Energy storage is critical to help us unlock the full potential of renewable energy. Without energy storage systems, we would not be able to affordably reach net-zero greenhouse gas emissions. It is a key step to enable low carbon systems that will help fight climate change and make affordable energy more accessible to everyone.

New York is increasingly becoming known as one of the global energy storage hubs in the world, thanks to Biden’s Build Back Better Plan that will invest billions into climate and clean energy among other select industries. Our New York Program, The Clean Fight that was recently selected to manage US$10M Empire Technology Prize to advance building decarbonization brings you ten growth-stage companies in the latest cohort to accelerate New York’s position as a U.S. hub for energy storage.

The program will focus on battery and energy storage solutions, development and manufacturing. The goal is to help these companies to successfully and rapidly scale sales and manufacturing in New York. To facilitate this, each of the selected companies is eligible for:

• a range of tailored benefits, valued at up to $100,000 per company to support capacity building, deployments or manufacturing capabilities in New York;
• hands-on matchmaking with industry leading customer and capital partners;
  bespoke support services; and
• expert insight into navigating the New York State market.

Based in Europe, Australia and North America, and working across the value chain, listed below are the ten transformative companies. We’re excited to see how they work together and with our partners to aggressively advance the clean energy transition, while boosting economic opportunity and job creation for all.

Cells & Packs

Cadenza Innovation, based in Connecticut, makes novel battery packs designed to address one of the greatest concerns with Lithium-Ion batteries – fire prevention, making them safer, more reliable and affordable.

NY’s Electrovaya makes batteries with an exceptional combination of high energy density, safety and longevity, making them particularly well suited to heavy use vehicles such as electric trucks and buses.

Energy Storage Systems

Toronto’s e-Zinc makes battery cells that store electrical energy within zinc metal, storing hundreds of hours of energy at a significantly lower cost. This can dramatically improve the value proposition of intermittent electricity such as wind and solar.

Based in Australia, Glaciem Cooling’s heat pump technology provides heating and cooling to commercial and industrial customers, combined with a phase change thermal battery to provide integrated energy storage, for improved efficiency and cost.

Buffalo, NY based Viridi designs and builds distributed energy storage systems that are affordable, scalable and safe enough for use in occupied buildings, providing on-demand power for industrial, medical, commercial and residential applications.

Mobile & Mobility Systems

Sweden’s Elonroad produces dynamic EV charging solutions embedded into roads, allowing for charging on the go. This also enables battery sizes to be reduced by up to 80%.

Portable Electric, based in Vancouver, makes portable, battery-based generators to replace gas and diesel generators, providing clean, silent power on demand. Their systems are used on job sites, for emergency EV and fleet charging, and as backup power.

Distributed Energy Resources

Canadian company eCAMION delivers a Distributed Energy Resource solution for customers looking to manage batteries, solar installations, and EV chargers to maximize efficiency while minimizing cost and strain to the grid.

OhmConnect, based in California, builds Virtual Power Plants by connecting to residential batteries, EVs and smart thermostats, reacting in real time to the needs of the grid, reducing reliance on high-pollution peaker plants and lowering GHG emissions.

Austin, Texas based Yotta Energy produces distributed energy products, including EV chargers and the first solar battery that integrates behind rooftop solar panels. The integrated battery significantly reduces installation costs, along with its plug-and-play design that means if you can install a solar module, you can install their battery.

Learn more about our New York program, The Clean Fight designed to help the world’s best growth-stage startups significantly scale their business in New York State, while boosting economic opportunity and job creation for all. The Clean Fight is also a member of the winning New Energy New York coalition, who were awarded $113M as part of the Biden Administration’s Build Back Better Regional Challenge.

The managing, trading, and financing of more and more distributed renewable projects, such as rooftop solar and EV charging stations, is becoming exponentially more complicated. Current energy systems and financing models are increasingly no longer fit for purpose, but this is creating new opportunities for climate fintech startups.

Blockchain technology, for instance, can help solve some of these problems given its transparency and immutability. Power grids, energy providers, and end users can use distributed ledgers via blockchain to track electricity generation and transaction records without a centralized organization in the middle. Financial institutions can also use blockchain to verify the operational data of the distributed renewable energy projects they have financed and decide their credit line, while minimizing the risks of operating miss and fraud.

So, how can startups best exploit this opportunity?

To answer this question, we first need to look at the ecosystem. Take a rooftop solar project, for example: there are many stakeholders in the value chain, including project owner, equipment supplier, financiers, and other service providers with different bargaining powers. As the end users, project owners usually have the greatest bargaining powers, but for distributed project owners, their bargaining powers aren’t as great as utility scale project owners.

Major equipment manufacturers have strong bargaining power as well, since the market is now dominated by just a few players. Among all solar equipment, the most relevant and important one that connects the physical world and the digital world is the inverter, a device that converts DC (direct current) to AC (alternating current), while recording electricity generation data. Top inverter manufacturers, such as Huawei and Sungrow, controlled 44% of the market share in 2021. Therefore, it’s natural for inverter manufacturers to develop blockchain solutions for downstream clients. Financial institutions are also key stakeholders in the value chain. However, they lack the adequate industry resources and knowhow, and rely on industry players as intermediaries, usually equipment suppliers, to develop businesses.

Given this competition landscape, what are the implications for climate fintech startups?

1. Startups need to define their value proposition in competing and cooperating with dominant equipment suppliers.

Even though inverter manufacturers might have some aspiration to develop blockchain technology by themselves, startups that focus on blockchain still hold a technological comparative advantage. Expanding their business to cover inverter suppliers is easier than inverter companies starting from zero. If startups can define themselves as an enabler and help inverter manufacturers complement their current business lines, they may avoid direct competition with these dominant equipment suppliers.

