While electric vehicles (EVs) garner significant attention, stationary batteries are currently taking center stage, attracting considerable investment in the U.S.
One notable startup, Lunar Energy, exemplifies this trend. Established six years ago, this company specializes in manufacturing battery packs for residential customers in California, Georgia, and Washington. Recently, Lunar announced the successful completion of two substantial funding rounds, securing an unreported $130 million in a Series C round and an additional $102 million in a Series D round. The Series C was led by Activate Capital, while B Capital and Prelude Ventures spearheaded the Series D.
Lunar Energy intends to leverage these funds to scale its manufacturing efforts to produce 20,000 units by the end of this year, with aspirations to increase this figure to 100,000 units by the close of 2028. To date, Lunar has successfully raised over $500 million from various investors.
As stationary storage solutions gain prominence, they present a silver lining for battery manufacturers who have faced significant policy shifts following the substantial rollbacks of the Inflation Reduction Act under the Trump administration and a GOP-majority Congress, which previously incentivized domestic battery manufacturing for the automotive sector.
In light of the growing demands on the electrical grid due to an increasingly electrified economy and a surge in data center requirements, grid-connected batteries have emerged as a crucial strategy to enhance grid resilience.
Lunar Energy utilizes its fleet of batteries, offered in 5 kilowatt-hour modules with capacities ranging from 15 to 30 kilowatt-hours, to supply power to the grid during peak demand. Additionally, its virtual power plant (VPP) software enables the management of EV chargers and household appliances, providing both power supply and demand regulation.
These VPPs are anticipated to replace expensive and environmentally detrimental peaking power plants in the near future.
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Competition in the energy storage sector has intensified recently. In October, Base Power secured $1 billion, following a $200 million fundraising round for its residential battery-based VPP. Tesla is also active in this domain with its Powerwall-based VPP.
Beyond residential applications, Tesla’s storage division has expanded rapidly, while former Tesla executive JB Straubel has introduced his own energy storage solutions with Redwood Materials. Even Ford has expressed interest in entering this market.
In just five years, batteries have transitioned from minor players to essential components of the electrical grid. Their modular design facilitates quick construction and deployment, and although they remain more expensive than some fossil fuel options, costs continue to decline at a rapid pace. This has led to a surge in investor interest.
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