Base Power

Throughout history, the abundance of energy has been correlated with human prosperity. Societies that have harnessed new and plentiful energy sources — whether through agriculture, industrialization, or modern electricity generation — have experienced significant advancements in technology, economic growth, and quality of life. Access to reliable energy is crucial for economic development and improved living standards.

Source: Our World in Data

Reliably distributing energy to consumers across the country requires a vast infrastructure of transmission lines. The electrical grid is the largest and most complex machine in the world, connecting over 12.5K power plants in the US alone, with more than 160K miles of high-voltage power lines and millions more miles of low-voltage distribution lines.

The first grid in the United States dates back to 1882 when Pearl Street Station, the first commercial power plant began generating electricity. In modern times, there are four grid interconnections in the United States: Western, Eastern, Texas, and Alaska. The Texas grid is effectively an island and the grid is separated due to political reasons.

Source: SimpleThread

The US is rapidly electrifying its economy, making average electricity consumption significantly higher and less predictable. Projections indicate that rapid electrification could increase total electricity demand by as much as 35% by 2050. Increased use of EVs and heat pumps, in particular, could double a household's electricity consumption, as EV batteries alone store the equivalent of two to three times the average daily household power use. Global spending on electrification technologies and infrastructure upgrades is on track to hit $2 trillion in 2024. Many states, like California, are mandating all vehicles sold after 2035 to be electric, heightening the urgency to ensure that the electric grid can keep up with future demand.

Source: Quartz

Most of that new demand will be met by renewable energy sources. Solar energy, in particular, has become the “cheapest source of electricity in history”; in 2022, the world surpassed one terawatt in total solar installations. In some states like Texas, renewables generated about 30% of all power in 2023. The queue for proposed new power projects is also dominated by solar and wind nationwide. Renewable energy sources, however, are intermittent. Compared to traditional electricity sources like coal and gas, wind and solar power depend on the weather, making electricity generation unpredictable. As renewables’ share of production capacity increases, energy supply will become more volatile with excess energy during the day and shortages at night.

Source: eia

The electric grid is not prepared for this increased power demand and an increasingly volatile supply of energy. The grid has been built to balance a stable supply of electricity to meet a predictable demand. Moreover, the distribution infrastructure is aging quickly. As a result, customers are suffering higher prices and more outages.

The cost of delivering electricity also increased significantly in the 2010s, despite cheaper generation costs from renewables and natural gas. With increased electricity demand, delivery costs rise because transmission lines must be sized for peak load, which is expensive to build and maintain. Meanwhile, the average length of electricity outage per customer increased from about 210 to over 400 minutes per year between 2013 and 2021. The Texas power grid faces a particularly acute distribution problem, as it relies heavily on renewables. After a historic winter storm in 2021, more than 4.5 million homes, approximately a quarter of all residences, were without power for several days. Texas utility operators allowed the price of electricity to go up to $9 per kilowatt-hour, resulting in electricity bills of thousands of dollars for many residents.

Base Power, also known as Base, aims to relieve pressure on the grid by building a distributed battery portfolio. It uses a REP model to distribute batteries to homeowners throughout Texas. Placing batteries next to homes solves both the supply volatility and demand volatility problems of the grid by allowing homes to store energy when demand and prices are low, and discharge when demand and prices are high, reducing stress on the transmission lines.

Base Power aims to become the “modern power company of the electric era” by offering its customers a reliable and affordable home energy service powered by a network of batteries. Base provides its customers with a home battery, monthly energy service, and installation — all without requiring a solar installation. Base’s strategy is to start on the demand side, addressing grid bottlenecks, and eventually vertically integrate into energy. With enough customers and batteries, Base can optimize energy production, storage, and distribution, cutting out middlemen and lowering energy prices.

Base was founded in 2023 by Zach Dell (CEO) and Justin Lopas (COO).

Dell had been fascinated by batteries ever since he interned at Blackstone prior to his senior year of college in 2019. While there, he worked on a project evaluating the purchase of a lithium mine which made clear to him how fast demand for batteries was growing, and he realized that experts kept underestimating the exponential growth in batteries. After Blackstone, Dell joined Thrive Capital, a venture capital firm. There, he continued to research batteries and took as many meetings with battery companies as possible, intending to understand the space better.

