Lennar Bets on Battery-Making Startup for Texas Homes

Base Power is the name of an electricity startup, founded just two years ago in Austin, Texas. This new firm is part of a growing network of Virtual Power Plants (VPPs). These systems provide a way to store battery power, so the lights stay on during stormy times or when the grid is overwhelmed.

Calling itself “the modern power company for the electric era,” Base itself is powered by venture capital. It’s run by veterans of Apple, Tesla, and other large tech companies.

Now, the massive home building company Lennar has taken a stake in the startup. And it’s putting the systems into its Texas developments.

Keeping the Lights On: It’s a New Competitive Edge for Home Builders.

Strong electricity is a selling point in Texas. As temperatures rise and weather becomes more volatile, people want backup batteries to make sure they can keep the lights on. Systems are overloaded (ironically, tech companies are one big reason for that). At the same time, the existing electric grids are getting older. Generators are an incomplete solution. And sometimes they fail when residents need them the most.

The upshot? If Lennar can offer real peace of mind, it could sell more houses in Texas. And it’s not the only home building company thinking this way. Electrical innovation can be a major competitive edge in today’s home building business.

Eric Feder heads LENx, Lennar’s innovation and VC investing division. Feder’s commitment to the backup battery startup is a sort of crisis-into-opportunity play. Feder explains:

• Millions of Texans are running into outage issues, partly related to ever more extreme weather events.

• What Base Power has to offer appeals to buyers looking for a “worry-free solution” to the outage problem.

Backup battery power is a burgeoning market segment. At maximum output, more than 10% of Texas is running off battery power. This explains why Lennar has become a key investor in Base Power.

Installing Hardware Is One Thing. But the Ongoing Revenue Comes From Software Subscriptions.

The two companies have announced an agreement in which Base puts equipment into the homes Lennar develops in and around North Austin and Dallas-Fort Worth, Texas. The builder has picked neighborhoods where electric outages have become most common. 

For a prospective buyer, the equipment is advertised as free. But the growing tech profit source these days involves consumer subscriptions. Such is the case here. People who buy Lennar homes outfitted with VPP electricity would subscribe to a Base Power account for their energy needs. As with a regular electric bill, they would pay for the service monthly.

Lennar chair Stuart Miller says this is about more than profit. Miller says Lennar aims to “improve the overall stature of the home building business, as it seeks to address the markets that are stressed and having problems.” These problems, of course, include the need for reliable electricity and more capacity in the grid. 

The first customers will be at new developments in areas where outages are common:

• Firefly Pointe, a Homeowners’ Association property in Hutto, Texas, with new construction selling for $262 – 500K.

• Rancho del Cielo, a Homeowners’ Association property in the Austin suburb of Jarrell, Texas, with newly built homes selling for $221 – 280K.

• Rancho Canyon, a Homeowners’ Association property in the Fort Worth subdivision of Haslet, Texas, with new construction selling for $289 – 485K.

The electric service from Base is an optional amenity. Should a homeowner choose to sign up, the new home will come with a Base battery installed.

The buyer will get a choice of energy sources for the battery. Some customers will draw from wind power, some from fossil fuel sources. But most will choose solar, according to the company. It’s the best financial choice. Solar allows for the lowest monthly rates, and lets the homeowner sell electricity back to Base Power. In turn, Base Power sells stored energy back to the area’s grid when demand for electricity surges.  

Here’s How the Battery System Works.

Homeowners can opt into a subscription from Base Power, which owns the batteries. This gives them the peace of mind that the batteries will keep the lights on when the grid fails.

Because it controls the software and the system, Base has the ability to get the least expensive electricity. In turn, the company can make sure Base Power customers receive fair pricing on backup electricity. As the normal electric flow continues to power cities, Base Power we can use the batteries to send a flow of energy back to the grid, according to Base Power CEO Zach Dell. 

Customers currently pay $595 to start the plan, and around $20 for their ongoing monthly subscription. In return, Base Power provides:

• The battery and related hardware. Base Power sends electricians to the homes to install all necessary parts.

• Cloud-based software that remotely controls the electricity coming into a home, and directs excess power back to the grid. Base Power directs the home battery to pull from the grid at nighttime and other off-peak times.

• The hardware maintenance and the software updates needed to ensure dependable and cost-efficient power.

• Electricity itself, through Base’s partnership with a utility company. Base says it can save a homeowner between 10% and 20% overall on monthly electric costs.

Zach Dell, the founder and CEO of Base Power, says the offering will lower electric bills. At the same time, Dell acknowledges that the batteries come from China, so the company faces the financial impacts of tariffs.

In Texas and Beyond: Are New Homes With Backup Power Now Trending?

Base Power is one of a bevvy of tech startups jumping into the backup power arena. And no wonder.  Here’s the projection, according to Mordor Intelligence’s report “Virtual Power Plant Market Size & Share Analysis – Growth Trends and Forecast (2025 – 2030)”:

• Software as a service for the Virtual Power Plant market is set to grow at a 24% annual rate.

• Backup battery storage is poised to expand by 28% yearly over the coming five years. During that time, residential use will experience an estimated 25% annual growth rate.

We’re watching a trend in formation. You’ll recall that Lennar considers the pilot with Base Power part of its mission to “improve the overall stature of the home building business, as it seeks to address the markets that are stressed and having problems.” Lennar is Florida-based, and operates across the country.

The partnership which Base Power has forged with Lennar’s housing developers will give this new company a leg up when it comes to customer willingness to adopt the idea. Backup power will simply be part of a home purchase. The industry will be taking notes.

Photo credit: Castorly Stock (not a representation of Base Power equipment), via Pexels/Canva.