Forget about EVs. Stationary batteries have recently become a hot topic in the United States and are attracting investment.
Startup Lunar Energy is the latest example. The six-year-old company, which makes battery packs for homeowners in California, Georgia and Washington, announced Wednesday that it has closed two large funding rounds. The startup shared that it has raised $130 million in unannounced Series C and $102 million in Series D. The Series C was led by Activate Capital and the Series D was led by B Capital and Prelude Ventures.
The startup plans to use the funding to expand production to 20,000 units by the end of this year and 100,000 units by the end of 2028. In total, Lunar has raised more than $500 million from investors.
Stationary storage is a bright spot for battery makers, which have been exposed to policy whiplash after the Trump administration and Republican-controlled Congress gutted much of the anti-inflation law that encouraged companies to make batteries in the U.S. to supply the auto industry.
As data center demand soars and power grids strain under the weight of an increasingly electrified economy, grid-connected batteries have become one of the most versatile ways to increase resiliency.
Lunar can call upon its battery fleet, which comes in 5-kilowatt-hour modules ranging from 15 kilowatt-hours to 30 kilowatt-hours, to provide power to the grid as needed. The company’s virtual power plant (VPP) software can also control EV chargers and home appliances, allowing it to supply electrons while reducing demand.
It is hoped that such VPPs could replace expensive and polluting peaking power plants within a few years.
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Competition in this field has recently increased. In October, Base Power raised $1 billion, less than six months after raising $200 million for its home battery-based VPP. Tesla also operates its own Powerwall-based VPP.
Outside of the residential environment, Tesla’s storage business is growing by leaps and bounds, with former Tesla executive JB Strobel’s startup Redwood Materials launching its own energy storage division. Ford wants to get in on the action, too.
Batteries have gone from being bit players to being a major asset on the power grid just five years ago. Because they are modular, they are easy to build and deploy quickly, and while they are still expensive compared to some fossil fuel power sources, prices are falling rapidly. No wonder investors are rushing in.
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