If you can’t beat ‘em, join ‘em. Or at least invest in ‘em. That's the guiding philosophy for many utilities eyeing the competitive threats swirling around them.
In 2016 alone, utilities in Europe and North America invested $1 billion in distributed energy companies across solar, software, storage, combined heat and power, and a range of grid management technologies. Since 2010, utilities have invested nearly $3 billion in startups.
That tally comes from Shayle Kann and Andrew Mulherkar, who have been tracking activity. They recently released their findings in a free report.
In this week's show, we talk about what the ramp-up in investment tells us about utility innovation strategies.
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Findings from the report:
• Utility companies in North America and Europe have invested over $2.9 billion in 130 individual distributed energy companies since 2010
• Investment volumes have increased substantially over the past two years, and over $1 billion of the total came in 2016 alone
• 42 utilities have made investments or acquisitions in this market, and 10 of these companies have made at least five investments
• Five of the seven most active utility investors are headquartered in Europe, but a larger number of North American utilities have made at least one investment
• North American utilities have focused more on distributed solar, while European utilities have invested more in combined heat and power
• Most investments have resulted in minority equity stakes, but 37 distributed energy companies have been acquired by utility companies