Starwood Energy allocates $100mm to energy storage firm STEM

Stem, a firm focused on software-driven energy storage, has announced that its project financing pool now exceeds US$350 million with the addition of up to US$100 million in new financing from investment affiliates of Starwood Energy Group Global, LLC, a private investment firm focused on energy infrastructure.

Stem created the energy storage project financing model in 2013 and has now more than 75 MWh of projects deployed or under contract across more than 480 locations across the United States. Third-party financing enables companies such as Safeway, Wells Fargo, and Adobe to subscribe to Stem’s award-winning storage-as-a-service solution with no upfront costs for equipment or installation. Customers immediately benefit from intelligent storage that automatically reduces energy use during peak demand times, lowers monthly electricity bills by up to 20 percent, and provides a revenue stream from services that help balance the electric grid.

Stem offers storage-as-a-service to reduce electricity costs and aggregates energy stored in its fleet of systems to provide grid services as clean, reliable and instantaneous capacity to utilities and grid operators. Stem currently provides grid services to Southern California Edison, Hawaiian Electric, and the California Independent System Operator (CAISO).

Patrick Verdonck, a Principal with Starwood Energy, stated:

“The Stem financing is an attractive investment that facilitates lower energy storage costs and wider adoption of clean energy solutions—a win/win for our investors, Stem’s customers and the environment.”

According to a recent report from GTM Research, the U.S. market for behind-the-meter energy storage grew more than 400 percent in 2015. By 2021, this sector is expected to account for up to 49 percent of the total energy storage market. Stem is estimated to have more than 50 percent market share based on GTM Research.

John Carrington, CEO of Stem, commented:

“This financing vehicle gives our customers access to capital and allows them to achieve the benefits of intelligent energy storage without making a major investment. Support from Starwood Energy helps solidify Stem’s position as a well-financed, industry leader in providing intelligent energy storage solutions.”

Stem’s primary project financing comes from Generate Capital, a specialty finance company pioneering Infrastructure-as-a-Service^TM to catalyze the Resource Revolution. Generate’s work with Stem brings a version of the solar financing model to energy storage, supporting its mission to rebuild energy systems using high-impact, proven technology solutions. Other project financing is also provided by Clean Feet Investors.