Swell Energy, a provider of virtual power plant (VPP) programs for homeowners and businesses, raised $120 million to accelerate the deployment of its VPP programs across the United States.

SoftBank Vision Fund 2 and Greenbacker Development Opportunities Fund I led the investment round with participation from an Ares Infrastructure Opportunities fund and Ontario Power Generation Pension Fund.

Including the latest round, Swell Energy has raised a total of $152 million in funding to date, including previous investments by Ares Infrastructure Opportunities fund, Aligned Climate Capital, Third Sphere, and others. Citi was the sole placement agent for this transaction.

Swell Energy provides software solutions and VPP programs that can accelerate the mass adoption of distributed clean energy technologies by enabling consumers to take control of their energy use and cost, achieve energy security, and participate in the transactive grid.

With the funds, Swell Energy plans to develop 600 MWh of VPPs through the deployment and aggregation of 26,000 energy storage systems located at homes and businesses across the United States.

Swell VPPs provide services across Hawaii, California, and New York. The VPPs help utilities deliver cleaner energy to customers and reduce the grid’s dependence on fossil fuel peaker plants.

Businesses and residential consumers participating in Swell’s VPP program are benefited by paying less for their solar energy generation and storage systems and reducing the risk of a power outage in their area. Homeowners with solar and energy storage systems support the reliability of their local grids while reserving battery power for personal emergency use.

“Utilities and investors have understood the importance of virtual power plants for some time now; this funding further signals that the capital markets see tremendous value in this new asset class,” said Suleman Khan, CEO of Swell Energy.

“Swell’s business model is an innovative application of existing technology directly solving two large issues plaguing the grid and renewable energy adoption: transmission and load shifting,” said Ben Baker, Managing Director and Principal of Greenbacker Development Opportunities Fund.

According to Mercom’s 9M And Q3 2022 Funding and M&A Report for Storage, Grid & Efficiency. VC funding in Smart Grid companies in 9M 2022 was 162% higher, with a record $2.5 billion compared to the $936 million raised in 9M 2021.