Lopas had a background in mechanical engineering and manufacturing. He graduated from the University of Michigan with a degree in mechanical engineering and began his career at SpaceX as a manufacturing engineer, later leading manufacturing engineering on Falcon Thrust Structures. At SpaceX, Lopas became one of the first four people building the Starbase in Texas and worked on Starhopper, the first prototype of the Starship program. In 2020, he joined Anduril as Head of Manufacturing, leading a team of 150 people responsible for manufacturing engineering, operations, and supply chain.

Dell and Lopas met in late 2022. Dell was visiting Anduril’s Costa Mesa factory since Thrive was an investor in Anduril*. At the time of the visit, Lopas was the Head of Manufacturing at Anduril, and he showed Dell around the factory. Dell and Lopas immediately got along and found a mutual interest in building something in the energy space. Dell was beginning to yearn to start his own company around the time he met Lopas, and Lopas was in the same headspace.

They also shared the view a belief that energy abundance is directly linked to human prosperity. They recognized that the grid was the primary bottleneck to energy abundance and that batteries could be the key to unblocking its limitations. They spent the next six months discussing interesting companies working in hardware and energy and pitching each other related startup ideas. This led them to decide to start a company together.

Over the following months, they discussed a number of ideas and strategies for improving the grid. Their initial idea in February 2023, was an electrification platform for the built environment, starting with premium residential customers and eventually moving into high-volume home builders and commercial projects.

By April 2023, they refined their concept to a vertically integrated approach to create a modern electric utility. They decided they would focus on designing and selling battery packs optimized for residential homes, allowing consumers to generate, store, and sell energy. Between the two of them, they covered finance and manufacturing expertise, but they realized the company would also need to excel at distributed software systems, supply chain, and operations.

For that reason, they recruited Jared Greene (Head of Software), who joined the company as part of the founding team in August 2023 to lead software and engineering. Greene previously worked at SpaceX, where he’d progressed to lead engineer on the Starlink team. He saw a parallel between his work on Starlink and Base’s novel deployment strategy.

Residential battery storage

The electricity market rests on three pillars: generation, consumption, and delivery. All three must work together for the grid to work effectively. However, the growing supply of intermittent renewable energy is making it difficult for grid operators to balance the supply and demand of electricity. Electricity transmission moves power at the speed of light, requiring that electricity generated must match electricity demand at all times to "balance the grid."

Since the grid lacks significant storage, it requires power generation to match consumption exactly. Historically, this was solved by using a combination of different electricity sources. Baseload power plants ran consistently to meet steady demand, while more expensive peaker plants were dispatched during higher demand periods. While natural gas plants were flexible and could be turned on and off easily, making them ideal for meeting fluctuating daily demand, renewables produced energy intermittently.

That formula is no longer sustainable as the economy continues to electrify. Instead of predictable supply meeting predictable demand, the grid now faces volatile supply meeting volatile and growing demand. Adding more transmission capacity is one solution, but modernizing or expanding the grid infrastructure is becoming harder, slower, and more expensive due to regulatory hurdles and project complexities. For example, building new high-voltage transmission lines is costly, estimated at $20-30 billion annually. The average overhead transmission line takes more than a decade to build, with seven years spent in planning and permitting alone.

Source: a16z

Adding storage capacity to the grid is another solution that can relieve pressure on the grid. Batteries, in particular, are getting cheaper, which is making them a more efficient solution than adding new transmission capacity. As described by Casey Handmer:

Batteries are complementary to renewables, smoothing out demand and supply instability caused by variable energy sources like wind and solar, as well as enhancing the usability of stable energy sources like nuclear power by making them more dispatchable.

Load factor is the ratio of average power demand to peak power demand over a given period; a low load factor indicates wasted resources. For example, Texas's grid is sized for 85 GW but is running at a load of 48.7 GW as of November 2024, resulting in a load factor of 57%.

Source: Energy Information Administration

Batteries can help maximize and stabilize load factor by charging when demand is low (thereby increasing trough demand) and discharging when demand is high (lowering peak demand), optimizing the use of existing infrastructure. As battery costs fall and challenges for adding transmission rise, batteries become more competitive for longer distances.

