Energy storage technology like Goldman Sachs, partner holds majority stake in EPC Power

Dive Brief:

• Goldman Sachs Asset Management and private equity firm Kleinhill Partners have acquired a majority stake in smart inverter supplier EPC Power, it announced Thursday.

• The deal comes on the heels of the Inflation Act and other factors that could fuel EPC’s rapid growth focused on energy storage applications, company leaders said.

• Adam Kabulski, APC Power’s vice president of sales and marketing, said the growing involvement of major financiers in energy storage technologies shows that the sector is coming of age.

Dive Insight:

A North American supplier of utility-scale smart inverters is set to expand with a capital infusion from Goldman Sachs and Kleinhill Partners.

According to EPC Power, the agreement will provide the necessary financing to take advantage of the ongoing supply chain risks in the post-IRA-storm phase of development. Devin Dilley, founder and CEO of EPC Power, which created the first federal tax credit for standalone storage projects since the law was passed, said the company has received many calls asking about inverters.

“It is too soon to translate into projects going into the ground, but it is very clear that it will translate into a significant increase in market activity in North America,” Dilli said in an interview.

EPC Power has so far weathered supply chain disruptions triggered by Covid-19 and has sold more than 2 GW of smart inverters globally, Dilli said. But with capital inflows from Goldman Sachs and Kleinhill Partners, EPC Power said it would allow it to maintain large inventories and weather future supply shocks. The company is building a second manufacturing plant on the east coast.

But the money will not be the only benefit from the purchase, according to Kabulski.

One of the main issues troubling smart inverter manufacturers, says Kabulski, is that utility-scale customers want to know they’re investing in a sustainable product to match the 20-year lifespan of a renewable installation, and at least a company that will last that long. And so far, few companies have been able to clear that bar, Kabulski said.

“A company like Goldman Sachs adds stability,” he said. He said that with their support, EPC Power can present the case that his company has the power to stay.

In a statement, Goldman Sachs Managing Director of Asset Management Alexander Maas said that EPC Power represents the next logical step for those interested in clean energy, “the only supplier of smart inverters that are designed, engineered and 100% manufactured in America.” .

“EPC Energy is uniquely positioned to play a critical role in the evolution of the US solar and energy storage value chains and is now well-positioned to continue its rapid growth trajectory,” he said.

But the impact of the purchase goes beyond EPC’s power, Kabulski said. With big financial names investing in energy storage, he said, this shows that the energy storage sector is starting to grow and is ready for “prime time”.

“This shows that energy storage is financeable, bankable and that people can make a business case,” Kabulski said.