Arcadia Power Secures $25 M Series B, Grows Community Solar Pipeline

 “Digital utility” startup Arcadia Power announced a $25 million fundraising round on Thursday and a 120-megawatt community solar pipeline through 2020.

The expanded pipeline builds substantially on Arcadia’s suite of clean energy options available to customers who subscribe and pay utility bills through its online platform. In 2016, Arcadia had 250 kilowatts built, 2 megawatts of solar pipeline and hundreds of subscribers. Now, its 120-megawatt pipeline is backed by more than 175,000 members in all 50 states.

“The original idea of the company hasn’t changed,” said CEO Kiran Bhatraju. “There’s a discovery and a conversion problem that we could solve if we created software that made it super simple, as easy as a transportation app to just log on, sign up and get access to all the different programs in your market.”

In addition to the funding, Arcadia also said it will add Opower founder and President Alex Laskey, G2VP partner Ben Kortlang, and Enron, Viridity and Invensys alum Dan Leff to its board. G2VP led the round with the McKnight Foundation, ValueAct Spring Fund, Energy Impact Partners, Cendana Capital, Wonder Ventures and BoxGroup contributing, along with the company’s existing investors.

 According to Bhatraju, the funds will go toward “building new, innovative ways to manage our customers’ demand,” as well as adding engineering and data science staff.   

The company is working with smart home technology companies, utilities and competitive energy demand response markets like virtual net metering to utilize the flexible demand of its subscriber base. By subscribing to Arcadia’s platform, users gain access to wind and solar energy, as well as efficiency programs that they can use without leaving their utility.

Aside from innovating the traditional utility model — Arcadia works with over 100 utilities nationwide — the company is also working to undercut some of the issues plaguing community solar.

“I think one of the things we bring to customers is convenience. I think that’s something that’s missing in this market; it’s just overly complicated,” said Bhatraju. “Clean energy should be easy. The delivery and conversion of this stuff should be super simple — and it should all be housed under one bill for the customer.”

The conventional structure of community solar bills, with customers receiving their regular utility bill plus an additional community solar bill, has been cause for confusion and has potentially slowed adoption.

Michelle Davis, a senior solar analyst at Wood Mackenzie Power & Renewables, said Arcadia’s intuitive billing could give the company an edge in customer acquisition.

“If community solar program developers want to really scale and grow their business, they’re going to have to wrestle with making these offerings more clear and more streamlined for customers to understand,” said Davis.

She noted that Arcadia’s rejection of cancellation fees and long-term contracts, which can also steer away potential consumers, is another “novel” departure from its peers in the community solar market.

The company plans to deploy 35 megawatts of solar in 2018 and add between 60 and 60 megawatts of its 120-megawatt community solar pipeline next year. But Arcadia said demand is increasing even beyond that.

“We now have more members in community solar markets than solar developers can keep pace with,” said Bhatraju. “The demand is now there, the technology is now there and we need the supply.”

“We are now at a huge tipping point for our business and the residential community solar market,” he added.   

Arcadia said it ultimately aims to act similarly to the team of clean energy concierges securing renewables for huge companies like Google and Amazon, but with services geared for the average person renting an apartment.

Though Davis noted that the early stages of Arcadia’s projects have not fully proven the efficacy of its potential advantages with customers, she said the model has the capacity to ease the learning curve for consumers entering the community solar market.

“If they execute on that, they’ll be in a good place in the competitive landscape,” she said.