Dipole uses blockchain to make renewable energy more easily accessible across in Asia.

2. Target small and medium-size markets as an alternative strategy.

These markets are usually served by scattered small players who don’t have the right technology, abundant capital, or enough incentive to develop blockchain applications on their own. This gap could be filled by climate fintech startups. For instance, Dipole, a startup in New Energy Nexus China’s Excel Cohort, develops blockchain technologies and applications for distributed renewable energy projects, and has secured an investment from Jolywood, a medium-size solar equipment manufacturer. This has enabled this startup to access its investor’s market.

However, those with the most need sometimes cannot afford expensive technological solutions. The key for startups is to develop standardized products that are cost-efficient to attract small-size clients.

3. Partnering with financial institutions could be a long-term winning strategy for climate fintech startups.

Ready-to-use blockchain-based products from climate fintech startups will allow banks to enhance their due diligence and credit management processes. Compared with taking a one-time deal with assembly or inverter companies, long-term partnership with banks and other financial institutions is considered a superior choice. New Energy Nexus is actively helping climate finch startups, partner with leading green banks, such as China Industrial Bank.

4. Startups can leverage their position in other more fundamental and influential public blockchain projects.

Proactively joining public blockchain projects like the state backed Bit Factory project will entrench startups’ positions. Startups, especially for those at the scaling stage, should  make themselves the base (or a brick of the base) of the whole industry supply chain, instead of narrowing down to a single point. For example, by participating in the Bit Factory project, Rivtower, another startup supported by New Energy Nexus China, was able to attract investment from China Merchants Bank, and further extended its business into other climate finance projects.

Yafu Zhao is the Climate Fintech Lead at New Energy Nexus and is based in Shanghai, China.

It’s a little known fact outside of this part of the world, that Uganda is a hotspot for entrepreneurs. My home of Uganda is brimming with an enterprising community ranked as one of the most entrepreneurial in the world. So as someone working in the climate space for 7 years, I didnt just see the climate talks in Glasgow as an opportunity to tackle climate change, but also as an opportunity for entrepreneurs to help Uganda leapfrog dirty fossil fuels and serve communities across the country with clean energy. 

This is particularly urgent for remote and marginalised communities that risk being left behind in the global clean energy transition. In Uganda, only 19% of the country’s rural communities have access to electricity, and less than 2% have access to modern cooking facilities. But rather than rely on highly centralised dirty fossil fuels, there’s an opportunity to transition directly to clean energy.

The nonprofit I work for, New Energy Nexus, helps create new markets for clean energy products in these remote areas – a model that won the Ashden Award for clean energy access at COP26.  There are several lessons we’ve learned in the last 5 years that can help scale the clean energy transition.

Firstly, access to funding in rural entrepreneurs is crucial to unlocking innovation.

Uganda’s startup scene is booming, but all too often, the benefits of clean energy don’t make it beyond the nation’s major cities or towns and the reason is often lack of access to stable funding.

For instance, if you look at the local economies in rural communities, most villages are dependent on agriculture and are exposed to its climate change-induced seasonal challenges. So if you run a shop and sell products there, you will have on average about six months of very good income and six months of very low income. And yet there are fixed costs over the whole period: you have to pay the rent and your employees. This is how easier access to funding can help an entrepreneur such as a farmer who may need to access a solar water pump for production during dry spells and rent it out to another farmer for a fee.

However, funding for such initiatives is not easily available for rural farmers or individuals because of the conditions that come with acquiring the fund with the most common one being high interest rates and collateral. 

Secondly, increasing uptake of clean energy products depends on a bottom-up approach.

In rural Uganda, community-based organisations (CBOs) provide many essential services – supporting better health, education, sanitation and work for local people. We learned very quickly that these organisations have the networks, trust, and community reputation to bring new technologies, such as solar lights, water filters, briquettes and clean energy cookstoves, to rural villages.  

Their vital social role can be leveraged to increase uptake of renewable energy through retail and advocacy. It is these CBOs that understand the buying patterns of their customers by providing credit payment facilities like installments payment, which are most favorable for customers. It is not just CBOs that can drive this change forward. 

Uganda, like much of Subsaharan Africa, is home to tens of thousands of village-level nonprofit groups like Farming Groups and SACCOs that are typically self organised and self managed to address gaps in service delivery. Working with such networks is one way an ecosystem can be built and grown from the ground up.

Finally, skills training is as important as technology and hardware.

Providing loans and hardware is only one part of the solution. Developing skills to run a business and maintain the products are an essential – though far less glamorous aspect – of the clean energy transition.

For example, we provided RFCare in the Rwenzori Highlands a US$2,000 loan to support the sale of cookstoves that create less air pollution than traditional models, as well as fuel briquettes and water filters. The loan also helped train young people in cookstove manufacture and repair and so far, the CBO has sold 1,800 stoves.

Entities like RFCare are staffed by passionate young people who are now exposed, more than ever, to the increasing innovation we see around today. If they are equipped with the technical or business expertise of running a clean energy enterprise, they are able to serve growing populations with solutions that fulfill our energy demands. 

Tackling climate change in Uganda provides essential lessons on how the continent can scale climate action, while also increasing access to clean energy products. Entrepreneurs are weighting in the wings – they just need the funding and the skills.  Local governments and funders must throw their weight behind supporting and scaling small and medium-sized clean energy businesses before it’s too late.

Marvin Tumusiime is the New Energy Nexus Uganda, Abundance Team Manager. This article was first published in Business Daily Africa as an op-ed.