Energy storage finance appointment consultation

Are energy storage projects a project finance transaction?

In many ways, energy storage projects are no different than a typical project finance transaction. Project finance is an exercise in risk allocation. Financings will not close until all risks have been catalogued and covered. However, there are some unique features to energy storage with which investors and lenders will have to become familiar.

Why do energy storage projects need project financing?

The rapid growth in the energy storage market is similarly driving demand for project financing. The general principles of project finance that apply to the financing of solar and wind projects also apply to energy storage projects.

Can you finance a solar energy storage project?

Since the majority of solar projects currently under construction include a storage system, lenders in the project finance markets are willing to finance the construction and cashflows of an energy storage project. However, there are certain additional considerations in structuring a project finance transaction for an energy storage project.

How do energy storage projects make money?

Energy storage projects provide a number of services and, for each service, receive a different revenue stream. Distributed energy storage projects offer two main sources of revenue. Capacity payments from the local utility are one.

Are energy storage projects a good investment?

Investors and lenders are eager to enter into the energy storage market. In many ways, energy storage projects are no different than a typical project finance transaction. Project finance is an exercise in risk allocation. Financings will not close until all risks have been catalogued and covered.

How do distributed energy storage projects make money?

Distributed energy storage projects offer two main sources of revenue. Capacity payments from the local utility are one. Power purchase agreements providing capacity payments for distributed energy storage systems with terms of 10 years or more are becoming customary in California. Payments for demand charge management for on-site load are another.