Dive Brief:

• Artificial intelligence-based energy storage company Stem announced plans to acquire solar asset management platform AlsoEnergy, creating what the companies say will be a "one-stop shop" to manage solar-plus-storage projects. 
• Boulder, Colorado-based AlsoEnergy offers software, grid edge monitoring and other services to solar power owners and operators. It manages approximately 32.5 GW of solar assets. Under the new partnership, that platform will be offered alongside Stem's energy storage optimization platform, with an eye towards eventually merging the platforms. 
• Larsh Johnson, Stem chief technology officer, said the merger will help both solar and storage operators manage their assets more efficiently, especially as operators are increasingly installing hybrid projects. "These hybrid assets… will be the fundamental approach to distributed resources, and our platforms and data will help customers and the grid [to] get the most out of renewable energy."

Dive Insight:

Stem's AI-based software is designed to allow storage owners to maximize their opportunities in the electricity market, finding optimal ways to deploy storage to lower peak use of electricity and dispatch it at the most profitable times. Johnson said that many of the company's customers who also had solar or hybrid projects were already using AlsoEnergy, which also provides advanced metrics and management for solar generation to reduce customer costs. 

That, Johnson said, made AlsoEnergy a natural partner to maximize the potential of solar-plus-storage installations. Stem Chief Strategy Officer Prakesh Patel added that the partnership will offer a valuable supplement to solar operators looking to install storage. 

"You need additional capabilities like our platform to support the economics of storage," Patel said. "Everything seems to be going in the direction of more data that makes better-integrated resources. When you look at it from that perspective, storage becomes the must-have solution."

A Lawrence Berkeley National Laboratory report from July found that about 17% of all U.S. battery storage capacity installed in 2020 was paired with solar, covering roughly 550 MW of battery capacity. Most of that was in the residential sector, where overall hybrid installations have grown year-over-year since 2016. The U.S. Energy Information Administration has predicted that storage could grow 10 times between 2019 and 2023 to contribute 10,000 MW to the grid, with much of that paired with solar or other renewable generation. 

Currently, 30% of AlsoEnergy's customers are also Stem clients, so Stem says the acquisition will provide opportunities to expand each market and leverage existing customer bases. The two platforms will be offered to existing customers, allowing them to take advantage of data collected from each side of the solar-plus-storage equation.

Johnson said that the data from AlsoEnergy's more than 41,000 customers in the commercial and utility space will be an asset to storage operators, who can better understand the particulars of storage across different technologies and environments. The result will be a "powerful combination" that can maximize the role of solar and storage on the grid, Johnson said, dispatching power when renewable energy generation is lower and demand is high or storing it at peak times. 

The $695 million purchase will be a mixture of cash and common stock. It also comes amid a flurry of action in the solar-plus-storage space; in the last two weeks, Shell announced the acquisition of solar-plus-storage company Savion, and KKR announced the launch of an investment platform focused on assets combining solar generation and battery storage.