Source: Our World in Data

Between 2021 and 2023, installed battery capacity tripled from 5 GW to 15 GW. The EIA expects capacity to double again this year to 30 GW and grow by another third the following to over 40 GW. A grid with storage reduces the need for generation overbuild, achieving high reliability with less infrastructure. Adding 12 hours of storage to the US grid could cost $500 billion and pay for itself quickly, compared to $7 trillion for transmission upgrades.

But battery deployment is still not progressing as quickly as it could because of interconnection queues. Most of the battery storage capacity in the US is concentrated in centralized grid-scale battery farms. This is because of operational reasons, as batteries are expensive for individual customers. They cost approximately $15K for a unit that pays itself back in 12 years, even after the 30% IRA tax credit. Because of that, battery capacity is less valuable on individual homes as customers cannot arbitrage price volatility as effectively as professional battery farm operators.

However, placing batteries in large storage farms next to electricity generation only helps in solving the supply volatility problem by storing excess energy generated during peak production times, for example when it’s windy or sunny and peak power is not needed. The power must still be transmitted between the generation facility and the consumers to support the maximum load during high-demand periods. It does not help to smooth out the "duck curve" caused by volatile electricity demand.

Large-scale grid battery deployments also face interconnection queues, on average waiting more than 40 months for connection to the grid. The only solution is deploying batteries on a smaller scale close to consumption centers, where they can be easily connected to existing grid connections.

Placing batteries next to homes solves both the supply volatility and demand volatility problems by allowing homes to store energy when demand (and prices) are low and discharge when demand (and prices) are high, effectively smoothing the demand curve. From the grid's perspective, homes with batteries appear to consistently demand about 25% of their peak load, reducing stress on transmission lines. So making the deployment of batteries financially viable in consumption centers would be the most effective solution to ‘balance the grid’ both on the supply and demand side.

Base Battery

Base’s core product is a battery for residential energy storage. The company installs large batteries in customers' homes, starting with a 20 kWh battery and an 11-kW inverter with plans to increase to a 30 kWh battery with a 24kW inverter in the future model. The batteries are designed to last 15 years with Base handling maintenance.

In November 2024, Base Power told Contrary Research that it had begun rollout of a 25 kWh battery, two of which can be installed on homes for a 50 kWH install. According to the company:

Source: Base Power

Because Base's batteries are larger than those of competitors, they can act as the single source of power for the home, eliminating the need for a separate critical loads panel required by systems like the Tesla Powerwall. The batteries are installed next to the electricity meter and serve as the home’s interface with the grid, providing real-time data on customers’ load, and optimizing overall energy use.

Source: Base Power

Base’s battery is designed to maximize a home's standard 240-volt, 200-amp electrical capacity, providing whole-home backup in the event of a power outage. On average, Base's backup battery system has enough capacity to power the customers’ homes for around one day. With average outages lasting 15 to 45 minutes, Base has found that the batteries protect its customers from 97% of outages. Base charges its customers $3K for installation, with a payment plan available.

Source: Base Power

Base assembles its own battery pack in stackable modules to simplify installation. As of 2024, the company purchases battery packs from third parties and adds its own compute modules, allowing the company to gather data on the batteries’ operation. The company is also developing its own custom battery pack that will be available in early 2025.

Base is not planning to produce battery cells, believing that cells will become commoditized. The company believes that focusing on pack assembly will allow it to take advantage of new cell types as better battery chemistries emerge. As of 2024, it uses lithium iron phosphate (LFP) cells, which are more environmentally friendly and abundant compared to nickel-manganese-cobalt (NMC) used in EVs. In addition, Base’s hardware is UL certified, ensuring safety standards, and installations are performed by licensed professionals.

Installation

Base manages battery installations itself through a process it calls the “Deployment Factory”. It views installation as tightly coupled with pack assembly. The company owns the batteries it deploys and only charges customers a fixed $3K installation cost. The custom battery packs Base is developing are designed for easy installation, requiring no special equipment and connectors. Base claims that installation times are also decreased by 50-75% by providing a large battery that can power the entire home, eliminating the need to install a critical loads panel.

Source: Fort Worth Report

The company believes that in the long term as the batteries themselves become commoditized and cheaper, the real bottleneck and cost driver will shift to the costs of installation.

