Modular Energy Storage Systems

Published on 2023-08-14

Startup Story

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VoltWALL: A modular energy storage solution challenging Tesla's Powerwall. With its lightweight design, enhanced safety features, and competitive pricing, VoltWall is set to revolutionize the energy sector.

Approximately a decade ago, my journey began when I embarked on the construction of my electric vehicle. Coincidentally, around the time of completion, Tesla made a significant announcement introducing the Tesla Powerwall—an energy storage system unrelated to their automobiles. 

This development prompted me to realize two crucial factors. 
Firstly, energy storage represented the future of sustainable power utilization. Secondly, the components I had incorporated into my electric car's framework coincided with the underlying principles of an energy storage system. All that remained was to encapsulate the technology within a compact enclosure, thus birthing a potential competitor to the Tesla Powerwall.Acting upon this realization, I successfully packaged the technology and commenced engaging with our natural allies—the photovoltaic system installers responsible for mounting solar panels on residential rooftops. As we are aware, solar energy exhibits exceptional efficacy during daylight hours. However, when confronted with nocturnal or overcast conditions, the absence of energy storage becomes problematic.

Consequently, this particular market segment plays an integral role in resolving such energy availability challenges. Notably, this sector has been experiencing a remarkable annual growth rate of 33%. In discussions with the installers, they concurred with our assessment. While they held great admiration for the Tesla Powerwall, they voiced several concerns. Their endorsement hinged upon our ability, as a collective, to address these concerns satisfactorily.

Foremost among the installers' apprehensions was the unwieldy nature of the Powerwall. Weighing over a hundred kilograms and boasting a 13.5-kilowatt-hour capacity, Tesla's offering occupied a substantial physical footprint. Exceeding one meter in both width and height, its cumbersome nature necessitated a team of four individuals for handling and installation.
Understandably, the installers found this aspect unfavorable. Although they recognized the product's merits, the associated installation costs were prohibitively high. Furthermore, Tesla's direct-to-customer sales approach denied the installers any product margin. Their remuneration is solely derived from installation fees, with no additional benefit.

The installers also expressed a desire for enhanced safety measures, more competitive pricing, and an extended product lifespan. Collaboratively, we diligently addressed each of these areas, culminating in the development of our second-generation product, known as xBlade. xBlade is a modular system, featuring a 1.2-kilowatt-hour module weighing a mere 20 kilograms.

Relatively speaking, 20 kilograms presents negligible weight for these proficient installers. Consequently, they can effortlessly transport multiple modules in their vans, tailoring the energy storage capacity to meet each customer's unique requirements. This flexibility contrasts starkly with Powerwall's inflexible offering, which mandates a minimum 13.5-kilowatt-hour capacity. 
Moreover, our modular design offers an additional advantage. In the event of a malfunction, only the faulty module necessitates replacement, unlike the monolithic structure of the Powerwall, which would demand complete unit substitution.

Now, why do we position ourselves in comparison to Tesla rather than other competitors? 
The market segmentation can be divided into two categories: active thermal management and passive thermal management. Tesla and our company stand as the sole representatives within the active thermal management section, while other alternatives pursue divergent methodologies that render precise control over thermal parameters an arduous task. 

For instance, these alternatives fail to operate effectively in environments experiencing heavy snowfall or extreme heat, resulting in functional incapacitation. In contrast, our immersive thermal management system employs an inert liquid medium, submerging all cells within its confines. This arrangement ensures complete isolation from the surrounding atmosphere, effectively neutralizing the risk of fire propagation due to oxygen deprivation.

By addressing the weight concerns and implementing comprehensive fire safety measures, we have successfully resolved crucial issues. Additionally, our utilization of liquid LFP (liquid ion phosphate) cells contributes to the product's extended lifespan. With triple the safety level and longevity compared to conventional liquid ion cells, our offering boasts an exceptional longevity.
The physical construction of each module comprises an aluminum tube, which serves as both a heat dissipation mechanism and a heating element. Remarkably, our patented methodology permits the incorporation of numerous modules, offering unparalleled scalability.

