ClearEdge Power—a leading manufacturer of scalable, high-efficiency stationary fuel cells—announced today that it has raised $73.5 million in Series E financing through the sale of new shares and the conversion of previously issued promissory notes.
The financing, which ranks among the largest clean-tech investments of the year, to date, will be used to advance customer adoption in key commercial markets, expand internationally, and develop and commercialize new products.
New investor, Artis Capital Management of San Francisco led this round, which also included Güssing Renewable Energy of Austria ; Southern California Gas Company, a regulated subsidiary of Sempra Energy of San Diego; and existing investor Kohlberg Ventures of Portola Valley, California.
“As a leading producer of distributed generation solutions for light commercial applications, ClearEdge Power is changing the way businesses across the world get their energy,” said ClearEdge Power President and CEO Russell Ford. “This new investment provides the capital necessary for ClearEdge Power to build on our already strong foundation by entering new markets, advancing our technology, and commercializing new products.”
ClearEdge manufactures fuel cells that run on natural gas, which is then broken down into a hydrogen-rich gas. The natural gas mixes with oxygen in the fuel cell—inducing a chemical reaction that generates both electricity and heat within the cell. Therefore, the fuel cells can be used in commercial power and heating applications — such as keeping a hotel hot during the winter; or heating water, instead of requiring a separate water heating source.
The fuel cells plug into a typical power grid, but there are plans to make them independent of a power grid, the company said. Each is about the size of a refrigerator, costs around $56,000, and generates 5 kilowatts (kW) of power and 5.8 kilowatts of energy in the form of heat — so it’s a little impractical for typical residential owners.
“We’re still interested in high-end residential cells — a 5,000 square foot house or larger,” Mike Upp, vice president of Marketing for the company, told Venture Beat. “Those are our early customer;, but the main focus is light commercial or institutional customers, like schools or businesses.”
According to a recent report by Pike Research, in the last two years, the stationary fuel cell industry has seen a 27 percent compound annual growth rate. Among the reasons: Technology costs are continuing to fall, new companies are coming into the space, and adoption is gathering steam in markets such as uninterruptible power supplies (UPS), combined heat and power (CHP), and residential power.
Scalable solutions such as ClearEdge are primed for significant growth, according to the white paper, Stationary Fuel Cells. In fact, the clean technology market intelligence firm estimates that sales for the sector will surpass 1.2 million units annually by 2017.
“The fuel cell industry is reaching an important tipping point and, over the next 18 months, a clear gap will begin to emerge between companies that have strong products and clearly defined markets, and those that do not,” said Dr. Kerry-Ann Adamson, Research director, Pike Research (News - Alert). “In the recent Pike report, ClearEdge Power scored very highly. The company’s score was due to ClearEdge Powers’ combination of market strategy and ability to execute to meet demand. ClearEdge Power also clearly differentiates its product offering (hitting a real power demand sweet spot), enabling it to reach many verticals with one product.”
ClearEdge recently secured a $2.8 million grant from the U.S. Department of Energy that gave the company capital to install 10 fuel cells at businesses in Oregon. The funding came from the U.S. Department of Energy’s Pacific Northwest National Laboratory (PNNL), which will monitor the fuel cells to see if they are producing the kind of energy savings expected for the businesses that purchase them.
“Combined heat and power fuel cell systems can help smaller commercial buildings with high-energy demands reap significant savings in energy cost and use,” said Mike Rinker, the Research Program manager at PNNL. “We anticipate that this type of a system could reduce the fuel costs and carbon footprint of a commercial building by approximately 40 percent, compared with conventional electricity and heat.
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Cheryl Kaften is an accomplished communicator who has written for consumer and corporate audiences. She has worked extensively for MasterCard (News - Alert) Worldwide, Philip Morris USA (Altria), and KPMG, and has consulted for Estee Lauder and the Philadelphia Inquirer Newspapers. To read more of her articles, please visit her columnist page.Edited by
Rich Steeves
