Powin ponders move from pink sheets

Powin Energy is looking to the Canadian market to scale new heights. Pic: Dennis F Larsen, Pixabay.

Powin Energy is looking to the Canadian market to scale new heights. Pic: Dennis F Larsen, Pixabay.

By Jason Deign

US energy storage developer Powin Energy is planning to de-list as an over-the-counter (OTC) or ‘pink sheet’ stock, Energy Storage Report has learned.

“I expect to stay public, but I don’t expect to stay on the pink sheets for much longer,” said Geoffrey Brown, Powin Energy’s president. “That’s not a particularly valuable place to be as a public company.”

Brown also said it was “critical” for the company to raise additional cash this year. “We need to improve our balance sheet to get more comfort with our customers, I know that,” he said.

He said the level of funding required was “probably higher” than the $5m-to-$12.5m target that Danny Lu, Powin Energy’s vice president of sales and marketing, disclosed last year.

“We’ve taken on additional debt from our sponsor,” Brown explained. “We need to retire some of that.” 

Investors looking to make larger bets

At the same time, he said, investors were looking to make larger, more strategic bets on energy storage companies.

“We talk to people and say, ‘hey, we need five [million],’ and they say, ‘well, what do you think about 40?’,” said Brown, who joined Powin Energy in April 2016 after a stint as director of microgrids at NRG Energy.

The fundraising would not be aimed at financing operations, he said. “We’re not selling below cost. We’re selling at what we need to be able to do to justify the business.”

The main objective, he hinted, would be to provide an exit for Powin Energy’s major shareholder, the Lu family, which has been bankrolling the business for the last five years.

Family patriarch Joseph Lu set up Powin Energy’s parent company, Powin Corporation, in 1989, and built it up into a manufacturing business producing more than 2,000 products and parts, according to OTC Markets. 

Merging under the Powin Energy banner

Last October, though, the two entities merged under the Powin Energy banner, signalling a firm bet on the energy storage market. So far, that bet appears to be paying off with a string of business wins in recent months.

Last November, for example, the company got the University of Washington to install a 30kW, 40kWh Powin Energy battery system at the Washington Clean Energy Testbeds centre as a “critical tool for research,” a press release said.

More significantly, last year Powin Energy also became one of the beneficiaries of the Aliso Canyon gas leak fiasco, with Southern California Edison commissioning a 2MW, 8MWh battery system that went live in January.

In May this year, Powin Energy followed this up with a 6.5MW, 26MWh project for San Diego Gas & Electric, said to be pending approval by the California Public Utilities Commission.

But the icing on the cake, announced this month, was a 12.8MW, 52.8MWh project spanning two sites in Ontario, Canada, on behalf of a project developer called Hecate Energy.

“A volume of history”

Hecate won the Ontario project in 2014, but after what Brown said was “a volume of history” it had still not selected a storage vendor until Powin Energy appeared on the scene at the end of 2016.

Powin and Hecate are now working to secure long-term financing for the project, which is due to be operational by September or October this year. “I’ve got batteries on the water,” said Brown. “We’re breaking ground now.”

The Ontario deal is notable for several reasons. It is Powin’s largest contract to date, and is also said to be the largest energy storage rollout in Canada. As with Aliso Canyon, the timeline for deployment is tight.

Assuming it can get the job done, this is exactly the kind of project that Powin needs as it looks to attract investors and move up the value chain.

Many would-be investors have satiated their appetites for energy storage in recent months. Others, meanwhile, may be wary of entering the fray following the collapse of promising start-ups such as Aquion.

Gaining access to the money left

Powin will have to work hard to gain access to the money that is left.

The company already has a clear cost-reduction roadmap, plotting 15% annual reductions on a current cost of USD$280 per kilowatt-hour for its integrated storage stacks.

It also has its own battery management system, which potentially ticks a software box that investors have a keen interest in.

In between win announcements this year, Powin also beefed up its top team with the addition of Craig Eastwood, a former corporate controller at the aviation services company Erickson, and Jan Jacobson, formerly of Stem.

Now Powin just needs to show that its recent rash of wins is not a fluke. Canada might just be the market to do this in. 

Characterising the value of energy storage

“The purpose of the original offering in 2014 was to characterise the value of energy storage so they can continue to run solicitations for services,” said Brown.

In other words, if Powin Energy does a good job on the Ontario project, it could help pave the way for growth in the Canadian energy storage market while confirming Powin’s position as a company worth investing in.

“That’s right,” Brown told Energy Storage Report. “No pressure.”

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