Axiom Exergy has raised $2.5 million in funding round to bring its refrigeration battery to supermarket customers in key markets.
Investors include Element 8 Fund, Victory Capital, the MIT Angels, Propel(x) angels, the Sierra Angels, Tesla CTO JB Straubel and other undisclosed investors.
The financing comes as the young company has finished building its first full-scale system and is getting its first commercial project in the ground. The money will be used to support $5 million in signed contracts.
Axiom’s technology is long-scale thermal energystoragethat leverages existing refrigeration and does not require any retrofits to the systems themselves. Axiom’s energy storage system takes the extra capacity from the refrigerator to freeze a tank of salt water overnight. The basis of the technology is similar to what Ice Energy does with air conditioning.
The Axiom refrigeration battery has three main components. The first is a system integrator that plugs into the central refrigeration system, like a new display case would. There is also a large thermal storage tank with the salt water stored outside or even underground. It is about half the size of a shipping container. The third component is cloud-based software and a dashboard.
During afternoon electricity peaks, the refrigeration battery uses the frozen salt water to provide refrigeration to the store’s units, which reduces or eliminates the need for compressors or condensers.
The sweet spot for Axiom is the medium-sized supermarket of about 20,000 to 60,000 square feet, says Amrit Robbins, CEO of Axiom Exergy. “We’re at the early stages of building relationships with customers.”
So far, it’s a relatively easy sell, and the startup says it has more interest than it can meet. Energy spend is the third-largest line item for most grocery stores and margins are razor thin, usually less than 2 percent.
“The Axiom Exergy team has deftly reimagined what it means to supply energy storage by developing a robust, cost-effective solution specifically for markets where saving energy costs has a big impact on the bottom line,” Lars Johansson, co-manager of the Element 8 Fund, said in a statement.
The sales proposition is a savings-as-a-service model with no upfront capital on a five- to 10-year contract. The technology, which only uses off-the-shelf components from the refrigeration and HVAC industries, has an estimated life span of about 30 years, according to Robbins.
For most customers, the savings from peak demand charges are the largest piece of the pie. The technology can cut up to 40 percent of peak demand. But demand response services are also a possibility, and in some markets, like New York, they can earn even more than peak demand savings. There is also a proposition of backup cooling services, which had not been a focus for Axiom at first, but which represent a common concern for many grocery chains and a value-add in the sales process.
Robbins said the technology’s payback is attractive today in about 11 states, although the 13-employee company is mostly focused on California and New York.
Axiom is targeting the 20 largest supermarket chains, which own about two-thirds of the grocery stores in the nation. For the other third of the market, the company plans to work with energy service companies, and refrigeration sellers and maintenance channel partners.
“The end goal is to have regional or portfolio-wide rollouts based on amount of savings and ease of installation,” said Robbins.
The installation is theoretically much faster than a lithium-ion battery behind-the-meter system, as it does not have to go through a utility’s interconnection process, which can take months. There is still some local permitting that has to be approved, however, so the installation time will be variable, especially as the first commercial systems are deployed.
The long-duration refrigeration battery is a complement to other energy storage options, such as lithium-ion, said Robbins. He noted that the investment from Tesla’s Straubel illustrates that Axiom’s technology is part of a portfolio of solutions.
The long duration of the thermal battery, which can provide 100 kilowatts for six hours, should appeal to utilities for longer-term grid services where a shorter-duration traditional battery may not be as practical. Robbins said his company is in talks with some utilities about leveraging its systems as behind-the-meter assets.