Swell Energy, a company specializing in the installation and management of residential renewable energy, energy efficiency solutions, and energy storage technologies, is securing $450 million in funding to support the construction of four virtual power plants. These plants will represent a substantial increase in energy storage capacity, working in conjunction with solar power generation.

This development highlights the increasingly decentralized approach to renewable energy, shifting away from traditional large-scale power generation facilities that feed into utility grids and toward localized, targeted solutions implemented directly at the points where energy is used.

The initiative will integrate 200 megawatt hours of distributed energy storage with 100 megawatts of solar photovoltaic power, according to the company’s announcement.

Swell, headquartered in Los Angeles, has been contracted by utility companies across three states to build and aggregate approximately 14,000 solar energy generation and storage systems, creating dispatchable energy storage capacity. The primary objective is to enhance the efficiency of local power grids.

To fund these projects, as well as future endeavors, Swell has established a financing partnership with Ares Management Corp. and Aligned Climate Capital, creating a dedicated virtual power plant financing vehicle with a $450 million target.

This financing structure will provide support for the development of combined solar and battery power projects throughout the country.

Looking ahead over the next two decades, Swell aims to facilitate the development of over 3,000 gigawatt hours of clean solar energy production. Customers will be able to store 1,000 gigawatt hours of this energy for later use, and 200 gigawatt hours will be dispatched back to the utility grid.

This has the potential to build a more dependable grid, reducing vulnerability to power outages and rolling blackouts experienced in areas like California.

“Utilities are placing increasing value on distributed energy resources as essential ‘grid edge’ assets,” stated Suleman Khan, CEO of Swell Energy. “By connecting individual homes and businesses into virtual power plants, Swell can lower the overall cost for customers and assist utilities in managing electricity demand. Through receiving GridRevenue from Swell, customers involved in our VPP programs can lower their expenses for solar energy generation and storage, and potentially lessen the chance of local power disruptions, ensuring a reliable power supply for their homes and businesses.”

In addition to launching the virtual power plant financing vehicle, Swell is also offering homeowners a financing option for their home energy systems. Securing homeowner participation is crucial for the success of these power plants, and homeowners can benefit financially by contributing excess power back to the grid.

This represents a beneficial outcome for the company, its customers, and early investors such as Urban.us, who initially invested in the company.