Out Of The Box: Bloom Energy Debuts 'Electrons' Financing Service

In a move that could be torn from the playbook of SolarCity, Bloom Energy introduced a financing service today called Bloom Electrons that could popularize its solid oxide fuel cells, and make clean energy more accessible to the owners and operators of commercial and institutional buildings.

Through Bloom Electrons, power-consumers commit to a 10-year contract and set rate for fuel — for now, that means natural gas provided by California-based Bloom partners including PG&E. Then, Bloom Energy installs their system (the Bloom Box, a.k.a. energy server) on the customer’s site, though the customer doesn’t pay for it up-front.

The Bloom Box was designed for use in commercial and institutional buildings or campuses that need uninterrupted, 24-7 power. It can generate power from a variety of fuels, including natural gas and biogases.

Bloom Energy collaborated with Credit Suisse and Silicon Valley Bank to arrange the new financing service. Its introduction led to the sale of 200 new Bloom systems, and deals with: the California Institute of Technology (Caltech), and medical companies Becton, Dickinson & Co., and Kaiser Permanente. The financing option also helped Bloom Energy expand its business with earlier customers: Walmart, Coca-Cola, and Staples.

A vice president of business development with Bloom, Josh Richman, told TechCrunch on Thursday that while Bloom’s products and services are only used in California today, “We’re doing analysis on other markets. The energy challenge is global. The whole world needs more and cleaner energy.”

The offer of financing options to customers resembles power purchase agreement deals in the solar industry, but was inspired in part by the spread of cell phones in the developing world, Richman said:

“Mobile phones became ubiquitous…when people could pay by the minute, not when they could buy the phone. That’s what this opportunity represents. Customers can pay for the energy they use, not the equipment, if they don’t have the capital to dedicate to it up-front.” The company does not disclose the cost of its systems and services.”

Recently, Eric Wesoff, writing for Green Tech Media, speculated that a Bloom Box of the 100-kilowatt solid oxide fuel cell (SOFC) variety that’s covered by a warranty, would typically cost about $700,000, and would produce energy at about $12.50 per watt, a bit less if subsidised. That hardly sounds affordable.

Other Bloom skeptics appearing on CBS’s 60 Minutes, and writing for Forbes have suggested the business could only succeed in making clean energy accessible and pervasive, if its boxes prove durable, and the company lowers the price per unit.

Bloom Energy’s Richman would not address speculative reports including the three aforementioned. He pointed out, however, that a dollar-per-watt analysis is more effective in comparing similar technologies, CIGS to silicone solar modules for example, versus fuel cells to solar or wind products in applications within commercial buildings.

Electricity companies charge customers on a cents-per-kilowatt-hour basis. By that measure, the company claims the Bloom Box produces electricity which is cheaper than electricity prices from utilities in California.

Richman said:

“[Bloom’s energy servers] produce five to ten times the power of other systems that operate 100 percent of the day…And they take hours or days to install, instead of weeks to months. Companies who have already purchased Bloom Boxes on a capital up-front basis will recoup their costs between three and six years from the date of installation.”

Buyers of Bloom Boxes included: eBay, Adobe, Coca Cola, FedEx and Bank of America among others. The time required to install either a wind or solar power system appropriate for a commercial building or campus can range into months, according to several recent examples.

Bloom is now producing one energy server a day, versus the one-a-month rate of production just two years ago. Is this all enough to make the Bloom Box go viral?