By Dana Hull

Energy storage is widely seen as a new, emerging and risky technology.

Now Stem, which makes energy storage systems for commercial and industrial businesses, hopes to pave the way for more companies to adopt the technology by taking a page from the fast-growing solar industry.

On Thursday, Millbrae-based Stem announced an initial $5 million project financing fund for its lithium-ion battery storage systems, which allow business customers to store electricity from the grid or from solar panels for times when they need it most. Business customers can now install a Stem energy system at no upfront cost; instead, they pay a monthly fee. Bay Area companies such as SolarCity pioneered the idea of no-money-down leases in the rooftop solar industry and have experienced rapid growth as a result.

"Utilities aren't the only customers of storage," Prakesh Patel, Stem's vice president of capital markets and strategy, said in an interview. "We are solely focused on commercial and industrial businesses. The ability to offer financing with no money down will help accelerate customer adoption of Stem systems."

The project financing fund is backed by an initial $5 million investment from Clean Feet Investors, or CFI.

"Two years from now, energy storage financing will be mainstream," said Jigar Shah, a principal at Clean Feet who founded SunEdison, the solar company based in Belmont. "It takes two years for mainstream capital to get comfortable with new technology. The clock is now ticking for energy storage."

Stem's first customers are two landmark InterContinental hotels in San Francisco: the Mark Hopkins on Nob Hill and the InterContinental San Francisco in the SoMa, or South of Market, neighborhood. Stem's energy system allows the hotels to switch between using battery power and grid power to reduce overall energy costs.

Large hotels and other commercial and industrial customers pay electric bills that have two components: energy charges and demand charges. Energy charges are based on the total amount of energy used during a one-month billing cycle. But demand charges are based on the peak electricity usage during a billing period, and typically comprise a big portion of a company's utility bill. Companies are eager to reduce those demand charges.

Harry Hobbs, area director of engineering at InterContinental San Francisco, said a monthly bill at one of the hotels can run as high as $60,000. But the Stem Energy System has helped to offset that by 17 to 30 percent.

"We're saving $10,000 to $20,000 dollars," Hobbs said. "We're still using energy from the grid, but the Stem batteries allow us to load shift, so we're not buying the most expensive electricity."

Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.