June 29, 2023

Takeaways from the 2023 Infocast Energy Storage Finance & Investment Conference

Our CEO, Chris Taylor, joined Ali AmiraliMatt ClenchyVenkatesh IntiKellie Metcalf, and Elizabeth Sluder in a conference session about the M&A energy storage market.

  • The initial rush in BESS asset M&A was driven by the need to catch up on asset positions. However, now that developers have the capabilities for greenfield projects, we’re weighing the math of building vs. buying and exploring alternative approaches.
  • While more projects are now economically viable due to the ITC, it’s important to assess the potential risks of nodal and revenue viability. We must look beyond the surface-level improvements and consider the whole picture.
  • Challenges persist, such as supply chain constraints, rising EPC costs, financing realities, and interconnection issues. It’s clear that relying solely on the ITC as a value-add is no longer sufficient.
  • Increased demand driven by the ITC has exacerbated the traffic jam in interconnection and the supply chain. This situation poses challenges for small and mid-sized developers, potentially forcing them to sell positions earlier than planned.
  • I’ve noticed an interesting trend of land acquisition flips without interconnection study results, which is surprising considering the real value lies in mid-stage positions with defined schedule and cost for interconnection.
  • The market saturation resulting from the influx of BESS positions in the ERCOT market has led to a paradoxical situation where there are more project sales but less value passed onto the seller in terms of the ITC.
  • There are still uncertainties surrounding energy community and domestic content adders, which require further guidance to determine their value. Sellers need to be aware of the potential implications for value capture.
  • GridStor will continue to be active in storage M&A. I’m proud of my team’s efforts, led by Jack Murray, to evaluate more than 100 projects over the past year. GridStor is fair, transparent, and efficient acquisition partner with continued appetite for quality assets throughout development and operational stages.