Incorporating battery energy storage systems (BESS) into a planned photovoltaic (PV) project offers several key benefits, including protection against future market fluctuations, enhanced operational flexibility, and the creation of new revenue streams through grid services.
BESS helps mitigate the risk of cannibalization—where wholesale prices drop due to an oversupply of solar energy. By storing excess energy on-site, operators can strategically release it when demand peaks, thereby optimizing revenue and improving grid stability.
However, these advantages come with higher upfront capital requirements and additional technical complexities. Investors must manage two distinct technologies—PV systems and utility-scale batteries—and navigate the often time-consuming and separate permitting processes for each component.
Despite these challenges, integrating storage into a PV site can help offset declining return on investment (ROI) as the commercialization of solar energy matures. Investors can also generate additional income by offering grid management services to utilities, such as load balancing, frequency regulation, and grid congestion forecasting.
Colocation: A Strategic Opportunity for Renewable Energy Investors