As costs for the physical hardware that converts renewable resources like wind, sunlight, and water power into electricity come down, the biggest source of savings will be in the software managing that hardware revolution.
That's the thesis behind Powerhouse Ventures, the investment fund led by longtime climate investor, Emily Kirsch, which just raised $70 million to back the companies that will manage the next energy revolution.
The firm's backers include some of the biggest names in energy, finance, mobility, and technology -- companies like Credit Suisse, Constellation Energy, Microsoft, Total Energy, and Toyota -- along with individual investors who were at the forefront of the green revolution. These are people like the founders of SunRun and SunPower, the former CEO of NRG Energy, and the CTO of Tesla.
"Everyone who has built this industry has come back and said I’m here to support the next generation of billion dollar companies," Kirsch said.
"It will be digital technologies that are poised to transform how [solar and wind] are financed, developed and operated," says Kirsch. And those are the technologies her firm was formed to back.
For Powerhouse Ventures, the most important buckets for investing are finance and deployment, asset management and optimization, and market access and participation.
The firm invests in technology companies developing better monitoring and management tools to support the buildout of renewable power and clean industry.
So far, Powerhouse Ventures has made 26 investments and its focus has been on the businesses that help making businesses run better.
Portfolio companies include Recurrent, which provides battery monitoring and management software for electric vehicles, the community solar development startup, Solstice; Nithio, which provides financing for off-grid renewable power development in Africa; and Sust Global, which transforms complex climate data into granular financial signals with best-in-class data integration into customer workflows.
The firm invests anywhere from $200,000 to $2 million in seed stage businesses and with the increased size, the firm hopes to take larger stakes in the companies it backs.
As the next wave of energy looks to be increasingly software-defined, expect to see the companies in the Powerhouse Ventures portfolio take an outsized role in the climate-saving technologies of the future.