Lunar Energy enters the rooftop solar and battery storage market

Kunal Jerotra is the former head of Tesla’s residential energy business. Now he’s out on his own and heads up a new company called Lunar Energy that promises a “comprehensive home battery system” that eliminates the confusion of dealing with one company for your rooftop solar system, another for your residential storage battery, and possibly a third company to make the two systems work well with each other. He says Lunar Energy’s mission is to “transform homes to 100 percent clean energy.”

Gerota must be onto something. The company has just completed two investment rounds totaling $300 million led by the leading US residential solar company sunron and South Korean battery giant SK Group. Other investors include Japanese trading conglomerate Itocho and automaker Honda, both of which have taken minority stakes in the company. The stake comes as part of Lunar Energy’s acquisition of Moixa, a UK-based software company that operates a fleet of 35,000 residential battery systems in Japan, according to Canary Media.

Girotra says Lunar Energy has employed about 250 employees and has completed a 35,000-square-foot manufacturing facility in Mountain View. Its first product would be “a combination of battery modules, power electronics, and software, all designed from the ground up,” rather than the common bundled systems of today that combine “this component from this company, this component from that company.” Lunar Energy expects to begin marketing the integrated platform by the end of this year.

“There are competitors in this area,” says Girotra. “But the home battery systems market remains an expensive proposition for homeowners,” with costs increasing due to the complexity of the market. “There are a lot of boxes on the wall, they aren’t built in, they come from different manufacturers.”

Solar Energy System and Residential Lunar Energy Storage

This mix-and-match system can confuse homeowners and installers. It is not always clear which combination of systems is best suited to provide backup power during a grid outage, or how much electricity batteries need to be stored to keep different combinations of household loads running over long periods of time.

Nor is it always clear which vendor is responsible for managing the interaction between solar energy, battery storage capacity, and household loads. Managing these tasks is essential to maximizing the savings homeowners expect and allowing them to earn money by making their battery capacity available to power or utility market grid service programs.

Lunar Energy hopes to win over customers and partners by “designing an architecture that is extremely easy to install, looks compact and elegant in your home, and does network interaction and micro-grid formation in a very seamless way,” Girotra said. Tesla has promised pretty much the same thing for years, with only limited success, illustrating the complexity of the challenges.

Dan Fin Foley, energy transmission and storage expert at PA Consulting, says: Canary MediaYou can make a compelling argument that the majority of residential storage units on the network today have no economic reason to exist. A large proportion of these storage systems purchased by early users were more emotional decisions. They were driven by the “wonder factor,” or spending money on factors Cashless like using your own solar power or having clean backup power.”

He says the situation is “changing dramatically”. The cost of solar power and batteries continued to fall, although supply chain constraints slowed the downward trend significantly. However, virtual power plants made up of many homes with solar energy, batteries, smart thermostats, chargers, and devices for online controlled electric vehicles are beginning to offer value to utilities and customers alike.

“To truly be a smart home provider, not just the controls for the entire smart home but at the network level, the main barrier is software,” Finn-Foley said. Girotra says Lunar Energy has developed its own software “to do things like keep the battery secure, control fallout on and off the grid, or connect from solar to battery.” He added that for most of the remaining software functions, Lunar Energy will benefit from the Moixa GridShare programme.

Simon Daniel founded Moixa and is now Senior Vice President of Special Projects at Lunar Energy. He says, “Once the battery sends data to the cloud, that data is represented in the consumer mobile app and in the installer’s install app, and also … bundled with thousands of other batteries in the cloud platform and should make them smart decisions for the home” using a set of algorithms Machine learning that it claims gives Lunar Energy a major competitive advantage over other companies offering similar systems.

Moixa’s experience managing batteries, appliances and electric vehicle chargers in the UK and Japan includes managing 35,000 homes, accumulating 3,330 megawatt-hours, one of the largest of its kind, in partnership with Itochu and Tokyo Electric Power. “The platform is scalable and transferable from one geographical area to another,” Daniel says.

Lunar power vs competition

Some competitors have taken the inward path of integrating rooftop solar and battery storage. Generac, the leading US manufacturer of standby generators, has acquired companies to supply its own batteries, home energy management and grid collection software, and its smart thermostats. Enphase has built its battery systems and network service offerings around its core micro-inverter products.

Tesla operates its own virtual power plants in California, but is partnering with utilities using other software vendors for VPP implementations in Vermont and Australia. Span, a smart electric panel startup founded by other Tesla alumni, has formed partnerships with LG Energy Solutions, Tesla, SolarEdge and Sunrun, and is integrating electric vehicle chargers into its system.

“I am excited to see Sunrun, and the industry as a whole, begin delivering Lunar Energy solutions to millions of homes across the country,” says Lynn Jurich, Sunrun’s co-CEO. She is also the chair of the board of directors for Lunar Energy. Sunrun does not manufacture its own battery systems but partners with a variety of technology providers as it seeks to expand beyond rooftop solar to more comprehensive home grid and energy services and has been selected by Ford as its battery manufacturing partner in F-150 Lightning Serves as a backup generator for homes and small businesses.

golden opportunity

Girotra acknowledged the challenges Lunar Energy would face in ramping up manufacturing and reaching competitive price points. “We don’t think the product would be successful if it wasn’t widely rolled out,” he says, adding that there is a good deal of potential for more pre-sale product integration in order to “take costs out of the product portfolio by bringing things together and eliminating rather than duplicating.”

Of the approximately 75 million single-family homes in the United States today, only about 2.7 million have rooftop solar and far fewer of those have battery storage. With the addition of more rooftop systems, batteries will play an important role in storing their output in the middle of the day and discharging them when there is a shortage of supply — something solar-rich states like Hawaii and California are already trying to encourage through price structures and incentives. “If every home is going to have an electric car, solar panels and home batteries, and the house goes electric, the opportunity is huge,” Gerotta said.

 

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