Stem, formerly known as Powergetics, is relaunching, rebranding, and reinventing itself. The firm began, stealthily, as a hardware-focused firm which originally looked at how to combine energy storage with residential solar, but soon Powergetics called itself an "intelligent energy storage system."

Powergetics was targeting small businesses and using relatively small-scale lithium-ion batteries to provide ancillary services for customers that didn't have loads large enough for the wholesale demand response market. Here's a patent application from Stacey Reineccius, Powergetics' co-founder. The invention "provides systems and methods for control of power charge/discharge from energy storage system [sic]. The invention also provides for power monitoring and management, including power management for a variable generator."

According to the firm, the Powergetics storage solution was a standalone hardware (battery) and software (monitoring) package. The battery charged up in off-peak conditions and then applied that energy during the day to lower peak demand and provide emergency backup power.   

That was the old company's mission.

The new company has made a bit of a pivot in its business plan. A business plan pivot early in the life of a startup is more the rule than the exception and can indicate an adaptive and market-aware management team.

Stem, based in San Francisco, is now a "cloud-based energy optimization solution that reduces peak electrical usage, lowers electrical bills, and eliminates the need for new generation facilities," according to the company's maiden press release. The 30-employee-company is armed with more than $10 million in VC funding from the Angeleno Group and Greener Capital. David Buzby, former chairman of the board of SunEdison, is also an investor.  

I spoke with Brian Thompson, Founder and CEO of Stem. He said that the company has created a storage system that can save the consumer energy and money without any behavioral changes or compromises for the business. "We are transforming the way people use electricity without changing what they do,” said Thompson.   

Utilizing a battery, advanced power electronics, and predictive analytics, the company's technology is able to make economic energy decisions on an hourly basis as an automated system that optimizes how customers pull power off the grid. Part of Stem's secret sauce is the power electronics needed to get AC into and out of a DC battery. "A big piece of our IP is our power electronics," said Thompson. The inverter, charger, and battery management system (BMS) have to form an integrated whole and "have to work together to do anything interesting."

The CEO stresses that "It's not energy efficiency; it's energy optimization," adding, "it can radically transform the economics of energy consumption in commercial businesses." Electricity continues to be one of the largest expenses for commercial businesses despite the proliferation of energy efficiency technologies.

Initial customers will be medium-sized commercial entities such as fast-food restaurants, retail chains, and hotels.
 
The CEO said, "We're using the best value-driven battery we can find," adding, "It's effectively an electric vehicle battery, small and dense enough to fit in a commercial building. It's like parking an EV in your office." Initial technology uses lithium-ion chemistries. Typical EV batteries are in the 20 kilowatt-hour to 40 kilowatt-hour range, but the size of the application will determine the size of the battery, according to the CEO. Stem is not a battery maker and is technology-agnostic as to battery type. A number of Asian or American companies with battery technology such as A123, Samsung, NEC, LG, Sony, and Mitsubishi could be potential partners for Stem.

The goal is to optimize the battery in intelligent ways and make a business plan that is stand-alone without any incentives. The CEO said that the system works better for the customer in regions with complex rate plans, allowing the software-as-a-service (SaaS) product to provide more predictability for the customer (and perhaps the utility) and to help businesses become better grid citizens.

By using the cloud, said Thompson, "You can use adaptive analytics across different business and adapt to the specific business and vertical. The ability to adapt to the user is the secret weapon."

Many storage startups have focused on hardware, chemistry, and physics, looking to coax more energy or power from a material or device. Companies like Stem (and perhaps Xtreme Power) have set out to provide a much more integrated system with grid awareness and intelligence. 

Tags: angeleno group, batteries, energy storage, greener capital, grid-scale energy storage, khosla, powergetics