BOULDER, Colo., May 2019 — A new report from Navigant Research discusses how energy storage value-added services (VASs) have evolved and how the storage industry has grown by using VASs to reduce customer risks.
Because potential customers are generally unfamiliar with energy storage system (ESS) technology, VASs are required for projects to be considered bankable by customers and investors. These services shift technological and financial risk for project performance from customers to the battery hardware providers and systems integrators that design and build an ESS.
“VASs include operations and maintenance (O&M), warranties, and performance guarantees, which are collectively fundamental components of any project proposal,” says Alex Eller, senior research analyst at Navigant Research. “Energy storage VASs have played a fundamental role in the growth of the energy storage industry over the past decade and will remain an important component of new projects.”
To stay competitive in this market, Navigant Research recommends ESS providers continue to innovate on their existing VASs and maintain flexibility in their offerings to design a VAS program to suit the needs of their customers. Vendors of emerging technology (such as flow batteries) need to offer VASs that can reduce the perceived risk to customers by taking on the performance risk themselves.
The report, Energy Storage Value-Added Services Reduce Risk and Unlock Growth Opportunities, discusses how energy storage VASs have evolved and how the storage industry has grown by using VASs to reduce customer risks. The study provides an overview of the ESS project value chain including who provides VASs and innovative approaches that companies are taking to employ VASs in creative ways to reduce risks for customers. The report also analyzes the potential evolution of these services, including opportunities for new business lines and revenue streams to be developed for both incumbents and new entrants in the market.