Distributed energy storage company Swell Energy is closing its doors, just six months after its acquisition of Renu Energy and its subsequent expansion into the Southeast’s energy market.
According to several former employees, the virtual power plant developer underwent a series of layoffs in the wake of that acquisition, culminating last week when all remaining staff were let go. Swell is currently in the process of liquidating its assets via an “assignment for the benefit of contractors” — an alternative to Chapter 11 proceedings, in which the company will voluntarily transfer assets to a third party, who will then sell the assets to pay creditors.
Rumors of a shutdown have been circulating for the last week: Some customers took to Reddit to complain about emails they received from Swell stating the company’s intent to shutter its doors, and not move forward with any planned future installations. The company’s Twitter and Facebook pages have been taken down, and its main phone line disconnected.
Internally, trouble was brewing for several months, employees told Latitude Media. In early May, one employee wrote on Glassdoor that Swell had laid off “a huge batch of people with zero warning.” In late June, another wrote that the company was downsizing. According to one former employee, all-hands meetings at the company ceased after the first round of layoffs in February, and employees were “kept in the dark” about the subsequent rounds.
An uphill battle
The company’s closure comes after it raised over $100 million in equity and teamed up on a variety of virtual power plant deployments.
Swell’s model involved both installing and financing distributed energy storage, and aggregating those assets into VPPs.
Its demise highlights the difficult road startups in the VPP market are facing, given the relative immaturity of the sector and thin margins, said Matt Casey, head of research at Latitude Intelligence.
Swell has taken a challenging approach. While solar companies like Sunrun and Tesla have been able to pivot toward VPPs and build from an established customer base, Swell was building out a platform and deploying a VPP via channel partners. And, Casey added, it’s doing so in a market where no one has quite figured out how to make money.
Swell didn’t respond to Latitude Media’s requests for comment.
