Energy storage capacity leasing contract

Why should you lease a site for a battery energy storage system?

Land is the most important resource for the development of battery energy storage systems. Several factors must be considered when considering the leasing of a site for a BESS project, some of the most important being: The size of the land required for a BESS project depends on the capacity of the battery system.

What is an energy storage tolling agreement?

Under an energy storage tolling agreement, the developer of the energy storage system is responsible for obtaining site control, permits, interconnection rights, equipment, and construction contracts, as well as achieving agreed-upon milestones such as a target commercial operation date and a guaranteed commercial operation date.

Why are solar & battery storage lease rates increasing?

The increasing demand for land suitable for solar and battery storage projects has driven up lease rates in recent years, especially because of the incentives offered by the IRA Renewable Energy. As the industry expands, competition for land is intensifying, particularly in regions with favorable solar and wind resources.

Do energy storage tolling agreements restrict a developer's use of a battery?

As the energy stored in the battery belongs to the buyer, energy storage tolling agreements will often prohibit or restrict the developer’s use of the storage system for station service. The inclusion of this condition requires that the developer enters into a retail service contract for the system’s non-storage load.

What is the average lease rate for solar projects?

Recent research by Purdue University revealed that the average lease rate for solar projects has exceeded $1,000 per acre in many regions. With the growing interest in BESS projects, it’s reasonable to expect similar trends in land lease rates for battery storage facilities.

What is a battery energy storage system?

Battery Energy Storage Systems (BESS) are rapidly emerging as a critical component of the renewable energy landscape. As the demand for clean and reliable energy grows, BESS plays a crucial role in ensuring grid stability and optimizing energy utilization. Land requirements are a significant factor in the development of BESS projects.