In this year like no other, solar, storage and cleantech investors are finding reasons for optimism — driven, in part, by an incoming Biden administration aiming to enact a $2 trillion climate plan.

Here’s a rundown of these year-end investments.

Investments in solar software and CSP
$50 million for solar software: It took a pandemic, but the U.S. residential solar (and storage) industry has finally figured out how to lower customer acquisition costs — move everything online. Aurora Solar, a SaaS startup developing software that enables solar installers and financiers to design and sell residential solar remotely, raised $50 million in a Series B led by Iconiq Growth, along with existing investors Energize Ventures, Fifth Wall, and Pear VC. This brings the company’s total investment to over $70 million. Aurora is aiming to shift the solar industry from manual and in-person processes — to doing everything online. Aurora’s software lets solar installers perform remote solar shading analysis, design solar and storage rooftop systems, forecast energy generation, calculate savings, and produce sales proposals with financing choices. BloombergNEF is confident that Americans will install a record 3 GW of solar on their homes this year and 3.6 GW will be installed in 2021. Other solar software investments this year included Terabase Energy and Station A.

$39 million for next-gen concentrated solar power: Bill Gross’s CSP startup Heliogen received $39 million, to “develop, build, and operate a supercritical carbon dioxide power cycle integrated with thermal energy storage, heated by concentrated solar thermal energy supplied by a newly built heliostat field,” according to the DOE website. Heliogen’s proposed CSP plant uses sCO2 — essentially, CO2 halfway between gas and fluid — instead of steam to generate power. Since 2007, the DOE has provided about $575 million in support for CSP research. Heliogen is backed by Bill Gates, Steve Case and cancer drug entrepreneur Patrick Soon-Shiong. (reporting by K Kaufmann)

247Solar, an MIT-spinoff, and microturbine maker Capstone Turbine tested a commercial turbine that can generate electricity using hot air at atmospheric pressure, without combustion — made possible by a heat exchanger using a nickel-chromium-aluminum-iron alloy engineered for operation at very high temperatures. The plant is driven by a CSP system that heats air to a high-enough temperature to drive the turbine to produce electricity. According to the company, the hot-air-driven Brayton Cycle system “operates at atmospheric pressure and requires no steam, molten salts, or heat transfer oils.” The system stores up to 20 hours of energy as heat, using ceramic pellets instead of molten salts. Source: 247Solar

Investing across the energy storage value stack
Li-Cycle, the largest lithium-ion battery recycler in North America, closed a Series C funding round led by Moore Strategic Ventures to fund development of its Rochester, New York hub. Terms were not disclosed. Li-Cycle CEO Ajay Kochhar said, “Without sustainable and economically viable lithium-ion battery recycling, we believe it’s likely that electric vehicle proliferation will be substantially hindered.” Li-Cycle claims that its recycling process enables recoveries of at least 95% of all materials found in lithium-ion batteries, compared to the industry norm of less than 50%.

The UK Department for Business, Energy and Industrial Strategy (BEIS) has approved the construction of the biggest battery storage project in the UK, and one of the largest such projects in the world, the company developing the site said on Monday.

InterGen, an energy company headquartered in Edinburgh, has received the green light to build the US$267 million (£200 million) project in southern England. The project is expected to provide at least 320MW/640MWh of capacity, with the potential to expand to 1.3GWh – more than ten times the size of the largest battery currently in operation in the UK and set to be one of the world’s largest, InterGen said.

The battery storage project, which will be built at DP World London Gateway on the Thames Estuary, dwarfs any similar projects currently in operation in the UK, with the largest operational project currently at 75MWh.

“It is also likely to be one of the biggest batteries anywhere in the world,” InterGen said.

Construction on the Gateway project is expected to start in 2022 and become operational in 2024.

InterGen is also exploring the option to develop another large battery project at its site in Spalding, Lincolnshire, which would be 175MW / 350MWh. The planning permissions are already in place for the project in Lincolnshire in east England.

Battery storage will be essential to the UK’s net-zero ambitions and its target to become a global leader in offshore wind energy, powering every home in the country with wind energy by 2030, as Prime Minister Boris Johnson said in early October.

Battery storage will also be crucial to advancing renewable energy in other parts of the world. Earlier this month, French company Neoen said that it would build an even bigger, 300-MW/450-MWh, battery storage system in Australia, in partnership with Tesla. The Victorian Big Battery in Australia, one of the world’s largest batteries, will be delivered together with Tesla and network partner AusNet Services.

The fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park will, upon its completion, have the largest energy storage capacity in the world of 15 hours.

The fourth phase will be operational in stages starting from Q3 2021, and will provide clean energy for 320,000 residences, and will reduce 1.6 million tonnes of carbon emissions a year.

The mega solar park is being built by the Dubai Electricity and Water Authority (DEWA).

The 950MW fourth phase is the largest investment project in the world that combines Concentrated Solar Power (CSP) and photovoltaic solar power with investments totalling Dhs15.78bn based on the independent power producer (IPP) model.

