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At Your Service: Battery Energy storage as a service

The “as a service” model enables companies to invest in high-value infrastructure without up-front capital expenditure, and with complete confidence in deliverable outcomes. But can it work for battery energy storage systems?

05/06/2023

More companies are offering their products ‘as a service’ in a bid to streamline and simplify the financial outlay. Software as a service (SaaS) is now an established business model – and ‘as a service’ is becoming increasingly popular in the world of finance.

Connected Energy is proud to be at the forefront of offering battery energy storage systems (BESS) as a service, thanks to our partnership with Capitas. Capitas is a dedicated cleantech and energy solutions finance company, focused on enabling the rapid deployment of carbon reduction, energy resilience and renewable energy generation projects in the private and public sectors.

“We sit between banks and the energy sector to ensure these projects can access the right funding by understanding the customer’s processes and requirements,” says Phil Murphy. “We work with public sector, private sector and facilities management businesses. We focus on understanding what the end user needs whether the project is stand-alone or part of a wider arrangement.

“We can offer the standard lease and hire options that you see elsewhere but where we differ is our energy as a service model. This is a full turnkey solution, working with selected suppliers. It includes full operational and maintenance costs and a compensation mechanism to ensure that what is being promised by the supplier is delivered. We have developed BESS as a service with Connected Energy and we have a number of projects we are exploring together at present.”

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How it works

Battery storage as a service enables companies to procure BESS with little or no up-front costs, instead of paying for the systems on a monthly basis. The model covers all aspects of the process, including feasibility studies and site design through to equipment supply, installation and onboarding. It also includes maintenance, callout charges and uptime guarantees, giving the client confidence in outcomes.

“The fact that it is a wrap-around service with peace of mind is a key benefit for the customer,” adds Phil. “Maintenance is included such as remote monitoring, callouts and spare parts. With Connected Energy, we also roll in a battery check halfway through the contract so that, if any batteries need replacing that is covered. In this way, Connected Energy guarantees a minimum level of energy availability from that infrastructure for the duration of the contract.”

Off balance sheet

The Battery Storage as a Service model is ideal for projects that include two or more of Connected Energy’s E-STOR units providing collective power of at least 600kW.

If a company has constraints on capex or borrowing, battery storage as a service can help get around them. “If they have restrictions on borrowing or capital expenditure, as-a-service sits outside of that – it is very much as a service like a phone contract with everything bundled in, in exchange for a monthly fee,” says Phil.

“The type of model also opens up new opportunities for the public sector. The as-a-service model can be classed as an off-balance sheet and that is very important for the public sector. They are under pressure to cut carbon but there are limited funds to support this. Our model can plug that gap to fundamentally make it more affordable for those organisations to implement these measures.”

This also opens up the possibility of the public sector changing how it writes tenders and frameworks. “For the public sector, as a service can become a model that fits within their financing limitations,” adds Phil.

“With tenders it depends naturally if a tender model is based on budget or grant funding and in the past that could be a challenge for us to navigate. To overcome this, we engage very early in this process to encourage them to include an as a service solution as an option on the tender or as a key component. There is going to have to be a mindset shift in both private and public sector to entertain these models.”

Contact us for a no-obligation chat about financing and battery storage as a service model.

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