A big round to grow solar-storage market share in the U.S. and Australia and the latest partnership between a grid edge startup and a European energy giant.
Sonnen, the German startup taking on Tesla and others in the nascent behind-the-meter energy storage market, has raised €60 million ($71 million) to grow in the U.S. and Australian markets. The company also inked a strategic cooperation agreement with its newest investor, Dutch energy giant Shell.
Shell Ventures led Tuesday’s investment, which brings sonnen’s total funding to date to roughly $180 million. That includes $85 million in 2016 from investors including GE Ventures, Germany’s eCapital and MVP, Dutch firm SET Ventures, and Czech company Inven Capital, as well as $3 million in 2013, $9.4 million in 2014, and $12 million in 2015.
The rising amounts of investment line up with sonnen’s growth expectations, CEO Christoph Ostermann said in a statement on Tuesday. The funding will go toward accelerating growth in the United States and Australia, its two primary markets, as well as “establishing new technologies such as energy sharing and our virtual battery pool,” CEO Christoph Ostermann said in Tuesday’s release.
It will also support a new “strategic cooperation agreement” with Shell New Energies, which will examine “innovative integrated energy propositions, enhanced EV charging solutions and the provision of grid services that are based on sonnen’s virtual battery pool.” The two companies did not reveal any projects they’re working on together.
Shell has been investing heavily in grid edge companies, either through equity stakes or outright acquisition. Earlier this month, Shell acquired GI Energy, a microgrid developer, and led a $7.5 million round in Axiom Exergy, a startup that’s built thermal energy storage systems that use refrigeration systems already in place at grocery stores and other commercial buildings.
These represent Shell’s fifth and sixth investments in companies working on the grid edge since the start of 2017. It’s part of a “grid edge shopping spree,” involving major European energy players such as Enel, Total, Engie and Centrica, GTM Grid Edge Research Manager Elta Kolo noted.
Sonnen has thousands of customers using its lithium-ion battery systems, most of them in Germany, where a combination of rising retail rates and falling solar feed-in tariffs created an economic case for storing and using a home’s solar power, rather than feeding it back to the grid.
In the U.S., sonnen is active in California, home of the most behind-the-meter batteries and solar-storage systems in the country, and in several other smaller markets.
But in October, sonnen launched its first “sonnen city” in the U.S. — 3,000 solar-battery equipped homes being built by Mandalay Homes in Jasper, Ariz. meant to serve not only as utility bill-shaving systems, but also as a “virtual power plant with a capacity of 23 megawatt-hours and output of 11.6 megawatts.”
Unlike most of the virtual power plant or distributed energy aggregation projects out there, sonnen’s isn’t backed by a utility contract or relationship. Sonnen launched its “sonnenCommunity” projects in Germany, working with retail energy providers to tap its customers’ aggregated battery capacity for money-making or cost-reducing purposes. As of last March, the company has been bidding this capacity into the grid operator ancillary services market.
In Australia, Sonnen has gone to market with its “sonnenFlat” offering — a promise to bring customers’ bills to zero, or at least close to it, by using their aggregated flexibility for money-making services and paying each customer their share of the profits.
As of March, about one-third of Sonnen’s roughly 17,000 customers were participating in sonnenCommunity, Benjamin Schott, sonnen’s director of business innovation, told Greentech Media.
Sonnen isn’t limiting itself to just one big European energy partner. Last month it landed a project with Engie, the French energy and water giant, to offer solar-storage systems in the French market. And last year it announced plans to work with solar installers to bring 20,000 storage systems to Italy over the next 24 months.