SonnenBatterie

A target list for alternative energy investment should include energy storage developer Sonnen GmbH (private).  Its storage systems are aimed at homes and small-business where solar power can serve as either primary or backup power.  The Sonnen system is fully integrated with a battery module, power inverter, power management unit and meters for feeding power into the electric grid.  In addition to solar power, the system can be combined with wind turbines and even heat pumps.  Sony’s lithium ion phosphate batteries are used for the battery element.

The company began selling the SonnenBatterie in its home market Germany.  The company has since expanded to other parts of the European Union, the United Kingdom, the United States and Australia.  As a private company Sonnen’s financial performance is sketchy.  Reportedly, the company earned 42 million Euro in sales in 2016.  By the end of 2016, the company had shipped over 15,000 SonnenBatterie systems, having reached a pace of 1,000 units sold per month.

Compared to battery behemoths such as Panasonic or Tesla, Sonnen is a small-fry.  That has not deterred major investors from taking a stake in Sonnen.  In October 2016, Sonnen raised 76 million Euros (US$82 million) from a selection of leading venture capital firms.  Several venture firms that had participated in previous finding rounds, jointed in again, including eCapital (Germany), Munich Venture Partners (Germany), Chrysalix SET (The Netherlands), Inven Capital (Czechoslovakia) and GE Ventures (United States).  The most recent round also brought in Envision Energy, the Chinese wind turbine manufacturer. 

Strategic investors like Inven, GE and Envision were critical wins for Sonnen.  What has attracted these key players to Sonnen is the ability to aggregate numerous power generators to the network.  Sonnen has developed an energy services network based on block chain technology.  They call it SonnenCommunity and it allows customers to trade their power with one another.  This reduces dependence upon power from the central producers from the grid.  Peer-to-peer sales should reduce overall power costs.  Sonnen engineers have found that small, aggregated assets like its behind-the-meter Sonnenbatterie can be just as effective as large utility-scale batteries as long as the service is fast in responding to power requests by users on the network.

Sonnen appears to be ahead of Tesla in the United States.  Tesla has had a demonstration of peer-to-peer services underway in Vermont where Tesla has partnered with Green Mountain Power.  Tesla’s Powerwall 2 and its GridLogic software platform are the basis for a home energy solution that provides renewable backup power.  At the end of 2017, Tesla and Green Mountain had installed100 Powerwall units in Vermont. This is just 5% of the targeted 2,000-unit goal set by Green Mountain.

Over the last year there has been considerable speculation that Sonnen GmbH would undertake an initial public offering.  With its stable of venture capital investors which are likely looking for a lucrative exit, an IPO might have considerable appeal.  There has even been some discussion of a U.S. offering, making Sonnen a very appealing name to put on any investor’s watch list.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.