Energy storage sector asset restructuring

How has the IRA impacted the energy storage industry?

The energy storage industry has continued to progress over the course of 2024 and into 2025, buoyed in significant part by the federal income tax benefits in the form of tax credits enacted under the IRA. Energy storage was one of the major beneficiaries of the IRA’s new rules on both the deployment and manufacturing sides.

Do investors underestimate the value of energy storage?

While energy storage is already being deployed to support grids across major power markets, new McKinsey analysis suggests investors often underestimate the value of energy storage in their business cases.

What are stranded asset risk clusters?

The emerging narratives can be classified into three clusters, including stranded asset risk in the upstream energy sector (green-colored networks) and downstream energy sector (red-colored networks), and the implications of stranded asset risk on energy transition and options to manage them (blue-colored networks) (Fig. 1).

How does stranded asset risk affect energy transition?

Our findings show that stranded asset risk affects incumbents' decisions to shift away from the fossil fuel energy system to a clean and low-carbon energy system. Other factors, such as transition costs, energy security and sustainability concerns, also contribute to the options for the energy transition pathway.

How many energy storage financing and investment deals were completed in 2024?

Through the first three quarters of 2024, 83 energy storage financing and investment deals were reported completed for a total of $17.6 billion invested. Of these transactions, 18 were M&A transactions, up from 11 transactions during the same period in 2023.

What challenges do energy storage resources face?

Energy storage resources present a distinct set of challenges given their unique nature: unlike conventional or renewable generation, energy storage resources must be charged with electric power, which will sometimes (but not always) be provided by the offtaker.