It uses three hybrid technologies to produce clean energy: 600MW from a parabolic basin complex (three units of 200MW each), 100MW from a solar power tower (based on Molten Salt technology), and 250MW from photovoltaic solar panels, according to the Dubai Media Office.

A consortium led by DEWA and ACWA Power formed a project company, Noor Energy 1, to design, build, and operate the plant.

DEWA owns 51 per cent of the company, while ACWA Power holds 25 per cent, and the Silk Road Fund owns 24 per cent.

The Biden Administration is coming. President-elect Joe Biden is picking his team and getting ready to hit the ground running whenever the current president allows for the peaceful transition of power.

But Georgia’s two Democratic senate candidates will need to win their runoff elections in January to give their party 50 seats in the U.S. Senate, which would then allow Vice President-elect Kamala Harris to break tie votes on key legislative efforts. Even if this split Senate is achieved, such a thin margin for passing votes means that bold action on climate change would require ironclad party discipline. 

Given those realities, energy storage industry advocates are looking at ways to embed friendly policies in must-pass legislation, such as bills to boost economic recovery from the coronavirus pandemic or build up the country’s infrastructure. They’re seeking relief from tariffs that have made battery projects more expensive, and procurement guidelines to boost storage deployments in federal buildings and projects. And they’re promoting the role of storage as a critical step in increasing the country’s share of renewable energy. Here’s an overview of how the storage industry plans to achieve those goals. 

The Arizona Corporation Commission has approved a pilot program for Arizona Public Service (APS) to offer incentives for residents to purchase energy storage battery systems in their homes next year.

Under the pilot program, the first of its kind in the state, homeowners could receive up to $2,500 for the purchase and installation of at-home energy storage devices that can capture electricity from the grid or rooftop solar and dispatch it for later use.

Commissioner Lea Márquez Peterson, who led the effort to advance the program, said she hopes a similar program can be offered by Tucson Electric Power. Eventually, small businesses, retail and commercial industries could be involved if the experiment proves successful.

APS, which worked with storage stakeholders and the utility commission to put together the pilot, must finalize all of the details before it officially kicks off next year.

To encourage homeowners to participate, the 3-year pilot program includes other benefits including:

• Customers who participate in the pilot will receive an increased incentive per household from $300 per kilowatt to $500 per kilowatt
• Grandfathered net metering rooftop solar customers will remain grandfathered if they install new energy storage devices under the program
• Energy storage currently a luxury item
• So far, energy storage battery systems are considered luxury items because of their high cost. A typical energy storage system ranges from $4,000 to $14,000 depending on the size and capacity.

“Typical batteries for a typical home are between 5 and 10 kilowatts and they’re still fairly pricey,” said Márquez Peterson. “So the ultimate decision homeowners will have to make is, is this something they’re willing to invest in–to be a first mover.”

The renewable energy investment and asset management company Low Carbon and Gore Street Energy Storage Fund has switched on what is considered to be the ‘largest’ energy storage project in Northern Ireland.

The battery storage project at Drumkee, County Tyrone, uses lithium-ion technology and has a capacity of 50MW.

In combination with one more project, which is anticipated to be energised in December, the work is expected to support Northern Ireland’s ambitious 2030 renewable energy targets.

Northern Ireland has a target for 70% renewable electricity by 2030.

Roy Bedlow, Chief Executive and Founder of Low Carbon, said: “Often overlooked, battery storage paves the way for a renewable-powered future.”

Alex O’Cinneide, Chief Executive Officer of Gore Street Capital, commented: “We are delighted to announce the energisation of Drumkee, the largest energy storage asset on the national electricity grid, an important milestone for local climate change goals.”

Most stocks with exposure to batteries, energy storage, or renewables have taken off this year. This is partly due to industry fundamentals – electric transport is growing like crazy – but it’s also influenced by the Tesla (TSLA) effect. Any stock that looks like Tesla has become a retail investor darling with hopes of getting rich quick.

That said, there are some companies that remain attractive opportunities and have yet to have future growth priced in. Eos Energy Enterprises (EOSE) is one of those companies. While it’s already run up 35% from its SPAC launch to $13.50 per share, it remains attractive through $15-20 in the short term. Traded warrants (NASDAQ:EOSEW) provide an opportunity for enhanced return via increased risk exposure.

Eos recently went public via a SPAC acquisition. B. Riley Principal Merger Corp. II (BMRG) acquired EOS for $176 million and a pro-forma market capitalization of approximately $500 million. Each unit of BMRG represented 1 share in the newly formed company and one half of a warrant, which are trading under the tickers EOSE and EOSEW, respectively.

Company Overview

Eos Energy Enterprises is a battery manufacturer. It has developed an alternative chemistry to the well-known and widely used Li-ion battery. Li-ion batteries have lots of advantages, which is why they have taken off everywhere from mobile phones and laptops to electric vehicles. Among commercially viable options, Li-ion batteries are currently the most energy dense, measured in kWh/kg or kWh/m³, which makes them especially suited for any application where portability is the priority. When it comes to transport, they can’t be beaten. In fact, much of Tesla’s capital investments have been to increase Li-ion battery capacity to support its growing vehicle fleet.

