A 2025 Update on Utility-Scale Energy Storage Procurements
While the energy storage market continues to rapidly expand, fueled by record-low battery costs and robust policy support, challenges still loom on the horizon—tariffs, shifting
Energy storage systems capture and hold energy for later use by shifting when and how electricity supply and demand are balanced. They're charged using electricity from the power grid during periods of low demand or extra capacity.
Residential storage: Primarily used for home resiliency to deliver back-up power, these systems can also shift energy consumption to off-peak hours and integrate home solar for a low-cost clean energy supply. Residential storage systems can be eligible for Inflation Reduction Act tax credits.
The majority of new energy storage installations over the last decade have been in front of the meter utility scale energy storage projects that will be developed and constructed pursuant to procurement contracts entered into between project developers (or a special-purpose project company owned by such developers) and the utilities.
Energy storage PPAs are often tolling arrangements because developers will not want to assume the cost of electrical energy input into a project and utilities are almost always in a better position to bear that risk.
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