pushing a model that’s already helped companies such as SolarCity, Sunrun, Clean Power Finance, Vivint and SunPower create a booming new market for solar PV by offering low or no-cost installation, then securing repayment streams from customer energy savings, net metering payments, tax credits and other sources.

That solar boom, in turn, is helping to drive growth for batteries to help commercial buildings incorporate their own solar power into energy management. Indeed, SolarCity and cousin company Tesla Motors in December launched their own energy storage financing program, targeted at commercial buildings, to bolster their long-running pilot program putting batteries into solar-equipped homes.

But solar isn’t necessary for customer-sited energy storage to pay for itself. What’s really driving the first wave of building battery systems are demand charges. Those are the portions of utility bills that building owners pay when their total electricity consumption hits or exceeds certain thresholds at any moment in time. Because these “peaks” are hard to monitor or predict, they’re hard to prevent — and in certain markets, like California or New York, they can add up to a significant portion of overall utility bills.

GTM Research predicts the U.S. market for distributed energy storage will grow at a 34 percent cumulative annual growth rate to reach 720 megawatts by 2020, driven largely by the demand charge business case, but also boosted by solar integration needs. For example, customers who installed solar PV to reduce energy consumption, but then get moved into rate structures that emphasize demand charges, may want to add batteries to put that solar power to use in capping consumption peaks.  

Green Charge CEO Shao noted that the company is working with one undisclosed customer that’s combining its battery system in the cost of a solar system receiving the 30 percent federal Investment Tax Credit for solar projects. That’s an additional boost to state grants available in California — and soon to come in New York — that help pay for distributed energy systems including storage.

Other customers are backing up plug-in electric vehicle chargers, which can add huge spikes to power consumption that need flattening out, he said. EV chargers are another big capital expense ripe for financing, as ChargePoint is doing under a $100 million fund with Key Equipment Finance.

But perhaps the most interesting aspect of Green Charge’s partnership with Michigan-based TIP Capital is in how it brings a new quantity to the energy efficiency field, Shao said. While traditional efficiency retrofits are focused on reducing total energy consumption, they may leave out the matter of peak usage, demand charge costs, and other costly pieces of the utility bill puzzle.

Green Charge and other building-installed battery systems provide “what we call power efficiency — it’s perfectly complementary to what TIP Capital does today with energy efficiency,” he said. “They target kilowatt-hours, and we target kilowatts.” In markets like California, where energy rates have slowly declined while demand charges have risen, that’s a natural addition to energy efficiency offerings — and one that could give building-based battery systems an additional path to market through traditional efficiency retrofit and energy services players. 

Indeed, Shao has written a white paper on the subject of power efficiency, calling it the “next frontier” in energy efficiency savings. A host of startups and giant energy services companies are creating new financing models for energy efficiency, in hopes of surmounting existing economic barriers and opening broader and deeper markets for their services. Perhaps it’s time to start adding new terms like “power efficiency” to the lexicon.

Photo Credit: Batteries for Buildings/shutterstock

greentech mediaGreentech Media (GTM) produces industry-leading news, research, and conferences in the business-to-business greentech market. Our coverage areas include solar, smart grid, energy efficiency, wind, and other non-incumbent energy markets. For more information, visit: greentechmedia.com , follow us on twitter: @greentechmedia, or like us on Facebook: facebook.com/greentechmedia.

Related posts:

Here’s How to Build 100% Clean Renewable Energy in the U.S. Before 2040 Green Infrastructure: Best Practices for Cities TSO and DSO Coordination: Key for the Integration of Renewables Fancy Having Your Own Power Plant? “Fuel Cell Micro-Cogeneration is Market-Ready”

Jeff St. John

Filed Under: Cleantech, Efficiency, Electricity, Electricity Grid, Energy, Fuels, Green Building, Green Business, Risk Management, Smart Grid, Sustainability, Tech, Utilities Tagged With: building batteries, loan guarantees

  Subscribe  
newest oldest most voted
Notify of

The Energy Collective Columns

Full Spectrum: Energy Analysis and Commentary with Jesse JenkinsEnergy and Policy Developments with John Miller
Game Changers column badgeEnergy for Human Development Column
Seeking Consensus with Schalk CloeteGreen Growth with Silvio Marcacci
New Energy VoicesMore coming soon...

