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Bloom Energy finds its business model; Bloom Box as a service

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Bloom Energy, the company behind the Bloom Box, has launched Bloom Electrons, a service where customers have no upfront investment and pay for just power.

Bloom Energy, the company behind the Bloom Box, has launched Bloom Electrons, a service where customers have no upfront investment and pay for just power.

The Pasadena, Calif.-based company made a big splash last year with a debut on 60 Minutes. The Bloom Box is essentially a fuel cell that can serve as a power plant. These mini-power plants, dubbed an energy server, can be stacked and housed in a unit the size of a refrigerator.

The problem is that many companies aren't going to want to put the money upfront for a Bloom Box. With that fact in mind, Bloom Energy created the Electrons service. The new model works like this:

  • Bloom will install its boxes on a customer's site and maintain them.
  • Customers pay for the electricity consumed.
  • Bloom and the customer enter a 10 year deal locking in electricity rates.

Bloom Energy argues that the service can help customers save up to 20 percent on their bills. What's also notable is that the Electrons service could give Bloom Energy steady, predictable recurring revenue that can be used for expansion.

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According to the company, Caltech, Becton, Dickinson & Co., Kaiser Permanente and Wal-Mart are using the Electrons service. In the end, companies are likely to scale Bloom systems by buying Bloom Boxes and utilizing the Electrons service.

Bloom Energy said customers can choose to use natural or biogas as fuel. The financial portion of this arrangement was created with the help of Credit Suisse and Silicon Valley Bank.

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Larry Dignan

Editor-in-Chief

Editor-in-Chief Larry Dignan is editor-in-chief of SmartPlanet and ZDNet. He is also editorial director of TechRepublic. Previously, he was an editor at eWeek, Baseline and CNET News. He has written for WallStreetWeek.com, Inter@ctive Week, New York Times and Financial Planning. He holds degrees from the Columbia University Graduate School of Journalism and the University of Delaware. He is based in New York but resides in Pennsylvania. Follow him on Twitter. Disclosure