Optimization Technologies and Diverse Financial Strategies Drive Battery Storage Profitability

Battery optimization technology has advanced quickly in the U.S. and Europe, enabling batteries to sell into various wholesale electricity markets and reap diverse revenue streams. As the electricity products and services that batteries can provide have become more complicated and varied, battery owners have remained profitable in a storage market that has drastically increased in supply. This report explores how AI-driven software and innovative financing mechanisms are reshaping battery storage economics for both front-of-the-meter and behind-the-meter applications. Battery optimization stakeholders, including electricity wholesale market operators and grid operators, battery optimization software companies, battery project developers and owners, utilities, energy retailers, and energy traders, can explore recommendations on optimizing battery usage and navigating financial risk for battery revenue streams.

Electricity market products and services in the U.S. and Europe are a key focus in this report, along with the mechanisms for generating revenue from these markets. The ancillary services market is becoming saturated in the U.S. and Europe, and energy arbitrage, time shifting, and transmission and distribution upgrade deferrals are expected to become the predominant revenue source for battery projects.