Retail Electricity Provider

In addition to installing residential batteries, Base also becomes its customers’ retail electricity provider. It helps customers reduce electricity loads by charging batteries during times of low demand and discharging batteries during peak times. Base is building sensors and software to aggregate demand signals from its network of connected Base batteries, enabling intelligent charge and discharge of electricity based on real-time data. As Base puts it: “Your home or office should run on 4 am power, not 6 pm power.” Customers benefit from automatic backup, transparent billing, and real-time monitoring via a web app.

Source: Base Power

Ultimately the power company plans to build a decentralized network of batteries which will act as a virtual power plant, allowing it to generate revenues by power arbitrage. A fleet of software-controlled energy storage systems will give Base an edge in power trading. Base's system can access sub-second data, whereas other market participants receive data on a five-minute delay. With a large enough fleet, Base envisions backward integrating into power generation to build a fully integrated utility, controlling the entire supply chain of electricity.

Customer

Base targets homeowners as a Retail Electric Provider (REP). It’s starting with the Texas electricity market due to the frequent outages and volatile power prices driven by renewable generation. The Texas grid is independent from the rest of the United States and managed by the Electric Reliability Council of Texas (ERCOT). Texas is a deregulated energy market, meaning power generators, grid operators, and Retail Electric Providers (REPs) are separate. As of September 2024, Texans can choose their electricity provider from a selection of 167 REPs, with an average Net Promoter Score (NPS) of 14.2.

ERCOT is also particularly vulnerable to external shocks which can disrupt electricity supply and cause extreme price spikes. Between 2000 and 2023, Texas had 210 weather-related power outages, more than any other state in the US. This is driven by the high penetration of renewable sources in the energy mix, at more than 40%. While the problem of instability of power outputs from solar and wind is not limited to Texas, the frequency of extreme weather events and aging infrastructure make ERCOT particularly susceptible to disruptions.

Source: ERCOT

Base operates as a REP, i.e. a company that purchases electricity from wholesale providers and sells it to consumers, available in Texas. It offers its customers savings on their monthly electric bills and protection from grid outages for a fraction of the cost of a generator or own battery. The Base battery acts as a fail-safe during periods of severe weather and high demand, protecting customers from 97% of outages according to Base.

According to the company, Base also offers customers lower average electricity prices. The home battery charges during periods of low demand and discharges during peak load. In Texas, electricity prices change dynamically, every 15 minutes. The changes in power during a single day can be more than 10-fold, so taking advantage of the price volatility can lead to significant savings from customers.

In addition to retail customers, Base is planning to provide grid operators with ancillary services like frequency regulation and demand response, once its battery portfolio reaches sufficient scale.

Market Size

Single-family homes represent about 20% of US power demand. As of June 2024, the total monthly sales of electricity in the US were at $40 billion, with $27.5 billion being residential sales. In 2022, the average annual amount of electricity sold to (purchased by) a US residential electric utility customer was almost 11 MWh, an average of about 899 kWh per month.

Base aims to establish itself in Texas and expand to other deregulated markets to address the growing instability that will come with the growth of renewables and electrification. In 2022, the total retail sales of electricity in Texas were at 475 million MWh. With an average price of $0.1 per kWh, that would present Base a total TAM of $47.5 billion per year just in Texas.

Source: Electric Choice

A note on the above map: as Base Power told Contrary Research, it does not capture the full nuance of the situation. Although the map shows Michigan as deregulated, it practically isn't, there are no retail providers as the state restricts providers to a cap of 10% of the customer base. Similarly, California is only deregulated for commercial customers.

Outside of Texas, other at least partially deregulated markets where Base could operate as a REP include California, Connecticut, Washington DC, Delaware, Illinois, Massachusetts, Maryland, Maine, Michigan, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, and Virginia. These states accounted for over 129 million out of the 394 million kWh of yearly US retail electricity sales as of July 2024. In addition, electricity consumption in the US is expected to grow by 15% to 90% by 2050, depending on the expansion of electric vehicle use.

