If you are in the process of system design or hardware procurement for a battery energy storage system (BESS), you are most likely focused on what changing trade policies mean for the future of your project.
There is no question that changing tariffs and tax incentives will affect the battery storage and energy industry as a whole. The cost of batteries for US buyers is going up with increased tariffs, but these policies come into effect following a dramatic decrease in battery costs over the last ten years. Energy storage remains one of the critical classes of infrastructure that needs to be built at an accelerated rate to enable AI-driven data center growth and to support a reliable electric grid. And, with the increased demand for flexible and reliable power grid solutions, we expect energy asset owners and operators to be looking for creative solutions to continue increasing grid capacity.
As BESS asset owners and financers take on this uncertainty, we want to bring another set of considerations to the forefront of your planning—the things you have control over that have major influence on the lifetime success of your project. In this blog, we’ll break down how to move forward with confidence on your battery storage project, whether you’re still in the design process or approaching the moment of augmentation.
Plan Holistically with the Right Partner
The energy industry has and will continue to be dynamic, but it has proven to be resilient. Among numerous factors like supply chain disruptions, technology innovations, and increased demand, your lights still come on.
Battery asset owners and operators have the ability to be just as adaptable with the support of experienced partners and proven software solutions.
Simplify Chain of Accountability
There are many different ways that ownership and liability can be structured for battery storage projects. And, with so many different players in the battery storage industry offering a different mix of products and services, it can be difficult to know the best approach.
We have seen the headache that comes with identifying accountability when something goes awry with the commissioning or operations of a battery storage site. Fortunately, there are options to streamline ownership and liability without constraining adaptability to the market.
FlexGen offers flexible and comprehensive solutions across the entire asset lifecycle, from system design and integration to field commissioning and operations. Our engineering, software and supply chain experts work collaboratively with you and your chosen partners to develop the best solution, mitigate risk and increase efficiency throughout the project.
Plan with the End in Mind
Batteries degrade, but your system design and capacity maintenance approach have a significant impact on how fast they do. Different capacity maintenance approaches are better for different use cases, and it’s important to plan for the harshest conditions to avoid underperforming sites or unexpected downtime.
The size of your system and type of energy services you participate in are inextricably linked to how you maintain performance expectations and augmentation timelines. A key pitfall to avoid is exacto-sizing a system, where the site is built with a nameplate capacity that is the same as what is promised in an offtake agreement.
Additionally, building adaptability into system design is proving to be more important than ever with shifting market conditions, especially in ERCOT. With the ancillary services market in ERCOT becoming saturated, existing BESS owners and operators may consider adding energy capacity to get higher returns from participating in energy arbitrage. Conditions in the Texas and California energy markets are a good indicator of what to expect in other ISOs. Alternatively, asset owners with underperforming sites may prioritize augmentation earlier than planned, like an energy management software (EMS) retrofit, to improve availability.
One of the most important decisions that affects adaptability and reliability is the software, or the brain of battery storage systems. Software that provides real-time and granular insights into cell, module, rack, block and site level conditions is essential to not just safeguarding the health of batteries, but also capitalizing on dynamic market opportunities. It is undeniable that having the right software and services partner to navigate system design and shifting market conditions is not only optimal, but it could be the difference between meeting ROI expectations or not.
Choosing the Right Software is More Important Than Ever
It may go without saying at this point, but one of the most consequential decisions for your battery storage project is the software. When you’re looking at a full project budget, though, you’ll see that software is only around 1% of capital expenditure. Don’t pass over this line item as you plan and design your BESS project.
The controls and analytical capabilities of software are directly responsible for the ability to detect system anomalies, evaluate the root cause if there is an issue, and act quickly to resolve.
Investing in good software provides flexibility, and without it, you are more likely to encounter costly surprises when markets or supply chain situations change.
FlexGen’s Hardware-Agnostic and Software-Centric Approach
With the latest tariffs announced by the current administration, the cost of batteries will be higher but it won't bring the battery storage market to a halt. Even at these new tariff levels, many projects will have strong economics and projects will continue to be built. And, the US battery manufacturing landscape will continue to innovate and grow in response to market forces.
What we need now is creative and flexible solutions, and fortunately, that’s what we at FlexGen have focused on for over 15 years. Our hardware-agnostic and software-centric approach continues to drive speed and reliability in the battery storage industry. Our hardware-agnostic approach is due in part to our long-standing relationships with top manufacturers. We use a comprehensive assessment to rank vendors based on cost, safety, quality, performance, bankability, and service. Working with our global supply chain team ensures that you have real-time data to inform your design decisions.
No matter what BESS hardware decision you’ve made or are considering, FlexGen can support the design, integration, commissioning and operations of your battery storage project. Schedule a time to speak with one of our experts today to learn more about how we can support your project.
