Ice Energy filed for Chapter 7 bankruptcy in December, in a setback for small-scale thermal energy storage.
As lithium-ion batteries proliferated for grid storage, a small contingent of entrepreneurs pitched an alternative technology: thermal storage, which preheats or precools a building to cut electrical usage during expensive peak hours. The technology is simple and cheap and has helped large commercial buildings for years. Ice Energy wanted to extend it to small businesses and homes.
It won several utility contracts to help reduce peak demand by installing Ice Bear devices on commercial customer sites, expanding into the residential market with its smaller Ice Cub product.
Ice Energy filed for bankruptcy with the Central District of California on December 17; the filing scheduled a meeting of creditors for January 27. The document offers few other details about the circumstances.
The company's website is no longer active, and COO Marcel Christians did not respond to a call for comment.
Chapter 7 means the company will liquidate its assets rather than trying to reconstitute and exit bankruptcy. That's an abrupt change of fortune for a company that had a clear path ahead of it, with a plan to execute on contracts it had already won with creditworthy utilities.
Indeed, a breakthrough deal with utility Southern California Edison paid enough that Ice Energy could offer its product to customers for free — if they could be convinced to host an Ice Bear and receive savings on their electric bills. The company pledged to install 1,800 commercial Ice Bear storage units, totaling 25.6 megawatts of demand reduction for the grid. It also won a deal with the municipal utility of Riverside and others, including a groundbreaking project to install 210 residential Ice Cubs on the island of Nantucket to fight summer peaks.
Capital-intensive infrastructure deployment can be tricky for venture-backed startups, but Ice Energy lined up financing partners to own the portfolios of installed assets. That structure protects the operating fleets from the bankruptcy at Ice Energy, which is the entity responsible for developing the technology.
Originally, energy company NRG was financing the SCE deal, but it pulled out amid a broader corporate pivot away from clean energy. In 2018, private equity firm Argo Infrastructure Partners stepped in with $40 million to finance construction. At the time, Ice Energy CEO Mike Hopkins noted that this was a small deal for Argo, but he said thermal storage could scale to drive hundreds of millions of dollars of investment.
“They would not have done this deal if they thought that $40 million was it,” he told Greentech Media then.
Even when utility contracts pay for the system, finding customers takes time and money, as does convincing them to insert a new device into their HVAC system. Customer acquisition has been a persistent challenge for commercial solar and energy storage companies.
How exactly Ice Energy ran out of money is not yet clear. But with its contracts and intellectual property, the company stands a chance of persuading a buyer to pick up the pieces and get back to work. Storage technology companies that go broke have a tendency to reappear in one form or another.