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Charged up: Will Encell Technology be a competitor for Tesla?

In April, Tesla CEO Elon Musk took the stage at the company’s design studio in southern California. The billionaire behind Tesla’s electric cars unveiled a line of rechargeable, wall-mounted, lithium- ion home battery units meant to store electricity generated by rooftop solar panels.

Tesla will market a 7-kilowatthour unit that goes for $3,000 and a 10-kilowatt-hour unit for $3,500, not including the cost of installation and an expensive DC-AC inverter. “Our goal is to fundamentally change the way the world uses energy,” says Musk, who also runs a company that leases solar panels to homeowners.

Musk’s performance drew raves. When he mentioned that the nighttime news conference was run entirely on stored electricity, the audience oohed and aahed. Technology website TheVerge.com called it the best tech keynote ever. A Washington Post headline proclaimed Musk’s battery a “big deal” and the start of a “coming revolution in energy storage.”

In north-central Florida, however, entrepreneur Robert Guyton reacted with a muted, “Yeah, so what.”

Operating from an old Energizer battery plant in Alachua, Guyton’s firm, Encell Technology, manufactures a storage battery that he’s been selling to homes and businesses for the past year. Guyton says Encell’s battery is more durable and robust than Musk’s and uses materials that aren’t toxic.

Since 2007, the company has raised about $30 million in angel investment and venture capital, trying to compete in a growing energy storage market that’s projected to be worth $50 billion in coming years.

At their most basic, batteries are devices that store electricity in chemical form. Each unit has a positively charged electrode and a negatively charged electrode, with a liquid or solid substance — called an electrolyte — separating them. The key feature common to all batteries is that the electrodes are made from different materials with different properties: One electrode is made of a material that “likes” to receive electrons, while the other is made of a substance that “likes” to give them up. Pass a current into the battery, and the chemical reaction stores electrons. Connect the battery to a device powered by electricity, and the chemical reaction releases an electrical charge.

Encell’s battery builds on technology invented by Thomas Edison at the beginning of the last century.

Edison’s design used electrodes that were basically perforated pouches containing powdered nickel and powdered iron, with a potassium-hydroxide electrolyte. Guyton says the design meant the metallic particles were too far apart to conduct electricity quickly, and the process was “clunky.” He describes the rate at which Edison’s batteries charged and discharged electricity as “painfully slow.”

Encell’s batteries also use nickel and iron for the electrodes, but the company has developed a proprietary process, which it declines to identify for competitive reasons, to make the particles fuse together. Chief technology officer and company co-founder Randy Ogg notes that Encell’s high-rate battery takes only 10 minutes to charge.

The company says its battery is nonflammable and non-toxic and won’t wear out as quickly as a lithium-based product. The battery lasts 25 years or longer and can be scaled up or down to fit a customer’s energy needs, Guyton says.

The chief knock against nickel iron batteries is that they’re heavy, and Encell’s design requires topping off with water. But Guyton answers that the watering can be automated, and weight isn’t as big a factor with home energy storage units — as opposed to, say, batteries used in electric cars or laptops. The price per kilowatt-hour ranges from less than $400 for commercial use to $800 for residential use. (Tesla’s battery starts at $350 a kilowatt-hour, though its lifespan is quite a bit shorter.)

Encell has been able to develop a high-profile customer base. New York City recently hired the company to develop and test a battery with Con Edison at Queens Hospital. The hospital will store electricity it buys during off-peak periods, when utility rates are low, and then use that power during periods of peak demand, when Con Ed charges much higher prices.

Encell also is working with a major defense contractor to develop a battery for military and commercial applications. And it has completed a project in the Bahamas to pair battery storage with solar power at a United Nationsfunded research center.

Meanwhile, a search engine company in California that Encell wouldn’t identify will test Encell’s battery for use in larger scale electric-rate arbitrage — hoping to make money by selling stored energy back to utilities at peak-demand rates.

Guyton says Encell is on track to do nearly $5 million in annual sales this year, despite “flying under the radar” with a tight marketing budget. “I think we have one of the most exciting customer bases of anybody that no one has ever heard of.”

He says he’s now seeking $17 million in additional venture capital to deploy “high-speed, high-volume” manufacturing equipment that’s already been purchased. “We’re at full capacity,” he says. “We basically have a 120-day waiting period from purchase order to being able to deliver.”

