The Energy storage sector saw a 300% YoY increase in funding dollars from $1.1B (2015) to $3.3B (2016). Late-stage funding saw a sharp spike, attracting $1.6B in 2016 – a 375% increase from $336M in 2015.
2016 saw some high-value investments including $700M in Swiss grid-scale energy storage solution provider, Alevo in March and a $450M Series G investment in BYD by Samsung to improve and scale up its battery manufacturing in July. SmallVille Financial Advisor invested $133M in a Series B investment round in BAK Battery in October and Envision Energy led a $85M Series D investment in Sonnen in October.
Energy storage systems, comprising both grid storage and behind-the-meter storage units received the highest funding of almost $1.8B this year, with grid storage receiving the highest funding $1.2B and integrated providers with $525M. 2016 saw the rise of large and small scale energy storage players with commercial products in the market.
There has been a massive spike in investments for Behind-the-meter energy storage solutions. Funding for this business model rose from $27M in 2015 to almost $100M in 2016 – almost a four-fold rise on YoY basis. Behind-the-meter storage solutions are gaining focus due to rise in the number of distributed power solutions, an energy storage unit coupled with rooftop solar solutions effectively allows the user complete autonomy in terms of energy usage. Due to declining costs of lithium based batteries, owning an energy storage system at home it is becoming increasingly favourable. Consumers can harness and store the extra power generated during the day from solar panels to be used at night or during evening peak – effectively flat lining the power demand curve. Energy storage systems as a whole received the highest amount of investments in 2016, amounting to nearly $1.8B.
Another sector which has noticed a funding updraft is wireless charging, that received around $115M of funding due to increased focus on wireless charging infrastructure. With rumours of Apple including wireless charging in their mobile phones after debuting them in the Airpods, wireless charging is being touted to be a game-changer. Even in terms of charging of electric vehicles, the interest has been renewed due to availability and improvement of infrastructure to charge EVs at near similar speeds as plug-in charging.
There have been a total of 12 acquisitions in 2016, with a major focus on batteries of various types. Most of these companies are manufacturers of batteries using lithium-ion chemistry with Saft being the highest value acquisition by Total in May 2016 for $1B. One company filed for IPO in 2016, Alelion Energy Systems in June 2016.
Energy Storage business is still primarily a research driven business due to which we have seen a lot of investments by the US DoE. Only Government funding amounts to 50 in number by the DOE, ARPA and NYSERDA. Apart from them, the other Venture investors are Intel Capital, Climate-KIC, Conduit Ventures, In-Q-Tel, Khosla Ventures, KPCB, etc.
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