- ITC remains through 2032, but FEOC compliance creates uncertainty for some projects
- Late-stage and operational BESS projects command strongest buyer interest in competitive markets
- Western markets offer better contract structures, while Northeast programs raise tougher financing and revenue concerns
As states continue to open up their markets for storage capacity on all fronts, there has also been a very active market amongst energy IPPs and investors to add standalone storage projects to their portfolio.
The One Big Beautiful Bill Act of 2025, recognizing the importance of standalone storage as an important element to future capacity needs, kept the investment tax credit (ITC) intact through 2032, but required compliance with FEOC.
“We are seeing strong demand for late-stage and operational BESS projects. Mid-stage projects with safe-harboring under section 48 continue to trade with strength, often with back-ended earn-out structures. 48E deals are trading, but some buyers remain cautious until the material assistance clarifications are made that enable traditional tax equity to continue flowing, which we expect later this year. The story becomes murkier for early-to-mid-stage projects without safe harbor, despite the long tail of demand we are seeing in the current market landscape,” said Josh Rogol, president of Elevate Infrastructure.
“There is a small competitive group of buyers out for de-risked projects above 100 plus MW,” added Chris Taylor, CEO of GridStor, adding that the math simply becomes different for projects at an earlier stage: you have to have confidence in getting an offtake, oversee construction and operation and live with uncertainty on FEOC rules.
In a process which sources described as highly competitive, Elevate Renewables acquired the de-risked 600 MWh Prospect Power project, slated to go online later this year, in Rockingham County, Virginia — one of the more difficult markets for power development — from Swift Current Energy earlier this year.
Separately Recurrent, which had been quietly shopping some of its US projects, struck a deal to sell the 300 MW operational Papago BESS project, underpinned by a long-term PPA with the Arizona Public Service (APS) earlier this year.
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