Encell faces competition from more than just Tesla, however. With solar rooftops becoming increasingly common, dozens of U.S. companies are developing battery storage technologies — including clean-tech startups with engineering drawn from MIT and Carnegie Mellon and financial backing from the likes of Bill Gates and the Clinton Foundation.

Guyton is more than a little miffed at the estimated $4.9 billion in government subsidies that Tesla and two other Muskaffiliated companies have received. The government, he says, is picking winners. “How am I supposed to compete” against a company with billions in subsidies? He asks.

“It worries me to no end that we might end up being the best technology that didn’t win the game,” he says. “We’re not MIT. We’re not Stanford. We’re real industry guys solving a real industry problem.”


Duke, Tesla Energy Experiment

In May, Duke Energy installed a 17,000-pound battery bank at the University of South Florida-St. Petersburg. Duke says it’s testing the Tesla Energybranded battery to work more solar power into its local grid. The unit takes up two parking spaces on the ground floor of a campus garage and works in conjunction with a new rooftop solar array.

Duke believes the 200-kilowatt battery will allow the school to operate the garage on a net-zero-energy basis, meaning it will produce as much power as it uses in a year, including two electric car charging stations. The battery will store excess energy generated by the solar array or feed it into the grid for immediate use, Duke says.

Florida’s second-largest utility also has paired solar power systems with smaller, 25-kilowatt battery units at 24 schools in Florida.

Meanwhile, the company has pledged to add 500 megawatts of utility-scale solar capacity in Florida by 2024. A week after its battery unveiling in St. Petersburg, Duke announced plans to build a 5-megawatt solar farm that will provide power to Walt Disney World.

Solar Initiatives

In June, Great Bay Distributors, a distributor of Anheuser-Busch products, began operating out of a new facility near I-275 in St. Petersburg. The facility includes a 1.5-megawatt solar array, considered the largest private solar power system in Florida. Tampa’s Solar Energy Management, which installed the system, says it will save Great Bay $202,307 on its electric bills in the first year. Those savings will then grow based on a projected 2.78% annual increase in utility rates, says Solar Energy Management. If so, Great Bay’s $3.6-million solar array would pay for itself by 2022.

Florida Power & Light will invest up to $420 million to build three solar farms at rural sites in DeSoto, Charlotte and Manatee counties.

Gulf Power is working with the U.S. Navy and Air Force to build solar farms at three sites in northwest Florida, potentially generating enough energy to power about 18,000 homes for a year.

Florida is one of at least 43 states that have “net metering” laws to encourage and subsidize solar-panel installations. When homes or businesses with solar power systems generate more electricity than they use, the excess is added to the grid, and a home’s electric meter runs backward. This allows homeowners to be credited at full retail value for energy sent to the grid, offsetting their costs at night or during other periods when they consume more power than they produce. They’re then billed for net energy consumption.

Road to Entrepreneurship

The son of an Atlanta banker, Robert Guyton got his MBA from Harvard in 1993. He went to work for a large investment bank, doing mergers and acquisitions. But he yearned to be an entrepreneur.

In 1996, Guyton helped a pair of researchers at the University of California-Berkeley start a search engine company called Inktomi. Two years later, they took the company public. At its peak, Guyton’s stake was worth several hundred million dollars.

Then, the dot-com bubble burst, and Yahoo acquired Inktomi for pennies on the dollar. “I got to take the ride all the way up, and I got to take it back down,” he says.

Meanwhile, Guyton had returned to his financial roots and co-founded a venture capital firm focused on technology startups in the Southeast. He was researching growth in the global energy storage market when he became a “battery junkie.” “I should have gotten help in rehab,” he jokes.

An old Energizer plant was sitting empty near Gainesville, and Guyton began talking with a local chemical engineer named Randy Ogg, who had worked in various roles at Energizer.

In 2007, they formed Encell Technology to develop a battery for storing electricity. After years of research, they rolled out their nickeliron battery in 2014.

“We think we’re hitting the market at the right time, but all the stars have to align,” Guyton says.

Tesla’s Power Play

Tesla CEO Elon Musk says affordable battery storage is the “missing piece” to have a proper transition to a sustainable energy world. Tesla’s new home battery, the “Powerwall,” is intended to hook up to solar systems and the utility grid. It can store electricity generated from solar panels during the day and power a home in the evening, Tesla says. “It also fortifies your home against power outages by providing a backup electricity supply.”