Publications Details

Energy Storage Financing: Performance Impacts on Project Financing

Baxter, Richard

Understanding performance is the key to risk management in energy storage project financing. Technical performance underlies both capital and operating costs, directly impacting the system's economic performance Since project development is an exercise in risk management, financing costs are the clearest view into how lenders' perceive a project's riskiness. Addressing this perception is the challenge facing the energy storage industry today. Growth in the early solar market was hindered until OEMs and project developers used verifiable performance to allay lenders' apprehension about the long-term viability of those projects. The energy storage industry is similarly laying the groundwork for sustained growth through better technical Standards and best practices. However, the storage industry remains far more complex than other markets, leading lenders to need better data, analytical tools, and performance metrics to invest not only to maximize returns, but also safely--through incorporating more precise performance metrics into the project's documents.