A battery from Stem to help building owners lower electricity bills.
Photo courtesy of Stem.

Batteries combined with software are being used to lower electricity bills for building owners.

By Katie Fehrenbacher
August 13, 2015

Silicon Valley battery startup Stem has raised $45 million from investors including the energy trading arm of big German power company RWE Group. Stem started raising the round earlier this year and had already brought in $12 million from Japanese conglomerate Mitsui.

Stem uses software and banks of lithium-ion batteries to manage energy in buildings to save on electricity costs. During times when electricity from the power grid is expensive, software switches the buildings to run on battery power. The batteries charge up when electricity rates are low, or from rooftop solar panels.

Stem installs its systems for its customers for low or no money down, and then can take a cut of the monthly savings. Clients include the hotel chain Extended Stay America and super markets Whole Foods and Safeway.

Stem's battery banks use data from the building, utility and other sources to move the building on and off of battery power.
Photo courtesy of Stem.

The key to Stem’s system is algorithms that use data from local utilities, building operations, and from a variety of other sources to quickly shift buildings from battery to grid power. Lithium-ion batteries can provide short bursts of power, to meet the demand.

Moving buildings on and off battery power can also help utilities stabilize the grid. When there’s too much demand for electricity like during a hot summer afternoon, the batteries can take some of strain off the grid. Batteries can also help utilities avoid building new power plants by reducing demand during peak times.

Stem has deals with utilities Southern California Edison, Hawaiian Electric and Sacramento Municipal Utility District.

Stem is among a handful of Silicon Valley startups and big companies that are using lithium-ion batteries and software to sell battery systems to both commercial and industrial building owners as well as to utilities. Other companies include Tesla, AES Energy Storage, Greensmith, Green Charge Networks, Advanced Microgrid Solutions, and GE.

 

Lithium-ion batteries are finally starting to become cheap enough to provide a cost effective source of energy storage for the power grid. For years, utilities and off-grid building owners have used lead acid batteries (like the kind that starts your car) for energy storage. But these batteries lack the necessary power and energy density, and don’t last very long. Lithium-ion batteries are now replacing these lead acid batteries.

Other investors in Stem include the Angeleno Group, power company Iberdrola, GE Ventures, Constellation New Energy and Total Energy Ventures. The company was founded in 2009 as Powergetics and rebranded as Stem in 2012.

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