Energy storage leasing photovoltaic project

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.

What happens if a landowner leased to a solar developer?

The landowner is likely to lose all productive use of lands leased to a solar developer. Thus the payment for the use of the project site will not be ameliorated by any offsetting additional income or benefit the landowner might otherwise obtain from joint use of the site.

What is the difference between a PPA and a solar lease?

Like PPAs, solar leases offer a similar arrangement, but have fixed monthly payments instead of the monthly PPA payments that vary as the solar electricity output changes. PPAs aim to offer a price per kWh that is lower than the market rate generation cost, though multiple variables factor into the actual price.

What is an energy storage project?

An energy storage project is a cluster of battery banks (or modules) that are connected to the electrical grid. These battery banks are roughly the same size as a shipping container. These are also called Battery Energy Storage Systems (BESS), or grid-scale/utility-scale energy storage or battery storage systems.

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.

How do I prepare for a PPA or self-ownership of solar?

To prepare for a PPA or self-ownership of solar (or solar + battery storage) project, EECBG Program awardees will need to identify government departments that should be consulted about solar installation projects, such as facilities/public works; finance; legal; procurement; sustainability; and economic development.