Residential Battery Storage

The residential battery storage market has seen increasing interest due to the growing adoption of renewable energy and the need for reliable backup solutions in homes. While many residential batteries are designed to be paired with rooftop solar systems, they also provide backup power during outages and help customers manage energy costs, particularly during peak electricity pricing periods. However, the high cost of these systems and the long payback period for consumers creates an obstacle to wider adoption.

Tesla Powerwall: Founded as part of Tesla's broader mission to accelerate the world's transition to sustainable energy, the Tesla Powerwall, which was first introduced in 2015, is a compact home battery that stores energy generated from solar panels or directly from the grid, providing backup power during power outages and helping consumers avoid peak electricity rates. Each Powerwall has a capacity of around 15kWh, and most homes typically require two or three units to meet their energy storage needs.

Tesla has built its energy business around high-margin hardware sales, leveraging its brand to position itself as a premium option in the residential battery market. Unlike some competitors that focus on modularity, Tesla's strategy is centered on bundling Powerwall units with its solar energy products. The Powerwall also integrates with Tesla's broader ecosystem, offering seamless energy management through Tesla's software platform.

However, despite its brand recognition and functionality, Tesla Powerwall faces challenges. It comes with high upfront costs of about $1K per kWH. While Tesla has a wide market reach, its primary focus on high-end customers may limit broader adoption among cost-conscious buyers. In comparison to competitors, the Powerwall’s capacity per unit is lower, often requiring customers to purchase multiple units to meet their energy needs.

Sonnen EcoLinx: Founded in Germany in 2010, Sonnen is a residential battery storage provider. Its flagship product, the ecoLinx, is a 30kWh home battery designed for backup power, load management, and optimized energy use. What sets Sonnen apart from its competitors is its focus on integrating battery storage with home automation platforms and its virtual power plant (VPP) technology, which enables homes to operate independently from the grid and participate in energy trading.

Sonnen’s strategy differs from that of Tesla and other competitors in that it focuses on both individual home energy management and broader energy system integration. Through its VPP technology, Sonnen connects multiple homes with ccoLinx batteries, allowing them to function as a distributed energy resource. This feature could be attractive to customers who are interested in energy independence and maximizing the value of their home battery systems.

Sonnen has also built its business around high-end customers, similar to Tesla, but its offering of smart home integration and Virtual Power Plant (VPP) services differentiates it in the market. However, the 30kWh capacity of the ecoLinx and its advanced features come at a premium price, starting at $30K, which could be a barrier for some consumers. Sonnen has raised a total of $169.2 million in funding as of November 2024, with its latest round of funding being a $71 million round which included a partnership with Shell in 2018.

Enphase IQ Battery: Enphase Energy, founded in 2006, is a public company that is known for producing solar inverters. It has expanded into the residential battery market with its IQ Battery product. Unlike Tesla and Sonnen, Enphase’s battery system is highly modular, with each unit providing 10kWh of storage. This modular approach allows customers to scale their energy storage based on their individual needs.

The IQ Battery is designed primarily for homes with rooftop solar installations, and its system is compatible with both indoor and outdoor settings. One of Enphase's key advantages is its software platform, which allows homeowners to manage and monitor their energy usage in real time through an app. The battery system is also designed to operate in and withstand extreme temperatures. The batteries are certified for both indoor and outdoor installation, with operations between -15°C and 60°C, and start at around $2K in price.

Enphase’s strategy differs from competitors by focusing on a lower-cost, modular approach that appeals to a broader market of consumers. The IQ Battery’s lower capacity per unit may not meet the needs of larger homes or those requiring significant backup power, but its flexibility, scalability, and affordability may make it more broadly appealing.

Retail Electricity Providers

In the retail electricity market, providers offer various options to consumers, primarily focusing on payment flexibility, fixed and variable rate plans, and renewable energy products. Traditional REPs, such as TXU Energy and Reliant, dominate this space, but new entrants like Base are differentiating themselves by offering energy solutions that include battery storage.

TXU Energy: TXU Energy, founded in 1882, is one of the largest retail electricity providers in Texas, and offers a wide variety of energy plans, including fixed-rate, variable-rate, and renewable energy options. TXU offers tiered pricing structures and incentives such as free electricity during certain hours of the day. While TXU does offer solar energy options, it does not provide solutions that enable consumers to store energy or manage power during outages.

