The burgeoning as-a-service model, offering greater user flexibility and attractive economics, is now a viable option for energy storage. As with transportation, office equipment, and other capital-intensive assets, large-scale energy users both on and off the grid can leverage the benefits of battery storage on a use-only-what-you-need-when-you-need-it basis. What is the main driver behind this new offering? Flexibility.
Removing the Risks
There are several reasons why storage-as-a-service makes sense in today’s fast-evolving energy landscape. First, long-term ownership commitments may lead to stranded assets and tied-up capital (especially with relatively new technology). In certain cases, it might be better to rent a system and see if it proves valuable. Second, as-a-service solutions provide maximum flexibility when market conditions shift. For example, when regulations or the value of ancillary services change, users can more easily adapt. Third, rental customers can generally contract with one supplier who takes responsibility for system design, performance, and maintenance—a “one-stop shop.” These new approaches to system deployment offer a virtually risk-free, 100% reliable solution.
There are also compelling arguments for the as-a-service model that apply in particular to batteries. For example, potential customers may have concerns about battery life and whether their investment will be compromised. New technology is continually coming on the market, which could render their newly acquired asset obsolete. As with solar photovoltaic technology, there’s a perception that prices will continue to decline. Why buy now if it’ll be cheaper tomorrow? Faced with a purchase decision, these concerns can lead to hesitation, limiting a customer’s ability to capture energy storage benefits immediately. The more-flexible as-a-service alternative eliminates these risks.
A final point worth mentioning is that batteries typically have long lead times, ranging from nine to 18 months, depending on market conditions. Most established providers that offer storage-as-a-service have inventory available that can be delivered on short notice (typically less than three months), enabling customers to realize the benefits faster.
Convenient Contracts and Configurations
Storage-as-a-service contracts start with periods as short as a few months (although multi-year terms are far more economical). Typically, agreements are based on a regular monthly or annual fee. Terms can be easily adapted to fit changing business needs. Customers receive guaranteed 24/7 system reliability for zero asset investment and with low implementation costs, including 100% service coverage. All operations and maintenance costs, remote monitoring, performance guarantees, and warranties are covered under one contract and fee.
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