Forget electric vehicles — stationary batteries are now capturing the buzz and investment in the United States. Startup Lunar Energy is the latest example of this trend. The six-year-old company, which builds battery packs for homeowners in California, Georgia, and Washington, announced it has completed two large funding rounds. The startup revealed it raised a previously unannounced Series C round of $130 million and a Series D round of $102 million. The Series C was led by Activate Capital, while the Series D was led by B Capital and Prelude Ventures.
Lunar Energy plans to use the funds to scale its manufacturing capacity to 20,000 units by the end of this year, before ramping up to 100,000 units by the end of 2028. In total, the company has now raised more than $500 million from investors.
Stationary storage has become a bright spot for battery manufacturers. This sector has gained importance following policy shifts after the Trump administration and a GOP-controlled Congress rolled back large parts of the Inflation Reduction Act, which had originally incentivized companies to build batteries in the U.S. for the automotive industry.
As the electrical grid strains under the weight of an increasingly electrified economy and booming data center demand, grid-connected batteries have become one of the most versatile tools for boosting grid resiliency. Lunar Energy can call on its fleet of batteries, which come in 15 kilowatt-hour and 30 kilowatt-hour modules, to deliver power to the grid when needed. The company’s virtual power plant software can also control EV chargers and appliances, allowing it to both supply power and reduce demand.
Such virtual power plants are expected to replace costly and polluting peaking power plants within a matter of years.
Competition in this space has been intensifying. Last October, Base Power raised $1 billion, less than six months after a $200 million round for its residential battery-based virtual power plant. Tesla also operates its own Powerwall-based virtual power plant.
Outside of residential settings, Tesla’s utility-scale storage business has been growing rapidly. Meanwhile, former Tesla executive J.B. Straubel’s startup, Redwood Materials, has launched its own energy storage division. Even Ford has announced plans to start a battery storage business to power data centers and the grid.
Batteries have transformed from minor players just five years ago into major assets for the grid. Their modular nature makes them quick to build and easy to deploy. While they remain costly compared to some fossil fuel power sources, their prices have been dropping quickly. It is no wonder investors are piling into the sector.