One of the few cleantech startups out of Indiana hopes to parlay its military microgrid contracts into a commercial storage and resilience business.
Go Electric began with three people in Indiana in 2011, and still sports an old-school, Comic Sans-adjacent logo. But in the intervening years, it has delivered secure microgrids for military bases that led to additional defense contracts, and the company’s ranks swelled to 27 employees.
The Pentagon has shown an early willingness to pony up for microgrid systems that guarantee bases and critical facilities can stay on-line in the event of an outage or cyberattack.
Now President and CEO Lisa Laughner has her eyes set on a broader market: commercial and industrial customers that want the kinds of bill reductions storage can provide and the resilient backup and uninterrupted power that comes with a proper microgrid.
“We’ve taken a different look at how you make microgrids easy to install, scalable and not bespoke, because most microgrid projects take a long time,” Laughner said. “The way we did that was by putting the controller inside what we think is the hub of all microgrids, which is the battery energy storage.”
Once installed, the combined storage cabinet/controller connects to other assets like diesel generators or solar modules.
The company likes to situate the system right on the customer side of the meter; this saves the trouble of going into control panels, like uninterrupted power supply systems tend to, and makes for a “really slick installation.”
Go Electric sizes its microgrids to meet a site’s peak load, so the customer doesn’t have to bother sorting out non-critical loads to shed, which also requires additional electrical work during installation.
A patented special sauce provides seamless islanding, Laughner said: When the hub senses an outage coming, it flips the switch before any of the devices notice, avoiding even a momentary shutdown.
“No matter what’s going on with the building, it’s always operational,” Laughner said. “That keeps everybody happy in the building, especially if you’re the military.”
Riding a wave from Hawaii
Laughner came to the startup after a VP role in the venture arm of Rolls Royce, where she had practice navigating the military procurement process. That company sold off its famous car division long ago and focuses more on aviation these days.
She brought the business experience and teamed up with technical founders who had the IP. The first breakthrough was when they won a Smart Power Infrastructure Demonstration for Energy Reliability and Security (SPIDERS) grant from the Department of Energy to build a 3.5-megawatt microgrid for Camp Smith in Hawaii.
That project came on-line in February 2016, as part of a broader microgrid on the base. It won the approval of the military, which in turn opened the door to several additional contracts.
In the past year, Go Electric secured deals for Fort Custer, Tooele Army Depot and a mobile application that can be lifted by four soldiers to serve as a microgrid hub in the field.
That last project requires lightweight, durable equipment that soldiers can rapidly set up to power forward operating bases in rugged environments, Laughner said.
Traditionally, each tent has had its own generator for lighting and air conditioning. That can lead to several independent generators running at low capacity, which means less efficient use of fuel. The hub system optimizes across the mobile base, so it can run gensets at optimal levels and distribute the power across the site, thus saving fuel.
It made sense to start with military contracts, because that is one of the few organizations currently willing to pay for energy resilience. Now Go Electric can point to its work with the Pentagon as evidence of its seriousness.
“It’s a testament to our technology, that it’s real and we’re not just a startup making grand gestures and not following through,” said Business Development Director Steve Lichtin.
Commercial expansion
The startup has since expanded its focus to the commercial and industrial sector.
Stem, Advanced Microgrid Solutions and Green Charge have built out a commercial storage business that offers bill savings to customers via demand management while selling aggregated grid services to utilities.
They haven't focused on resilience so far, although AMS in June announced a partnership with PowerSecure to add the option of islanding if customers desire.
Go Electric can provide bill savings with onsite microgrid batteries, but its differentiator is the resilience piece.
It offers no-money-down energy as a service that includes bill reductions, uninterrupted power and backup power.
That’s not far from what Montgomery County, Maryland signed up for with Duke Energy’s renewables arm: a microgrid as service, guaranteeing constant (and cleaner) power for its public safety campus without any upfront expense.
Residential solar company Sunrun has chosen to foreground the resilience component of its solar-plus-storage offering, which recently expanded to Long Island.
But the resilience pitch has proven hard to sell to commercial customers. It requires a far-sighted approach to risk: a willingness to dedicate funds now to prevent the loss that may happen in the potential event of a severe grid outage.
After this year’s string of major storms and other disasters, that “potential” looks more like “probable.”
Go Electric targets businesses for which an outage inflicts substantial pain: grocery stores with food that could spoil, or manufacturing lines that would halt production. Laughner’s team has developed standardized packages for businesses like a 7-Eleven or big-box stores.
It also secured a grant from RISE:NYC, a federally funded program administered by New York City to promote resilience in areas hit by Superstorm Sandy. Go Electric’s sites, on the hard-hit Rockaways, include a gas station, a surf lodge that would act as community refuge, and an insurance office.
“The owner of this business told us that the days post-Sandy were his busiest days ever, so the ability to stay open and process more claims actually does a huge benefit to the community,” Lichtin said.
In making the economics work for unsubsidized projects, Go Electric bucks the conventional wisdom that says sizing a microgrid to meet peak demand simply drives up expenses.
“You have to field a bigger battery pack, so obviously you have more expense with that, but then you also have more battery capacity to enroll in a [demand response] program, which means a bigger paycheck,” Laughner said. “The IRRs are actually better with the larger systems than they are with the smaller systems.”
Time to scale
With a $200 million pipeline (including shortlisted but not yet contracted projects), Go Electric needs to grow its staff -- quickly, Laughner said.
In 2016, the company raised a $4 million Series A, and it’s following up with a $10 million to $15 million Series B expected to close in the first quarter of 2018.
The company has a few other biscuits in the oven. It’s a portfolio company of the Clean Energy Trust accelerator in Chicago, and it’s working with the National Renewable Energy Lab on third-party evaluation of its technology.
The Camp Smith system is up and running, and has led to a follow-on contract. The Fort Custer and Tooele systems are going through testing at Go Electric, and the mobile system is being built. The company expects to install a total of 12 military and civilian systems over the next six months.
The challenge now is to succeed in the little-explored market for commercial energy resilience. It’s sometimes referred to as the thing everyone says is priceless, but nobody wants to pay for.
Much of the early storage industry has clustered in California, and "the average C&I customer in California is much more focused on bill savings than they are about backup/resiliency," said Manal Yamout, senior VP of policy and markets at AMS, in an email.
However, she added, military and the high-tech manufacturing sector are willing to pay for resiliency and reliability, as are customers in Texas and Florida. Plus, commercial customers in the Northeast value both resilience and bill savings.
Go Electric has assembled an on-ramp of government contracts. That funding can sustain a small company, but the critical juncture will be proving out the addressable market for commercial backup and bill savings.
"The military microgrids show they actually have technical expertise, and their business model allows them to approach commercial parties that wouldn't normally be willing to pay a high upfront cost," said Colleen Metelitsa, a microgrids analyst at Greentech Media.
But will companies that want to try energy storage find sufficient value in microgrid backup to take on the more intensive configuration, or will they opt for the leaner demand-management model? Is six years of experience and a handful of Pentagon projects enough to win the trust of consumers?
If those questions turn out in Go Electric’s favor, it will be one of the few startups to make some money in the microgrid space.
