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Lunar Energy Enters Rooftop Solar & Battery Storage Market

Kunal Girotra is the former head of the Tesla’s residential energy business. Now he is off on his own and heading a new company called Lunar Energy that promises an ​“end-to-end 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 play nice with each other. He says the mission of Lunar Energy is to “transform homes to 100 percent clean energy.”

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

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

“There are competitors in this space,” Girotra says. “But the home battery system market is still an expensive proposition for homeowners,” with costs compounded by the market’s complexity. ​“There are a lot of boxes on the wall, they’re not integrated, they come from different manufacturers.”

Lunar Energy Residential Solar & Storage System

This mix-and-match ecosystem can confuse homeowners and installers. It’s not always clear which combination of systems is best suited to provide backup power during grid outages, or how much electricity batteries need to store to keep different combinations of home loads running over extended periods of time.

Nor is it always clear which vendor is in charge of managing the interplay of solar power, battery storage capacity, and household loads. Managing those tasks is necessary to maximize the savings homeowners expect and to allow them to earn money by making their battery’s capacity available to utility or energy market grid services programs.

Lunar Energy hopes to win over customers and partners by ​“designing architecture that will be super easy to install, looks compact and elegant in your home, and does grid interaction and microgrid formation in a very seamless manner,” Girotra said. Tesla has been promising much the same thing for years, with only limited success, which illustrates how complex the challenges can be.

Dan Finn-Foley, an energy transition and storage expert for PA Consulting, tells Canary Media, “You could make a compelling argument that the majority of residential storage on the grid today has no economic reason for existence. A large proportion of these storage systems bought by early adopters have been more emotional decisions. They’ve been driven by the ​‘cool factor,’ or spending money on non-monetary factors like using your own solar power or having clean backup power.”

The situation is ​“changing pretty dramatically,” he says. The cost of solar and batteries have continued to fall, although supply chain constraints have slowed the downward trend significantly. And yet, virtual power plants composed of many homes with rooftop solar, batteries, smart thermostats, and internet-controlled electric vehicle chargers and appliances have begun to deliver value to utilities and to customers alike.

“To truly be a smart-home provider, not just smart whole home controls but at the grid level, the key barrier is software,” Finn-Foley said. Girotra says that Lunar Energy has developed its own software to ​“do things like keep the battery safe, control on and off-grid ramifications, or communicate from the solar to the battery.” For much of the remainder of the software functionality involved, Lunar Energy will be making use of Moixa’s GridShare software, he added.

Simon Daniel founded Moixa and is now Lunar Energy’s senior vice president of special projects. He says, “Once the battery sends the data up to the cloud, that data is represented in a consumer’s mobile app and in the installers’ installation app, and also…aggregated with thousands of other batteries in the cloud platform and it should make smart decisions for the home” using a set of machine-learning algorithms that he claims give Lunar Energy a key competitive advantage compared to other companies offering similar systems.

Moixa’s experience managing batteries, appliances, and EV chargers in the UK and Japan include managing a 35,000 home, 3,330 MWh aggregation, one of the largest of its kind, in partnership with Itochu and Tokyo Electric Power. “The platform is scalable and transferable from one geography to the other,” Daniel says.

Lunar Power Vs The Competition

Some competitors have taken an in-house path to integrating rooftop solar and battery storage. Generac, the leading US manufacturer of backup generators, has acquired companies to supply its own batteries, its home energy management and grid aggregation software, and its smart thermostats. Enphase has engineered its battery systems and grid services offerings around its core micro-inverter products.

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

“I’m excited to see Sunrun, and the industry at large, begin offering Lunar Energy solutions to millions of homes across the nation,” says Lynn Jurich, co-CEO of Sunrun. She is also chair of Lunar Energy’s board of directors. Sunrun doesn’t make its own battery systems but is partnering with a variety of technology providers as it seeks to expand beyond rooftop solar to more comprehensive home energy and grid services and has been selected by Ford to be its partner to make the battery in the F-150 Lightning serve as a backup generator to homes and small businesses.

A Golden Opportunity

Girotra acknowledged the challenges Lunar Energy will face in scaling up manufacturing and hitting competitive price points. ​“We don’t think the product will be successful if you don’t deploy at scale,” he says, adding there is a great deal of potential for more pre-sale product integration to ​“take costs out of the product stack by combining things, eliminating things, not duplicating things.”

Of the roughly 75 million single family homes in the US today, only about 2.7 million have rooftop solar and far fewer of have storage batteries. As more rooftop systems are added, batteries will play an important role in storing their output at midday and discharging it when it’s in short supply — something that solar-rich states like Hawaii and California are already trying to encourage through rate structures and incentives. “If every home will have an electric car and solar panels and home batteries,” Girota said, ​“and the home goes electric, the opportunity is massive.”

 

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2022-08-29 12:35:59

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