The fledgling energy storage industry is rapidly gaining momentum in the domestic as well as the international markets. Realizing the importance of energy storage, an increasing number of players are now entering the sector. The global battery storage sector attracted corporate funding worth $299 million in 12 deals during the first quarter (Q1) of 2018. This was a considerable leap when compared to the $154 million raised in six deals in the preceding quarter of Q4 2017.
Approximately $80 million was raised in 10 deals in Q1 2017, making Q1 of 2018 a remarkable quarter for the sector in a year-over-year (YoY) comparison.
The findings were revealed in Mercom Capital Group’s newly released report on battery storage, smart grid, and efficiency.
Venture capital (VC) funding (including private equity and corporate venture capital) raised by battery storage companies in Q1 2018 jumped to $299 million in 12 deals from $151 million in five deals in Q4 2017 due to some large deals in the quarter. Year-over-year, the funding was significantly higher compared to the $58 million raised in eight deals in Q1 2017.
Corporate funding in energy efficiency came to $104 million in Q1 2018 in five deals compared to $916 million in 14 deals in Q4 2017. In a YoY comparison, $514 million was raised in 17 deals in Q1 2017.
VC funding raised by energy efficiency companies in Q1 2018 remained steady at $98 million in four deals compared to $95 million in 10 deals in Q4 2017. However, if we compare the figures YoY, the Q1 of 2018 failed to catch up with the $213 million raised in 14 deals in Q1 2017.
Debt and public market financing for efficiency companies fell to $6 million in one deal this quarter compared to $621 million in three deals in Q4 2017.
Corporate funding in smart grid companies came to $1.3 billion in nine deals compared to the preceding quarter in which $796 million was raised. In a YoY comparison, $164 million was raised in 14 deals in Q1 2017.
VC funding for smart grid companies increased 79 percent in Q1 2018 with $75 million in seven deals compared to $42 million in nine deals in Q4 2017. In a YoY comparison, in Q1 2017 $164 million was raised in 14 deals.
One notable VC funded smart grid deal was an Indian company Husk Power Systems receiving an equity investment of $20 million to expand its renewable mini-grid business in Africa and Asia. Husk Power Systems was founded in 2008 and kickstarted the much-needed rural electrification in India’s energy deficient state of Bihar through off-grid power generation and distribution solution.
India is on the cusp of a revolution in energy storage, according to key industry players. At the recently-held 5th Energy Storage India Conference held in New Delhi, the overall mood of the industry was optimistic of a coming boom in the country’s battery energy storage market.
The Minister for Power, R.K. Singh, recently chaired a meeting with battery manufacturers in New Delhi to discuss the creation of an ecosystem for incentivizing battery manufacturing in India. Singh encouraged the industry to set up battery manufacturing units in India as future demand is going to be very high largely due to the government’s promotion of the deployment of electric vehicles (EVs) across the country.
Learn more about Mercom’s comprehensive report and download a free executive summary by visiting: http://bit.ly/MercomSGQ12018