Reliant Energy: Reliant Energy, founded in 2000, is another major retail electricity provider in Texas. It is a subsidiary of NRG Energy and offers a range of fixed and variable-rate plans, as well as renewable energy options. Reliant offers renewable energy plans targeted towards environmentally conscious consumers. However, it does not offer battery storage as part of its service. While it provides renewable energy options and some smart home integrations, its approach is primarily geared toward offering competitive electricity rates rather than empowering consumers with energy storage or backup power during outages.

Backup Alternatives

Generac: Founded in 1959, Generac operates in the backup energy market. Generac's primary offering includes traditional backup generators that run on gasoline, natural gas, or propane, providing reliable battery backup power during outages. These generators provide a solution for homes in regions prone to frequent power outages, especially in areas with extreme weather conditions.

Generac has ventured into the battery storage space with its PWRcell product, aiming to compete with companies like Tesla in the home energy management market. The PWRcell battery can be paired with rooftop solar systems or used as standalone backup power, offering a clean energy alternative to traditional fossil-fuel generators. By integrating both generators and battery storage options, Generac appeals to a wide range of consumers who prioritize either long-term sustainability or immediate backup power reliability.

Base Power's business model involves installing a network of batteries to capitalize on fluctuations in energy prices while offering consumers lower fixed monthly utility bills.

REP

Base purchases electricity from power generators and sells it to customers at a fixed monthly rate as a retail electricity provider. The company offers contracts with yearly billing, with pricing reviewed year-on-year based on usage data from the Base battery.

In addition to energy services, Base provides its customers with a battery pack. Base owns the batteries, charging customers $3K for installation, compared to the cost of around $20K for purchasing a battery system. The batteries are installed on a 10-year agreement. Base finances the batteries using 30% IRA credits and asset-backed loans at the battery portfolio level to reduce the equity expenditure per battery and increase profitability.

Power trading

The REP model allows the power company to distribute many batteries across the grid and pay back the cost of the battery installation. Base’s core revenue stream, however, involves using its battery portfolio to trade energy and provide ancillary services to the grid. By trading on the battery storage capacity, Base is able to capitalize on price arbitrage and profit by charging the batteries at times of low demand and discharging at times of peak load. Base aims to purchase electricity in stable day-ahead markets and then profit by selling it in volatile real-time markets.

Source: Not Boring

Base has seen increasing traction in battery installations throughout 2024, which is when it began installing units. As of May 2024, Base claimed to have a waiting list of a few hundred customers and was aiming to hit “hundreds” of installations in late 2024. As of June 2024, Base had deployed around 30 battery systems and was installing about one battery pack a day.

In October 2024, Base told Contrary Research in an interview that it was installing up to nine batteries a day. Co-founders Justin Lopas and Zach Dell stated that they were “scaling up as fast as we can” and were focused on getting that number up to 30 batteries a day. The company indicated that there was a high degree of demand with “on the order of tens of thousands of people who have expressed interest online”.

They also stated that the company had “a couple hundred batteries in the ground” already and that they were “tracking to a couple thousand batteries in the ground next year”. Base COO Justin Lopas told Contrary Research in a later November 2024 interview that the company had already installed a total of ~10 MWh of energy.

Base also began trading power in 2024, selling stored energy to both customers and the grid. In May 2024, the company launched in the Austin area and expanded to the Dallas-Worth area in August 2024. According to the company, Base has backed up their customers in every outage since then and saved customers tens of thousands of dollars on their energy bills.

As of November 2024, Base had raised a total of $68 million in funding from investors like Thrive Capital and Valor Equity Partners. Its board includes Antonio Gracias, who has served on the boards of Tesla and SpaceX.

Commercial Opportunities

Base Power is positioned to capitalize on the growing demand for energy resilience among commercial property owners. With increased emphasis on uninterrupted power supply, especially in sectors where even brief outages can lead to significant operational losses, large-scale battery storage installations are becoming an attractive solution. Commercial properties, from manufacturing facilities to data centers, require backup power systems that can offer both reliability and scalability.

Base Power’s expertise in residential storage installations provides a strong foundation for expansion into commercial settings, where larger battery systems can be installed to prioritize outage protection. The ability to integrate energy storage solutions that not only provide backup power but also allow companies to capitalize on demand response programs makes this an area of immense growth. Additionally, the integration of battery storage with new construction projects can reduce installation complexity and costs, making this a strategic focus for Base Power as they build relationships with developers.

