California Startup Uses Solar Playbook to Lease Gas Power Plants
Concentric Power, a California-based startup is applying the Big Solar playbook to fossil fuels.
(Bloomberg) -- A California startup is applying the Big Solar playbook to fossil fuels.
Concentric Power raised funds to support $100 million of natural gas-fired generating systems it plans to offer to commercial customers using the same leasing model that companies including Sunrun Inc. and Tesla Inc. use for rooftop solar panels.
Concentric’s goal is to expand its customer base -- currently two local food processors -- to include everything from chemical plants to data centers. Leasing helped solar companies jumpstart the U.S. rooftop power industry by eliminating most or all of the up-front costs, and Chief Executive Officer Brian Curtis said the model will work with other types of generating systems.
“For little or no money down, they can get power plants deployed on their sites and can start saving money,” Curtis, 44, said in a phone interview. “I’ve got to give the solar guys a bunch of credit. They really figured out how to make this bankable on the back end.”
The solar industry experienced rapid growth earlier this decade after companies began leasing panels to homeowners and selling them power generated from their rooftops. Concentric Power wants to simulate that model for agricultural and industrial customers. Its cogeneration units have as much as 2.5 megawatts of capacity each and use excess heat to refrigerate buildings and provide other functions. The systems can help big electricity users reduce their reliance on the grid and can also serve as a backup for on-site wind and solar.
Concentric declined to name the institutional fund providing the financing. The Campbell, California-based company was founded in 2011 and has nine employees, Curtis said. It currently has two projects in operation, both at agricultural sites in California, and the financing will support as many as 35 more costing from $1 million to $40 million each.
“Historically, the way cogeneration projects get built is they’re all custom-engineered,” Curtis said. “There’s no reason why we can’t pre-engineer all this stuff. We know 90 percent of the answers before we even knock on the door of a customer.”
To contact the reporter on this story: Tim Loh in New York at tloh16@bloomberg.net.
To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Will Wade, Joe Ryan
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