The power conversion tech company Heron Power is putting steel in the ground for its first commercial factory, just miles from its Silicon Valley engineering hub.
The startup, which in February closed a $140 million Series B to fund the build-out, aims to start production in the second half of 2027 and eventually ramp up to 40 gigawatts of capacity, or about 10,000 of its “Heron Link” systems.
The technology is a departure from the decades-old and largely mechanical transformers that hold together today’s grid. Heron Power promises to combine multiple pieces of power conversion equipment into a single modular, software-controlled unit for both data centers and solar and battery storage projects looking to get interconnected. The goal is to get those projects online faster amid a years-long global shortage of transformers, while also making the grid more resilient to large voltage changes.
But it isn’t yet quite ready for scale. Founder and CEO Drew Baglino, a former executive at Tesla, told Latitude Media that Heron Power is still developing its manufacturing process ahead of the factory opening. That includes working with equipment integrators and testing different ways to make key components and do final assembly — which is a big reason why Heron Power last week announced Morgan Hill, California as the site of the first commercial-scale operation.
“The first time you do a product, especially a product as complicated as the Heron Link, you want it to be at a factory that’s close to engineering HQ,” Baglino said. “It’s important that product design engineers spend a lot of time in the factory. That helps hit quality and cost targets much more quickly.”
Power electronics assembly has clustered in the Southeast in recent years, where land and labor are far cheaper than in California. However, choosing a first factory site near headquarters isn’t unusual as a company finesses a new product; it’s what Tesla did with its own electric vehicle factory in Fremont back in 2010.
Meanwhile, Heron Power is also testing its power conversion system in the real world over the next year, including at solar and data center sites. “To be truly bankable, we need more real runtime in the field,” Baglino added.
So far, the company has disclosed two of its early customers: Intersect Power, a clean-energy developer that Google acquired in 2025; and the data center developer Crusoe. That said, Baglino said interest from solar, storage, and data center customers is “well north of” the 40GW of capacity planned for the first factory. The company is collaborating with those early customers to build confidence in Heron’s technology, he said.
When it comes to costs, Baglino doesn’t expect customers to pay a premium over traditional technology. He listed several international trade issues working in favor of Heron Power, including the Federal Communication Commission’s ban on new models of foreign inverters and tariffs as high as 55% on imported power conversion components.
Then there’s the actual design differences between solid-state transformers and traditional oil-filled technology. Heron Link promises that its SST has higher energy efficiency, which could translate into greater revenue for renewable energy project owners, or lower electricity costs at a data center.
Heron also uses high-frequency silicon-carbide semiconductors to convert power electronically — the costs of which have dropped dramatically thanks to the ramp up of the EV industry, Baglino said. That enables SSTs to be controlled remotely for voltage regulation and load smoothing. By contrast, legacy high-voltage transformers rely on oil to cool copper coils and require in-person maintenance.
Ultimately, Heron Power estimates that its system will be 5% to 6% more valuable than alternatives over the lifespan of a project.
For more on CEO Drew Baglino’s take on solid-state transformers, listen to his interview on the Catalyst podcast.
