SunEdison announced today that it had purchased an energy storage project from Solar Grid. Solar Grid was a two year old startup company that focused on storing energy, but struggled to raise money for its expensive projects. After failing to find funding from big banks, SunEdison stepped in and paid an undisclosed amount to acquire assets.
SunEdison venturing into new storage arena
SunEdison primarily sells solar power components and accessories, but with the purchase of Solar Grid, the company is effectively entering into a new arena of energy storage. Solar Grid had four completed projects on the East Coast of US and with SunEdison’s capital, the company will continue to develop the technology to store solar power. SunEdison hopes to use the energy storage initiative to sell to municipalities, corporate entities, etc in the US and Europe. In addition to solar energy storage, SunEdison now has battery storage and wind energy storage projects, to help diversify its renewable energy storage sources.
California leads energy storage initiative
In 2013, California government approved a mandate, which details that the three top utilities in the state must buy 1,325 megawatts of energy storage by 2020. Energy storage developers such as SunEdison, would have until 2024 to complete their projects. Essentially, California is saying that utilities need to start getting ready for a heavier use of energy storage from renewable sources. This will allow California to have energy on-demand and would help save money over the long term. This is certainly a great opportunity for companies such as SunEdison, which then would have a consistent income source from selling energy from its storage services to utility providers across California.
Overall, renewable energy storage is still a very relatively new concept, which is why big banks would not provide funding to Solar Grid. The industry is simply too new and there is not enough data points to pull from for banks to feel comfortable with the loan risk. However, with laws such as California’s energy storage mandate, SunEdison’s move into energy storage sure does look like a good bet, as it hopes the trend will catch on with other States and across Europe. With limited competition, SunEdison certainly sits in a comfortable position at the moment, but now it must develop and streamline the service and product to attract customers.