An additional concern raised by the installers pertained to pricing. They sought a more competitively priced alternative, affording them greater margins per kilowatt-hour. The Tesla Powerwall is priced at approximately 950 euros, whereas our product is available at 650 euros per kilowatt-hour. This pricing disparity empowers installers to exercise greater flexibility in determining their profit margins or installation fees.

By successfully addressing each of these crucial points, we have garnered the installers' utmost satisfaction. Consequently, we have transitioned from a product seeking a market to possessing a remarkable market presence. Our primary focus now lies in the widespread deployment of our offering.

The Advantages of Modularity: Feedback from Installers and Clients

The installers have provided us with positive feedback, mainly because they were actively involved in the design process. It's like asking someone what they want for lunch and then creating a menu based on their preferences. Ultimately, their satisfaction is paramount. 
However, the pilot sites have been invaluable in terms of learning and improvement. Assembling and installing the product in real-world scenarios has been a valuable learning experience. We are currently in the process of developing the industrialized version, which will significantly reduce costs. For example, it currently takes us about an hour to assemble one unit, but with the industrialized product, it will take only 15 minutes.

The feedback we have received so far is that the product is excellent, and our price point has been well-received. However, we do face a challenge because, at the current price, our profit margins are limited. While the product can be priced at that level from a bill of materials perspective, we are owed most of that due to the prototype stage. Once we have the industrialized and certified product, we can roll it out to end users.

I recently visited one of our pilot sites in Scudo di Stabio, near Lugano, Switzerland, where I participated in a round table meeting. This particular building is significant as it was the first in Switzerland to be constructed entirely for renewable energy. We were chosen as the supplier for the energy storage system. The feedback from the meeting was positive, as they analyzed the energy flows and the performance of the solar panels. Although our focus is on batteries, they appreciated the flexibility of our modular system. They will be able to analyze their energy needs over the past 12 months and determine if additional modules are required. This flexibility is not possible with competitive products, as each module typically has a fixed capacity, making it impractical to add small increments of energy storage.

Overall, the feedback we have received aligns with our expectations. This is not just a concept developed in a lab; it has been tested, refined, and rebuilt in the market to meet the specific needs of our customers.

A dynamic startup with diverse expertise

I'm an electronics engineer and the inventor of the product, I actually spent 40 years of my career in the commercial space. I was deeply involved in Australia during the inception of the PC industry and witnessed its early stages. This experience equipped me with valuable insights, enabling me to identify the opportunity that emerged a decade ago. 

Initially, when I shared my vision with others, including fellow business people, they dismissed it, believing I was envisioning a far-fetched concept of selling energy storage systems. While I primarily present myself as the R&D person within the company, my background leans more towards commercial pursuits, encompassing country management, marketing management, and product management. However, as an electronics engineer with a profound passion for electric cars, I recall my childhood fascination with small racing cars and their simple yet powerful electric motors. These memories sparked a dream: one day, I would construct an electric car. Eventually, the opportunity presented itself, and I fulfilled that dream. Nonetheless, despite my visionary ideas and inventive thinking, I lack the technical design expertise required to bring these concepts to life. I'm not a chemistry expert, nor an electronics guru. This is where our team's specialized skills come into play.

Our team includes individuals who specialize in software development and the implementation of Canvas, a standardized interface between our battery modules and the inverters found in different systems. Typically, companies rely on third-party entities to undertake this work, but we have internal expertise to ensure a seamless integration. Additionally, we have our own electronics hardware engineer. Maurizio, a member of our team, comes directly from the installer base, providing valuable networking and training support. We certify our installers, although we currently have only two. In our first year, we will require less than 200 installers, even as we anticipate reaching a 200 million mark in four years. This is because our business model is based on a one-to-one-to-many approach. 

We operate as a B2B company, partnering with other businesses that already have a customer base consisting of thousands of solar panel owners. Over time, these customers will transition to energy storage, creating a logical progression. 

