Minnesota firm aims to store a small slice of power grid

  • Article by: DAVID SHAFFER , Star Tribune
  • Updated: February 4, 2013 - 11:44 PM

A Minnesota company, using conventional battery technology, is trying to sell electricity storage to utilities, businesses and homes.

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John Frederick, CEO of Silent Power, said the Baxter, Minn., company’s goal is to sell 500 battery storage units this year.

Photo: BRIAN PETERSON, Star Tribune

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A Minnesota company backed by the world’s No. 3 solar panel manufacturer is aiming to sell electric utilities a small-scale solution to a big problem.

Silent Power of Baxter, Minn., manufactures a refrigerator-sized cabinet full of batteries and circuit boards that the company’s CEO, John Frederick, says can store and deliver electricity when it’s needed, such as on hot summer days when power demand peaks.

“2013 is the year we go out of pilot [stage] and into deployment,” Frederick said of the 10-year-old company, whose technology also faces a critical test.

Storing power in batteries, even relatively small ones, the company says, could help address utilities’ need to produce extra electricity when demand spikes. The company’s technology also is marketed as a solar power accessory and an alternative to small generators for people who need uninterrupted power.

Four Minnesota electric cooperatives recently began installing Silent Power’s OnDemand Energy Appliance at 16 locations, typically in customers’ garages, to study whether they make economic sense. The project is partly funded by the U.S. Department of Energy.

“We are trying to figure out the business case and what the break-even point will be,” said Ryan Hentges, vice president of corporate services at Minnesota Valley Electric Cooperative in Shakopee, which has installed two Silent Power units and will add four more.

The units’ batteries can be charged when excess power is available at low wholesale rates, such as at night. The batteries are drawn down when demand is high or when power is interrupted.

The technology also works with solar-electric panels, storing their daytime output and allowing the panels to keep generating during a grid outage. That explains why the giant Korean company, Hanwha SolarOne, purchased a 51 percent stake in Silent Power for $8 million last July.

Hanwha says it will market Silent Power’s technology under the “Sun Bank” label in Hanwha’s U.S. solar product lineup. That could open a broader market to the Minnesota company. Hanwha did $136 million in U.S. business in 2011, the last year for which full-year data are available.

At maximum output, a Silent Power unit offers electricity at a home or business for two or three hours, a configuration that could help utilities during times of peak power demand. For uninterrupted backup, a unit can supply power for eight to 24 hours to critical circuits. In solar applications, a Silent Power unit also takes the place of a device that converts direct current from the panels to usable alternating current.

The units cost about $10,000 and up. For more storage, multiple units can be combined.

By contrast, Xcel Energy’s giant $4.7 million grid-connected battery in Luverne, Minn., can power hundreds of homes for several hours.

“We were looking for a company that already had some traction,” Henry Yun, Hanwha’s vice president of strategic business development, said of the decision to invest in Silent Power.

He said one of Silent Power’s appeals was that its technology is approved by Underwriters Laboratory, an independent safety testing organization. Yun, who is based at Hanwha’s U.S. headquarters in Santa Clara, Calif., serves on Silent Power’s board.

Hanwha also has a minority stake in TenKSolar, a Bloomington-based solar panel manufacturer, and Yun sits on that company’s board, too. He said the investments in two Minnesota companies were not directly related to each other, but reflect “a very strong belief in American innovation.”

TenKSolar and Silent Power don’t market their technologies jointly, though they are compatible and have been installed together.

Frederick said Silent Power’s goal is to sell 500 battery-storage units this year. Over the past two years, fewer than 100 have been sold, mostly for demonstration projects by California and Minnesota utilities, he said. The privately held company does not report revenues, but Frederick said it has not yet turned a profit. It has 21 employees, he said.

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  • The Wright-Hennepin Cooperative is among four state electric co-ops testing Silent Power’s technology.

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