Dive Brief:
-
Goldman Sachs Asset Management and Cleanhill Partners, a private equity firm, have acquired a majority stake in smart inverter supplier EPC Power, according to a Thursday announcement.
-
The transaction comes as the Inflation Reduction Act and other circumstances have EPC Power, which focuses on energy storage applications, poised for potentially rapid growth, company leaders said.
-
The growing involvement of major financiers in energy storage technologies suggests the sector has begun to come of age, according to Adam Kabulski, vice president of sales and marketing for EPC Power.
Dive Insight:
A North American supplier of utility-scale smart inverters is set for expansion with an influx of capital from Goldman Sachs and Cleanhill partners.
EPC Power said the deal will provide the financing it will need to capitalize on a post IRA-wave of growth amid ongoing supply chain concerns. Since the passage of the act, which created the first-ever federal tax credit for standalone storage projects, EPC Power co-founder and CEO Devin Dilley said the company has received a barrage of calls inquiring about their inverters.
“It’s too soon to translate into projects being put into the ground, but it’s very clear it will translate into a significant uptick in market activity in North America,” Dilley said in an interview.
EPC Power has so far managed to weather the supply chain disruptions triggered by Covid-19 and has been able to sell more than 2 GW of smart inverters globally, Dilley said. But with the influx of capital from Goldman Sachs and Cleanhill Partners, he said, EPC Power will be able to maintain larger inventories and weather future supply shocks. The company is also building a second manufacturing plant on the East Coast.
But the funding won’t be the only benefit to come from the acquisition, according to Kabulski.
One of the primary issues that has plagued smart inverter manufacturers, Kabulski said, is that utility-scale customers want to know they’re investing in a product that has the durability to match a renewable installation’s 20-year lifespan, and is backed by a company that will last at least that long as well. And to date, few companies have been able to clear that bar, Kabulski said.
“A company like Goldman Sachs adds stability,” he said. With their backing, he said, EPC Power can make the case that their company has staying power.
In a statement, Goldman Sachs Asset Management Managing Director Alexander Mass said that as the “only scaled supplier of smart inverters that are designed, engineered and 100% manufactured in the U.S.,” EPC Power represented the next logical step of their interest in clean energy.
“EPC Power is uniquely positioned to play a critical role in the evolution of the U.S. solar and energy storage value chains and is now well capitalized to continue its trajectory of rapid growth,” he said.
But the impact of the acquisition goes beyond EPC Power, Kabulski said. As bigger financial names invest in energy storage, he said, it also indicates that the energy storage sector has begun to mature and is ready for “prime time.”
“This is showing that energy storage is financeable, bankable, and that people can put a business case in it,” Kabulski said.