As I say, you can see that I navigate between the technical and commercial aspects, as I've immersed myself in both realms. However, none of this would be possible without the dedicated individuals who transform my ideas into reality. They possess a comprehensive understanding of the industry and bring my concepts to life through their expertise and execution.

Overcoming challenges: prototyping, fundraising, and technical development

We faced several challenges along the way. Firstly, we realized that there is a significant difference between conceptualizing a product and actually building it right the first time. While our prototype seemed close to the finished product on paper and in design, assembling the system with pumps, heaters, tubes, pipes, and wires within a confined space proved to be a complex task. Personally, I invested time in assembling the product myself, and through this hands-on experience, I learned a great deal. I discovered that various efficiencies could be implemented to streamline the process. Surprisingly, I found that our initial prototype (Version 0 of xBlade) and the subsequent version (Version 1 of xBlade) were quite different in terms of mechanical assembly, although externally and electronically they appeared the same.

Another challenge we encountered was related to obtaining support and funding. When sharing our product vision with potential investors, especially in the early stages about nine years ago, we faced skepticism and doubt. Some questioned the viability of our business based on the success or failure of Tesla at that time. People would say, "Just because Tesla is doing it doesn't guarantee your success; in fact, it's more likely that you will fail." Tesla was heavily criticized and one of the most shorted companies across industries. Hence, getting others to understand our vision, which seemed like a fail-safe concept in our eyes, proved to be challenging. 

As time passed, we faced additional hurdles, such as the presence of other players in the market who emerged after we started, causing some to question our timeliness. As a small startup trying to break through, it can be frustrating when communicating with investors who must be cautious about making sound investments on behalf of third parties. While their caution is justified, it added to the difficulties we faced

Furthermore, being a hardware-based business rather than a software one presented additional challenges. Hardware investments receive only a small portion of available funds, making it challenging to secure adequate financial support. However, despite these obstacles, we successfully raised funds and progressed to the pilot site stage, with paying pilot sites validating our solution. 

Currently, we are focused on industrializing our product for rollout, and we are actively seeking serious funding to support our expansion. The nature of being a hardware product necessitates significant cash flow funding, as each month's growth requires resources that cannot always be covered by the previous month's funds. Additionally, our payment terms typically require us to receive payments within four to five days, adding to the importance of cash flow management.

We have faced numerous technological challenges, and they continue to arise. However, the excitement of working with technology lies in finding unexpected solutions to seemingly insurmountable problems. It's about progressing despite the odds. 
Even in my previous commercial experiences, I viewed businesses as projects that require finding solutions with the resources at hand, often against all indications of failure. 

Ultimately, it is the people involved who save the day. Technology and tools are available to all, but it is the individuals who think differently, are led differently, and approach problems with unique perspectives that drive success. We believe that our differentiation and innovative thinking will lead us to success. While others focus on building heavy, cumbersome energy storage solutions, we have taken a different path by listening to our industry partners and tailoring our product accordingly. We are confident in our approach and believe it sets us apart.

The future market expansion and target focus

Switzerland has served as our testing ground throughout the development process. We designed and installed the product there, working closely with local installers. The Swiss market offered us the opportunity to make mistakes and learn from them due to its manageable size. Now, our expansion plans include other European countries such as Germany, and we have a team member based in the United States who will facilitate our entry into that market. Additionally, we aim for a massive rollout.

Initially, our focus is primarily on the residential sector. The modular nature of our product makes it equally suitable for residential and industrial applications. While our pilot sites include both residential and industrial installations, at this stage of our startup, it is more logical for us to concentrate on 12 to 20-kilowatt hour installations rather than larger ones exceeding 100 kilowatt hours. Our largest installation to date consists of 30 kilowatt hours, utilizing 26 modules. We have the capability to handle industrial installations, but our immediate focus lies in the rapidly growing residential market. However, we remain open to industrial opportunities while considering the financial aspects. Managing the liquidity required for industrial installations, which often reach megawatt-hour scales, would be quite challenging for us at this stage.

About the author

Aldo Grech

Founder of voltWALL