Distributed Energy Storage System Developers Must Ensure Projects Have Guaranteed Revenue to Attract Debt and Equity Companies
Developers should focus on operational efficiencies to remain competitive in expanding market
A new report from Navigant Research explores the fundamentals and challenges of financing distributed energy storage systems (DESSs).
DESSs are inherently flexible, can now be deployed rapidly, can generate multiple value streams, and have the potential to provide multiple grid and customer benefits. In today’s DESS market, significant competition is emerging among project developers in search of commercial debt lending and equity investment partners. Click to tweet: According to a new report from @NavigantRSRCH, to seize a competitive edge, DESS developers must ensure their projects have a strong level of guaranteed revenue to increase the likelihood of attracting potential debt and equity companies.
“DESS markets are growing due to several factors, including breakthroughs in adjacent digital technologies such as artificial intelligence, blockchain, and predictive analytics that are facilitating the emergence of DESSs as a key enabling technology for aggregated distributed energy resources (DER) solutions,” says Ricardo F. Rodriguez, research analyst with Navigant Research. “These solutions are propelling DESS projects toward economic viability and improved bankability.”
According to the report, as battery prices and balance-of-system (BOS) costs decline, DESS developers need to focus on operational efficiencies to remain competitive. Consequently, new market participation models that use storage’s inherent flexibility to capture multiple value streams are attracting increasing attention. Stakeholders are also focusing on government incentives that enhance the bankability of DESS projects and enable DESS project value chain participants to reduce costs and drive better project performance.
The report, Distributed Storage Financing Innovations Give Vendors an Edge in the Market, explores the fundamentals and challenges of financing DESSs. The study examines innovative DESS project financing asset classes, new market participation and government policies that improve the bankability of DESS projects, and solar PV plus storage power purchase agreements (PPAs) and holistic energy management. It also provides guidance for DESS stakeholders on implementing lean practices, taking advantage of real-time integrated control software, and lowering project costs by partnering with engineering, procurement, and construction (EPC) companies. An Executive Summary of the report is available for free download on the Navigant Research website.
* The information contained in this press release concerning the report, Distributed Storage Financing Innovations Give Vendors an Edge in the Market, is a summary and reflects Navigant Research’s current expectations based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report’s conclusions and the methodologies used to create the report. Neither Navigant Research nor Navigant undertakes any obligation to update any of the information contained in this press release or the report.