a16z Invests $200M in Base Power for Home Backup Batteries

Base Power's Rapid Growth and Expansion Plans

Within a year, Base Power has transitioned from a relatively unknown startup to a significant operator of battery fleets within the state of Texas.

The company has recently secured $200 million in funding to facilitate a swift expansion of its operations.

Funding Details and Investors

This Series B funding round was spearheaded by Addition, Andreessen Horowitz, Lightspeed Venture Partners, and Valor Equity Partners.

Additional participation came from investors including Altimeter, Terrain, Thrive Ventures, and Trust Ventures.

A New Approach to Battery Storage

While backup batteries aren't novel – Tesla’s Powerwall has been available for nearly ten years – Base Power is innovating the existing model.

Their batteries are notably larger, offering capacities of 25 or 50 kilowatt-hours, which is almost double or quadruple the capacity of a single Powerwall.

Cost-Effective Solutions

Base Power distinguishes itself through pricing, charging only $595 or $995 upfront, depending on the chosen capacity.

This contrasts sharply with the Powerwall, which typically costs around $15,000 or more before any incentives are applied.

Service Agreement Details

Customers are required to enter into a three-year electricity supply agreement with Base Power.

The rate is set at 9 cents per kilowatt-hour, in addition to standard delivery fees charged by the local utility.

An annual fee, ranging from $225 to $345, is also applicable, adding approximately 2 cents per kilowatt-hour for the average Texas household.

Grid-Balancing Revenue Streams

A significant portion of Base Power’s revenue is likely derived from grid-balancing operations.

Texas’ unique power market structure allows the company to receive substantial payments for utilizing its installed batteries to supply electricity back to the grid.

Building a Virtual Power Plant

By deploying residential batteries, Base Power has established a rapid method for constructing a large-scale battery fleet, often referred to as a “virtual power plant.”

While Texas is witnessing growth in large, grid-scale battery facilities, these projects typically require years for planning, permitting, and construction.

Rapid Deployment and Growth

Residential battery installations, however, can be permitted and completed within weeks.

Base Power installed 10 megawatt-hours in March, as stated by co-founder and CEO Zach Dell to Canary Media.

The company anticipates reaching the 100 megawatt-hour milestone sometime this summer.

Future Plans and Manufacturing

The newly acquired funding will be allocated to accelerating installations and expanding operations into new states.

Furthermore, it will support the commencement of construction on a domestic battery factory in the U.S.

This venture aims to mitigate the risks associated with tariffs but also introduces new challenges, as establishing successful battery manufacturing facilities has proven difficult for other companies.