Heron Power raises $140 million to commercialize solid-state transformers

Why solid-state transformers matter

Transformers are a cornerstone of the electrical grid, enabling efficient transmission of power over long distances. However, their core design has remained largely unchanged for nearly a century. Conventional transformers rely on steel alloys and copper wire, making them bulky, difficult to replace, and prone to energy losses during transmission.

Solid-state transformers integrate magnetic components with high-power semiconductors, offering a smaller footprint and greater control over electricity flow. These systems can reduce power losses by up to half compared to conventional equipment, according to industry testing. For example, a one-megawatt solid-state transformer developed by the New York Power Authority and the Electric Power Research Institute (EPRI) achieved 98% efficiency, outperforming the 96% efficiency of traditional systems.

Heron Power’s commercial push

Heron Power, led by founder and CEO Drew Baglino, is positioning its Heron Link solid-state transformer as a solution for data centers, solar arrays, and grid batteries. The company has raised $140 million to accelerate commercialization, including the construction of a $100 million manufacturing facility in California. Production is expected to begin in 2027, with full capacity targeted by 2029.

The startup is already testing its technology with a ten megawatt-hour battery setup at its Scotts Valley headquarters and plans a pilot with a nearby solar farm. These efforts align with broader industry trends, as demand for efficient grid infrastructure grows amid rising electricity consumption from data centers and renewable energy projects.

Challenges and market dynamics

Despite progress, high-voltage solid-state transformers for long-distance transmission remain a long-term goal. Current technology limits their use to lower-voltage applications, such as local grids and industrial facilities.

The transformer market is also facing supply constraints. While $3 billion has been invested in the US supply chain in recent years, demand continues to outpace production, with wait times for large transformers extending up to five years. Analysts like Benjamin Boucher of Wood Mackenzie highlight the urgency of modernizing grid infrastructure to keep pace with energy demand.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

For founders and operators in energy, semiconductor, or data center sectors, Heron Power’s progress signals a shift toward more efficient and adaptable grid technology. The commercialization of solid-state transformers could reduce operational costs for data centers and renewable energy projects, while also creating opportunities for startups in power electronics and grid management. However, the technology’s limitations—particularly in high-voltage applications—mean that conventional transformers will remain dominant for the foreseeable future, especially in long-distance transmission.

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