Government Subsidies

A significant opportunity for Base Power lies in the increasing public sector support and financing for energy storage solutions, particularly driven by the Inflation Reduction Act (IRA). The IRA offers transferable tax credits that incentivize stand-alone battery deployment, making battery storage a more financially attractive option for both developers and end-users. There are tax credit marketplaces such as Crux that assist with connecting buyers trying to lower their tax bill and renewable project developers. This, combined with a steady decline in battery costs, presents Base Power with an opportunity to scale aggressively.

Utility Partnerships

Another significant opportunity for Base Power lies in regulated markets where partnerships with utilities can enable the deployment of battery storage for grid support. Utilities face increasing pressure to manage peak demand and improve grid stability, and battery storage has emerged as a key tool for load balancing. Base Power can work with utilities to deploy battery systems that support the grid during high-demand periods, offering services like peak shaving and load shifting.

Moreover, in regulated environments where utilities often have to manage renewable energy integration, Base Power’s battery storage systems can store excess generation from solar or wind, smoothing out fluctuations and providing grid services like frequency regulation. With recent policy shifts, such as the IRA’s tax incentives for standalone battery storage, utilities are incentivized to incorporate these systems, providing a critical entry point for Base Power to expand its footprint through utility partnerships.

Permitting Reform

Permitting remains a significant hurdle for energy storage installations, with processes varying widely across municipalities. In some municipalities, permitting for battery storage can take as little as two days, while in others it may drag on for several weeks. Streamlining and standardizing these processes through policy reform represents an essential opportunity for Base Power.

Advocating for and participating in the creation of local and state-level policies that simplify permitting could drastically reduce the installation timeline and associated costs. As more regions look to accelerate renewable energy deployment, there is a clear need for permitting reforms that allow for quicker installations without compromising safety or regulatory standards. By positioning itself as an advocate for such reforms, Base Power can help drive policy changes that benefit both the industry and consumers, while also positioning itself as a leader in navigating and shaping the regulatory landscape around energy storage installations.

Utility Companies and Regulatory Barriers

Base Power’s model, which relies on distributed energy resources (DERs) such as residential battery storage, faces significant challenges from traditional utility companies and evolving regulatory frameworks. Utility companies often have vested interests in maintaining centralized power generation models and may resist the widespread adoption of distributed energy solutions. Additionally, regulatory changes could slow the deployment of DERs, as policies can be complex and vary across jurisdictions. Despite these challenges, Base Power's decentralized approach provides consumers with greater energy independence, and regulatory hurdles, though impactful, are likely surmountable as the energy market continues to evolve toward cleaner, more flexible solutions.

Grid Infrastructure Limitations and Upgrade Costs

The US’s electrical grid infrastructure poses a significant challenge to the widespread adoption of battery storage. It is not fully designed to handle large-scale battery operations, which require upgrades, such as enhancing neighborhood transformers at a cost of approximately $2K each. These infrastructure investments could slow down deployment in the short term. Additionally, human factors, such as regulatory hurdles and resistance from utility companies, complicate grid upgrades. However, as demand for distributed energy resources grows, these upgrades become increasingly necessary and achievable, particularly with ongoing technological advancements and neighborhood-level adoption strategies.

The grid is becoming increasingly overloaded by aging infrastructure, a volatile energy supply, and rising demand. The growing demand for electricity, fueled by the electrification of various sectors, places immense pressure on the grid, a system already stressed by aging infrastructure and increased renewable energy integration. Battery storage offers a transformative solution by addressing both supply and demand volatility. Base Power installs home batteries, allowing customers to store energy during low-demand periods and use it during peak times. This mitigates high energy costs and protects customers from power outages while easing pressure on the grid. Starting in Texas, Base Power plans to expand its model to other deregulated markets, aiming to eventually become an integrated utility. By creating a network of distributed battery storage, Base Power is not only offering households energy reliability but also a chance to play a pivotal role in modernizing the grid and ensuring the future of energy abundance.

*Contrary is an investor in Anduril through one or more affiliates.