In the race to combat climate change, the energy storage and battery sectors are emerging as pivotal players. Startups in these industries hold the potential to drive meaningful innovation during a time of unprecedented demand. By 2030, global energy storage capacity must increase sixfold to support the deployment of new solar PV and wind power, according to the International Energy Agency.
As a result, projected investments in battery technology are set to reach $800 billion by 2030, quadrupling 2023 levels. This investment will be crucial for expanding manufacturing capacity and meeting growing demand. To access this massive potential, early-stage companies will have to disrupt conventional approaches, forge strategic partnerships, and navigate a landscape dominated by established giants.
Market validation and customer engagement
Engaging with potential customers early is crucial for validating market demand and refining the product. This helps ensure that the technology meets real-world needs and is positioned for success. Customer feedback can provide invaluable insights that guide product development and marketing strategies. Case in point: Liminal Insights offers in-line, high-speed ultrasound inspection to help battery cell manufacturers and auto OEMs assess cell quality directly on the production line. In an industry where producing cheaper, more reliable products hinges on improving cell quality, Liminal’s solution can address this need. The company initially explored real-time battery health monitoring in EVs but quickly shifted focus to where the need was more pressing—during manufacturing.
Over-engineering solutions without understanding market demands can lead to wasted resources. Using well-established components, engineering standards, and predictable business models helps partners support startups more efficiently.
Understanding how customers currently buy, source, and interact with their power needs is helpful in building energy storage solutions that can be adopted successfully. Startups should remain flexible and ready to pivot based on customer input and cost considerations. This agility can make the difference between success and failure in a fast-evolving market.
Investors are increasingly focused on startups that demonstrate a clear market need and the ability to meet that need with innovative technology. Startups must present compelling evidence of market potential and scalability to attract funding. Clear, data-driven pitches that outline the market opportunity, competitive landscape, and growth strategy can be highly effective. Now, more than ever, it is imperative to communicate how later stages of the business will be financed, and what talent will be required to execute those agreements. Drawing comparisons to existing models of scaleup and production can help.
Disrupting conventional approaches and strategic partnerships
The energy storage market, which is currently outpacing wind and solar in terms of annual growth rate, according to Wood Mackenzie, is dominated by a few large companies with entrenched supply chains and customer bases. In a crowded market, a clearly articulated value proposition is crucial.
Emerging battery and energy storage companies must demonstrate how their technology addresses critical problems more effectively than competitors. This involves deep market research to understand specific customer pain points and needs. While hiring an expensive firm is one option, early-stage startups can also access market research through industry reports, networking with industry experts, or hiring specialized consultants who bring a network and a working knowledge of the industry to support innovation in the energy sector.
One of the most significant hurdles for startups is transitioning from small-scale demonstrations to full-scale production. Startups must plan these transitions carefully. Ensuring that the technology is scalable and that the infrastructure can support growth without compromising quality is vital. This involves detailed planning and a phased approach to scaling, allowing for adjustments based on real-world feedback.
This leap requires securing strategic partnerships and third-party validation to gain market credibility. Collaborating with established companies, such as large manufacturers or industry leaders offering complementary products or services, can provide the necessary resources, expertise, and market access to scale effectively. Additionally, third-party validation from experienced organizations like the National Renewable Energy Lab (NREL) and through pilot projects can enhance credibility and attract investment.
Leveraging accelerator and fellowship programs
Both accelerator and fellowship programs provide valuable insights and support by engaging with industry stakeholders. These programs help startups validate their technology, understand customer requirements, and secure funding for pilot projects. Participating in an accelerator can also provide networking opportunities and mentorship from industry experts.
Antora Energy is an example of an energy storage startup that successfully navigated market validation and technical milestones with the support of the Shell Gamechanger Accelerator Powered by NREL (GCxN), as well as the Activate Fellowship, a two-year immersive experience that equips science entrepreneurs with the skills, networks, infrastructure, and funding they need to quickly and effectively bring their groundbreaking research to market. Activate is a 501(c)(3) nonprofit and does not charge any fee or equity for fellows to participate.
Antora Energy commercialized a breakthrough thermal battery that provides zero-emissions energy to the industrial sector, helping to decarbonize the single biggest source of global emissions. Antora entered the GCxN program in an early stage. The insight and support during the program helped Antora commercialize high-efficiency thermophotovoltaic cells that convert heat into electricity, enabling Antora’s thermal batteries to output power in addition to heat.
Earlier this year, Antora Energy closed a $150 million series B funding round from investors including Decarbonization Partners, Emerson Collective, GS Futures, The Nature Conservancy, Lowercarbon Capital, Breakthrough Energy Ventures, and more.
Many startups are finding success outside of the traditional applications of energy storage for the grid. Electrified Thermal Solutions is another GCxN and Activate startup developing thermal batteries that facilitate industrial decarbonization. The company recently received a $5 million award from the Department of Energy’s (DOE) Industrial Efficiency and Decarbonization Office and a $35 million award from the DOE Office of Clean Energy Demonstrations. The company also successfully achieved Technology Readiness Level 6 from the DOE, demonstrating its Joule Hive Thermal Battery’s capability to deliver high-temperature heat for industrial processes, positioning it for further commercial deployment.
Scaling startups in the energy storage and battery market is a formidable challenge, but one filled with potential. By focusing on market validation, avoiding common pitfalls, and leveraging strategic partnerships, the Activate Fellowship, and accelerator programs, startups can navigate this complex landscape and achieve long-term success. The journey is demanding, but the rewards—in terms of market impact and environmental benefits—are immense. The future of energy storage hinges on the industry’s ability to overcome these challenges and continue advancing technology to ensure a sustainable and reliable energy supply.
Johanna Jamison is the program manager at GCxN, an accelerator run by NREL and funded by Shell and Nikhil Gargeya is the senior strategic partnership manager at Activate.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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