Temporary power storage financing

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.

Can a storage project in California be financed?

A storage project in California can obtain a bank loan for up to 90% of the construction costs and 100% for term financing, if it has a fully contracted stand-alone project (e.g., with a fully tolled 15-year offtake contract). The cost of financing a merchant project is less attractive.

Is bank financing available for storage projects?

Bank financing is available for battery storage projects. The cost and terms of bank financing may vary significantly depending on the project's segment in the storage market and its physical location.

Do project finance lenders consider technology risks in energy storage projects?

Project finance lenders view all of these newer technologies as having increased risk due to a lack of historical data. As a result, a primary focus for lenders in their due diligence of an energy storage project will be on technology risks.

What is a battery energy storage system?

Battery energy storage system. Battery energy storage systems (BESS) can help address the challenge of intermittent renewable energy. Large scale deployment of this technology is hampered by perceived financial risks and lack of secured financial models.