Latest comments

  • Bas Gresnigt on New Solar Capacity Exceeded All Other Fuel Sources Combined in 2017, Study Finds Bob, Why so negative? Once the costs of nuclear were less than fossil. Partly thanks to in hindsig (April 20, 2018 at 11:05 AM)
  • Jarmo on Closing Nuclear Reactors in Ohio and Pennsylvania Will Thwart Climate Goals History shows that nuclear can deliver only base load. Hence it needs fossil plants to deliver the v (April 20, 2018 at 6:30 AM)
  • Roger Arnold on Closing Nuclear Reactors in Ohio and Pennsylvania Will Thwart Climate Goals History shows that nuclear can deliver only base load. Hence it needs fossil plants to deliver the v (April 20, 2018 at 5:44 AM)
  • BobMeinetz on Closing Nuclear Reactors in Ohio and Pennsylvania Will Thwart Climate Goals History shows that nuclear can deliver only base load. That's a lie, Bas, and you know it is. Below (April 20, 2018 at 4:43 AM)

Advisory Panel

About the panel

Scott Edward Anderson is a consultant, blogger, and media commentator who blogs at The Green Skeptic. More »


Christine Hertzog is a consultant, author, and a professional explainer focused on Smart Grid. More »


Elias Hinckley is a strategic advisor on energy finance and energy policy to investors, energy companies and governments More »


Gary Hunt Gary is an Executive-in-Residence at Deloitte Investments with extensive experience in the energy & utility industries. More »


Jesse Jenkins is a graduate student and researcher at MIT with expertise in energy technology, policy, and innovation. More »


Jim Pierobon helps trade associations/NGOs, government agencies and companies communicate about cleaner energy solutions. More »


Geoffrey Styles is Managing Director of GSW Strategy Group, LLC and an award-winning blogger. More »


Featured Contributors

Rod Adams

Scott Edward Anderson

Charles Barton

Barry Brook

Steven Cohen

Dick DeBlasio

Senator Pete Domenici

Simon Donner

Big Gav

Michael Giberson

Kirsty Gogan

James Greenberger

Lou Grinzo

Jesse Grossman

Tyler Hamilton

Christine Hertzog

David Hone

Gary Hunt

Jesse Jenkins

Sonita Lontoh

Rebecca Lutzy

Jesse Parent

Jim Pierobon

Vicky Portwain

Willem Post

Tom Raftery

Joseph Romm

Robert Stavins

Robert Stowe

Geoffrey Styles

Alex Trembath

Gernot Wagner

Dan Yurman

 

 

 

Follow Us

32-linkedin 32-facebook 32-twitter 32-rss

Content for personal use only. Distribution prohibited. Republication in part or in whole is strictly prohibited. © All rights reserved Energy Central © 2018

Recent Comments

  • Bas Gresnigt on New Solar Capacity Exceeded All Other Fuel Sources Combined in 2017, Study Finds
  • Jarmo on Closing Nuclear Reactors in Ohio and Pennsylvania Will Thwart Climate Goals
  • Roger Arnold on Closing Nuclear Reactors in Ohio and Pennsylvania Will Thwart Climate Goals

Recent Posts

  • A Toolkit of Global Insights as China Builds Its Power Sector of the Future
  • $100 Oil Is Back On The Table
  • New Solar Capacity Exceeded All Other Fuel Sources Combined in 2017, Study Finds

Useful Pages

  • Terms of Use
  • Comments Policy
  • Privacy & Cookies
  • Help
  • About and Contact Us
Copyright © 2018 Energy Central. All Rights Reserved
This site uses cookies, for a number of reasons. By continuing to use this website you accept the use of cookies. Find out more.