Base Power avoids grid bottlenecks with home batteries

What happened?

Base Power, a startup founded in 2022 by Justin Lopas and Josh Crawford, has developed a business model that combines home batteries with grid services. Instead of building large storage facilities that must wait years to connect to the grid (especially in the congested PJM queue), the company installs batteries in customers' homes for free, in exchange for accessing them to sell energy to the grid during peak demand. Customers get energy backup and lower electricity rates.

Why is it important?

The U.S. power grid, especially in Texas (ERCOT) and the PJM region, faces massive bottlenecks: more than 1,200 gigawatts of solar and wind projects are waiting in the PJM interconnection queue, with delays of up to 5 years. Base Power avoids this problem by connecting its batteries at the point of consumption: the home. This not only accelerates deployment but also reduces the need for new transmission lines and backup power plants. Additionally, it democratizes access to backup energy, which is typically expensive.

The historical context is relevant: PJM's interconnection queue has skyrocketed since 2018, when there were barely 200 GW waiting. Now it exceeds 1,200 GW, equivalent to the entire installed generation capacity in the U.S. (according to data from Lawrence Berkeley National Laboratory). This is due to grid saturation and study processes that have not kept pace with applications. Base Power bypasses this bottleneck by connecting on the customer side, where regulation is more agile. In Texas, ERCOT has allowed aggregation of distributed resources since 2021, which has facilitated the model.

The impact on the energy market is significant: according to a Brattle Group report, distributed resources like residential batteries could save U.S. consumers up to $15 billion annually in grid costs by 2030. They also reduce the need for peaker plants, which are expensive and polluting. In Texas, during the winter storm Uri in 2021, outages left 4.5 million homes without electricity; home batteries could have provided critical backup. Base Power positions itself as a solution to such events, which are becoming more frequent due to climate change.

What consequences will it have?

If Base Power scales, it could transform the energy storage and grid services market. Grid operators (like ERCOT) would gain flexibility without large infrastructure investments. Traditional electric utilities would see their business model eroded, especially those reliant on transmission and distribution revenues. Consumers would benefit from lower bills and greater reliability. However, the model depends on penetration in single-family homes, limiting its reach in dense urban areas. There are also regulatory risks: public utility commissions could challenge the sale of energy from home batteries, as already happened in California with the NEM 3.0 rule, which reduced incentives for residential solar.

Comparison with previous events is illustrative: in 2020, Sunrun launched a similar program in Massachusetts, but with a monthly fee. Base Power goes a step further by offering free hardware, removing the upfront cost barrier. This could accelerate adoption, but also increases the startup's financial risk, as it must recoup the investment through energy sales in the wholesale market. If wholesale prices fall, as during the COVID-19 pandemic, the model could become unsustainable.

At the market level, competition is intense: Tesla Powerwall dominates the residential market with over 600,000 units sold, but its price is around $10,000. Sunrun and Stem also offer aggregation services, but with subscription models. Base Power differentiates itself by offering free hardware, attracting price-sensitive customers. However, its current capacity is modest: it operates in Texas with a few hundred homes, according to TechCrunch data. To scale, it will need more capital and agreements with homebuilders.

What should readers know?

• The model: Base Power installs a 10 kWh battery (similar to a Tesla Powerwall) in the home at no cost. In exchange, it controls the battery to charge when energy is cheap and sell to the grid when it's expensive. The customer gets up to 3 hours of free backup and a flat electricity rate 20% lower than the market. According to company estimates, a typical home can save between $200 and $400 per year.
• Context: PJM's interconnection queue holds over 1,200 GW, equivalent to the entire U.S. generation capacity. Base Power avoids this wait by connecting on the customer side. Additionally, in Texas, ERCOT has implemented favorable rules for aggregating distributed resources since 2021, allowing companies like Base Power to participate in the capacity and ancillary services market.
• Funding: The startup has raised $20 million from a16z and other investors, and operates in Texas, where ERCOT has favorable rules for distributed resource aggregation. The round was led by a16z, which has invested in other energy startups like Fervo Energy and Form Energy. The capital will be used to expand its battery fleet and develop its management software.
• Competition: Companies like Tesla (Powerwall), Sunrun, and Stem compete in the residential storage space, but Base Power differentiates itself by offering free hardware in exchange for rights to the battery. Tesla, for example, sells the Powerwall directly, while Sunrun offers leasing. Stem focuses on commercial customers. Base Power targets the mass market of single-family homes, which in the U.S. number over 80 million.
• Risks: Long-term viability depends on energy prices and regulation. If wholesale prices fall, the model may not be profitable. Additionally, battery lifespan (10-15 years) requires replacement, adding costs. Another risk is regulatory changes: if public utility commissions impose tariffs or restrictions on energy sales from homes, the model would be affected. Finally, cybersecurity is a factor: by remotely controlling thousands of batteries, Base Power becomes a potential target for attacks.

“We are turning every home into a mini power plant that can help stabilize the grid without large infrastructure investments,” says Justin Lopas, co-founder of Base Power.

In conclusion, Base Power represents a promising innovation in the energy sector, but its success will depend on the evolution of prices, regulation, and the ability to scale. If it overcomes these challenges, it could set a precedent for a decentralized model of storage and grid services, with profound implications for the energy transition.