In September, during a massive heat wave in California, the state sent out a text alert urging Californians to reduce their energy consumption that probably prevented blackouts across the state.
What if we didn’t have to?
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Solar, wind and other renewable energy startups have been slowly seeing more favor in venture funding, with startups in 2020 seeing $3.75 billion (per Crunchbase data). But 2022 has been a big year for renewable energy. Despite the economic slowdown, companies in the space have managed to raise around $7.6 billion.
Take Swell Energy. The California-based virtual power plant startup announced on Tuesday it raised $120 million led by the SoftBank Vision Fund 2 and Greenbacker Development Opportunities Fund I, bringing the company’s total funding to $582 million.
The residential energy company is developing a slew of virtual power plants through 26,000 energy storage systems scattered across U.S. businesses and homes. These virtual power plants provide grid capabilities in states like California and Hawaii to reduce reliance on fossil fuel plants. In the process, Swell can optimize energy resources and distribute it in real time based on need and who is using it.
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Funding in this space remained pretty static until around 2018, when the industry surpassed $2 billion for the first time. After that, funding only got bigger, peaking at $9.85 billion in 2021.
Renewable energy is becoming increasingly important for companies and homeowners in terms of reducing their carbon footprint and energy savings, and companies like Swell are taking note. For a while, renewable energy was laser-focused on large-scale energy consumption, working with public utilities and large venues. Now, startups in this space are focusing on acute use cases and distributing energy on a per-need basis.
This is important when we think about the climate and energy usage. Using energy storage solutions and sophisticated distributing technology, companies like Swell can prevent power outages — like the one that almost gripped California — from happening.
Illustration: Dom Guzman