How to Break Into The Energy Storage Market

1Executive Summary

Policy makers, entrepreneurs, investors, automakers and others are paying increasing attention to long-overlooked energy storage technology, and they’re pouring billions of dollars into the sector in hopes of snagging a piece of the market as it develops. But for startups looking to break into energy storage tech, key opportunities may lie outside capital-intensive development and manufacturing of large-scale energy storage devices, batteries and components.

In recent interviews, an energy investor and the CEO of a battery startup that opted out of applying for government assistance (an unusual choice these days) noted two routes for startups to break into energy storage with relative speed and low capital requirements: (1) sell peripherals to the emerging market, or (2) sell energy storage tech to existing markets (electronics, power tools and lawn equipment, for example) as a stepping stone to business in the emerging vehicle and smart grid markets.

“We’ve been looking at the energy storage space for quite a few years,” Peter Wagner, a venture capitalist with Accel Partners, told me last week. While his team is excited about the opportunity, Wagner says they haven’t seen a play close enough to large-scale deployment to convince them the timing is right for venture capital. So, while Accel isn’t abandoning the idea of investing in the actual hardware and chemistry for energy storage, the firm is keenly interested in software and services related to that technology.

Right now, we’re experiencing an uptick in innovation and funding in the area of adding bulk storage to the grid, and in the next 3-5 years, many automakers are planning to deploy battery electric vehicles for the mass market. These open possibilities for the kind of entrepreneurship that’s right in Silicon Valley’s wheelhouse.

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