Heron Power, backed by Andreessen Horowitz and Breakthrough Energy, is scaling up production of solid-state transformers that move power from renewable energy systems to the grid more efficiently.
Heron Power, founded by former Tesla senior vice president Drew Baglino, has raised $140 million to build an automated factory for solid-state transformers—hardware designed to move electricity from solar arrays, battery systems and other renewable sources into the grid and data centers with far less waste in a bid to wrangle spiking U.S. power demand.
The funding round, backed by Andreessen Horowitz and Breakthrough Energy Ventures, follows a $43 million raise last year that Baglino founded shortly after leaving Tesla in early 2024, where he’d been in charge of its energy business. Baglino declined to provide Heron’s valuation with the round or his stake in the Santa Cruz, California-based company.
Baglino’s pitch is rooted in his time at Tesla. While expanding the company’s EV charging network and overseeing deployments of utility-scale battery storage, he said he came to see conventional transformers—and the inverters bolted onto them—as a baked-in structural bottleneck.
“While there was a lot of innovation happening as far as the technologies that connect to the grid, the actual stuff on the other side of the wire that you’re getting from utilities or that you’re buying from suppliers like a transformer isn’t changing at all,” Baglino told Forbes. “And if it’s really painful to expand the electricity sector because of bottlenecks in the supply chain, something should be done about that. That’s why I started the company.”
Customers include developers of large-scale solar and battery storage systems as well as data centers that want cost or time-saving options, he said. Those include developer Intersect, which is building so-called hyperscale data centers. The location of Heron’s first factory hasn’t been disclosed, but it will be scaled to produce 40 gigawatts of transformers annually, or about half the power currently generated in Texas per year.
Heron’s solid-state transformers are about 30% smaller than traditional units seen at power stations and weigh about a fourth as much, according to the company. While Heron is selling them for about the same price as a conventional transformer, which can cost $200,000 or for large data center units, they’re faster and simpler to install, and transfer more electricity with fewer losses. They also allow for better power flow management, according to the company.
Heron’s new factory is to be operational before the end of 2027.
Baglino, who spent 18 years at Tesla, left in 2024 when Elon Musk inexplicably fired most members of its Supercharger team, even as demand for charging services was growing. In the following months, many of those employees were rehired. Battery sales and charging services, which Baglino managed, remain bright spots for Tesla as its EV sales continue to shrink.
JB Straubel, a Tesla cofounder and board member, and former Tesla CFO Zachary Kirkhorn are among Heron’s advisors.
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This story was originally published on forbes.com and all figures are in USD.
