Analysis of the Week: Enerdatics forecasts a ~50% y/y surge in financings for battery storage in the US in 2023

published on 08 September 2023

Investments in YTD 2023 have matched 2022 levels, fueled by a 70% y/y rise in debt financings as developers pursued the substantial profit margins offered by BESS. Leading this trend are PE-backed firms such as Peregrine Energy and Jupiter Power, which have ambitious expansion plans, primarily in regions like ERCOT and CAISO. These areas are often plagued by grid issues and extreme weather conditions. Enerdatics anticipates other PE-backed entities to follow suit.

Developers are actively raising capital to expand their battery storage capabilities, driven by the goal of maximizing the current strong returns. This urgency stems from the substantial profits derived primarily from energy arbitrage, where power is stored during periods of low demand and sold at higher prices when demand is high. This allows them to achieve returns of up to 20%, twice the usual yield of solar and wind assets.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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