Solar developers seeking to enter the growing storage market have been advised that financing energy storage projects is a lot more complex than simply “transposing” learnings from solar to batteries.
Despite the parallels that are often drawn between the solar and storage industries, Dan Taylor, director of UK financier and project developer Camborne Capital, has said that the younger sector presents its own unique challenges.
Speaking to sister title Energy-Storage.News at Solar Media’s recent Energy Storage Summit in London, Taylor said: “Where investors in the past have worked with solar and wind, and had the opportunity of FiTs, subsidies and ROCs, trying to just transpose that into a new industry which is a much more reactive, a sort of day-to-day role, is probably not as easy as it sounds
As Taylor says, National Grid, the UK transmission operator's tender for 200MW of enhanced frequency response (EFR) services to balance the grid has excited the entire industry, but there is much more to it than that.
“With PV you’ve got long term contracts, it’s fairly stationary and quite passive – you have your contract, it generates an income, your asset is secure and paid for and you can generate income on top. With storage there isn’t one solution for that and there does need to be a number of opportunities,” he explained.
This “revenue stacking” is a separate concept to the usual state of play with the solar industry, where government subsidies or private purchase agreements have provided enough of an income to make a project viable.
As Taylor points out, storage is yet to reach a stage where it can comfortably work alongside renewables in this way, requiring “policy influence and review”.
However, confidence is high within the UK market that storage will increase to meet the potential many see in the technology. Speaking earlier this week to Solar Power Portal, Lee Richards of RegenSW said: “I think costs are still falling so I wouldn't say in a month's time you're going to suddenly see lots of commercial users and industrial users going out and buying big batteries but there's many different reasons why they might do.
“I wouldn't say its quite there yet in the mainstream but it is growing very quickly.”