BYD “Build Your Dreams” announced it will partner with Canadian Solar to provide advanced battery technology for the 100-MW_AC Mustang solar plant in Kings County, California.

The 75-MW or 4-hour 300 MWh energy storage system is a retrofit addition to the Mustang solar plant, which was originally developed by Canadian Solar’s wholly owned subsidiary Recurrent Energy. The solar plant connected to the grid in August 2016 and the project’s equity stake was sold to Goldman Sachs in May 2019, the current owner of the project.

“We are excited to partner with Canadian Solar on this solution. We are very proud to be able to provide reliable and safe BYD technology to the Mustang project,” said BYD North America president Stella Li. “We will deliver the lithium-ion battery storage solution to Canadian Solar, who acts as the full system integrator of the storage retrofit.”

By pairing solar PV with advanced battery technology, Canadian Solar helps its customers to generate and store solar power during the day for use in the evening. This approach allows California’s power grid to absorb and integrate higher levels of reliable, safe and affordable renewable energy while contributing to the state’s climate mitigation efforts.

“We are pleased to start supplying this large-scale solar + energy storage project which will be fully developed and integrated by Canadian Solar with our proprietary battery technology. The adoption and integration of BYD’s batteries will improve the utilization of solar energy and meaningfully enlarge our global addressable market in the solar industry.”

For the Mustang project, BYD will utilize Cube Pro, the latest generation energy storage solution designed for larger utility-scale projects. At 2.5 MWh per unit, the Cube Pro has a new liquid-cool battery system in the enclosure, with an energy density increase of 80% compared to the previous generation that used customized shipping containers as the enclosure.

A battery storage site in Northern Ireland developed by Low Carbon and Gore Street Energy Storage Fund has been energised.

The lithium-ion project, located at Drumkee, County Tyrone, is being lauded as the country’s largest energy storage project and is to serve the Single Electricity Market. It was completed on time, the two companies said, despite the closure of the site for several weeks during the COVID-19 pandemic as well as social distancing measures being needed when the site reopened.

A second 50MW project – Mullavilly – is expected to be energised in December, with both projects to be commissioned and operational in Q1 2021.

NEC Energy Solutions was awarded EPC and long-term O&M contracts for the two projects in January 2020. Whilst NEC Energy Solutions has since announced its closure, it is continuing to deliver on its obligations to existing projects.

As part of the Irish portfolio, Low Carbon and Gore Street are also developing two 30MW projects in the Republic of Ireland, both of which have secured 6-year contracts in Ireland’s DS3 flexibility market. Gore Street acquired a controlling interest in the portfolio in 2019, with the two companies to jointly own and operate the assets.

Earlier this month, Gore Street announced it had signed an EPC and O&M contract with Fluence for one of the 30MW projects – Porterstown – and had also applied to triple its capacity in the Republic of Ireland, up to a total of 180MW.

As power markets decarbonize, there is still a need for dispatchable, peaking power plants. Currently, most of this need is met by fossil-fueled units, but there could be opportunities for battery storage.

In California this past August, rotating outages were implemented because of capacity shortages. During these events, over 50% of the power on the California ISO grid was coming from natural gas-fired plants.

Earlier this year, the California Public Utilities Commission ordered load serving entities in the state to procure 3,300 MW of new resources by the summer of 2023, and California’s State Water Resources Control Board granted a temporary exemption to regulatory deadlines that would have required 3,700 MW of natural gas-fired steam turbine units to retire or install alternate cooling systems that do not harm marine life. These actions were both designed to shore up system resource adequacy. New natural gas resources are not eligible to contract with load serving entities under the CPUC procurement order, but the S&P Global Market Intelligence Power Forecast indicates that new energy storage is more economical than natural gas-fired power plants, especially when it is co-located with solar.

Despite having a much higher reserve margin than CAISO, PJM Interconnection has multiple states with aggressive renewable portfolio standards, or RPS. For example: 50% of retail electricity sales in New Jersey need to be procured from qualifying renewable energy sources by 2030. However, renewable energy has not grown in PJM as quickly as CAISO. The market still generates over half of its electricity from resources that emit carbon when operating.One of the core sources of value for battery storage in CAISO is energy arbitrage, taking advantage of the duck curve by buying power during the day when prices are low because of ample solar generation and selling it later in the day when the sun sets and electricity demand is still high. The market for system resource adequacy capacity contracts also appears ready to support the entry of additional battery storage and hybrid solar-plus-battery storage resources. Even before the current shortfall, capacity prices for system resource adequacy were in a range that would allow generic battery storage and hybrid solar plus battery storage resources to fully recover their net cost of new entry, based on estimates from the S&P Global Market Intelligence Power Forecast.