Armed with nifty energy management software, thousands of Samsung lithium-ion batteries, and $56 million in outside financing, Green Charge Networks is looking to change the way companies pay for power.
If the issue sounds a little boring (yawn, utility bills), think about this: businesses spend billions of dollars on power — in some cases many millions more than they could — because of the ways many utilities charge companies for electricity.
Many utilities in the U.S. use pricing mechanisms known as demand pricing, which charges both for the amount of electricity used during the entire billing period, and for the largest amount of power used in any one-half hour during the billing period.
“A lot of the customers we have today are paying 50% or 60% of their electricity bills not for energy, but for power,” says Vic Shao, the chief executive of Green Charge Networks.
The $56 million that Green Charge raised from the energy project development firm K Road Power and investors including former Intel Capital head George Coelho, will be used to provide financing packages for companies to roll out Green Charge Networks’ energy management storage equipment and services.
The company sells an energy storage device and an energy management software that smooths electricity usage throughout the day. Decreasing the amount of power a company draws from the electric grid reduces the overall costs they pay for power, cutting costs and also reducing strain on the grid for utilities.
In the past, this kind of energy storage system would have been too pricey for a company to buy, but with the financing packages that Green Charge Networks is rolling out, installing these power management technologies is as easy as installing residential solar under the contracting model popularized by Solar City.
Just as solar leases and PPAs were largely responsible for the tenfold growth in the solar industry over the past seven years, Green Charge Networks posits that its new financing will allow the company to do the same by enabling customers from coast to coast to install energy storage with zero money down, according to Shao.
The secret sauce for the company is its software that allows Green Charge Networks to predict where loads are going, the software then manages the charging and discharging of its battery system based on how much energy is being pulled off the grid.
The Santa Clara, Calif.-based company was founded in 2009 and initially backed by Richard Lowenthal, who also launched the electric vehicle charging station technology and services provider, ChargePoint.
Part of the impetus behind Green Charge Networks was finding a way to reduce the cost for ChargePoint customers who use Chargepoint’s technology and services to charge electric vehicles, according to Shao.
Since its launch, Green Charge has deployed pilot projects in New York with ConEdison and rolled out systems in grids run by Pacific Gas & Electric, Southern California Edison, and Silicon Valley Power.
Green Charge Networks’ systems are rated for both indoor and outdoor use. A single module stores 30 kilowatts, but the modular systems can be combined to store more energy. A typical installation is under half a megawatt, according to Shao.
“Batteries cost a lot of money, but software doesn’t,” says Shao. “We use the software to reduce the size of the batteries and have the maximum economic benefit.”