Why as-a-service business models are the key to eliminating the roadblocks for renewables
Image credit: ABB
Battery energy storage systems (BESS) as-a-service shifts an ownership model to a service-based approach, writes Robert Wild, Chief Financial Officer, ABB Electrification Service.
By the end of this decade, the International Energy Agency forecasts that global renewable energy capacity will grow by 2.7 times, with solar PV and wind contributing to 95% of capacity growth due to their increasing cost competitiveness.
While the appetite for renewables is growing, structural challenges remain.
Without the ability to store and dispatch clean energy when and where it’s needed, grids remain vulnerable to supply fluctuations. Years ago, we witnessed this firsthand when winter storms caused 40% of the grid operated by the Electric Reliability Council of Texas (ERCOT) to go offline, creating a dangerous gap between demand and production.
Since then, investments in ‘front-of-the meter’ BESS have grown across the United States. In Texas alone, the introduction of BESS since 2023 contributed to $750 million in electricity cost savings while safeguarding against intermittency challenges.
But what of the many commercial and industrial (C&I) customers that have flocked to install renewable energy sources on-site – are they covered?
A complex web of costs
It’s estimated that the global BESS market will reach $150 billion by 2030. Driving this growth is the growing prevalence of behind-the-meter installations, referring to localised power generation for personal and business use.
In particular, C&I customers account for the second largest segment driving this growth. Benefitting segments from on-shore oil and gas to data centres, the implementation of a BESS on-site can go a long way in enabling businesses to manage their energy use and cut costs while ensuring 100% reliable, clean energy 24/7 at a lower cost.
Yet, adoption has been largely hindered by significant capital expenditures required for implementation, and this in spite of the fact that battery costs have fallen by over 90% in less than 15 years.
Why? For one, consider the complex operational requirements, long payback periods, but also ongoing maintenance required – overall, the total investment in a BESS, accounting for the long-term operational costs and maintenance, can run in the millions.
Bearing these cost burdens in mind, consider the fact that these businesses may also lack both the capital and technical expertise to manage investments in energy storage infrastructure.
Charting a new path to adoption
Ultimately, new business models that can support the de-risking of these investments will be the key to driving greater behind-the-meter BESS adoption.
With BESS-as-a-service, businesses are empowered to create value from their existing energy assets while mitigating against the financial strain that often comes with significant capex investments. Instead, they benefit from predictable operating expenses, making it easier to forecast energy costs.
Most importantly, as businesses don’t own the BESS, this transfers the long-term financial burdens – be it expenses from breakdowns and technical issues or long-term maintenance costs – to the provider.
Overall, this derisks energy projects as they are backed by service-level agreements with performance guarantees.
Especially in markets with volatile power surges during peak demand seasons, we’ve witnessed first-hand how BESS-as-a-service can make a difference to a business’ bottom line.
With an asset that can now been monetised, businesses can participate in energy arbitrage, buying electricity at low rates to sell it back to the grid, enabling them to earn a profit by capitalizing on market price fluctuations.
Closing the last mile gap
BESS-as-a-service enables faster, more scalable adoption of energy storage. By shifting from an ownership model to a service-based approach, businesses can access energy storage with minimal risk while maximising cost savings and resilience.
Ultimately, the future of renewables will rest on ensuring that energy storage is financially and operationally accessible to every business, levelling the playing field of cost and technical expertise.
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Industrial decarbonisation strategies: A path forward for utilities
The energy revolution: How BESS-as-a-service drives greater renewables integration
The path to a cleaner, more resilient energy future hinges on solutions that make renewables both viable and dependable – and BESS-as-a-service is a key enabler of that transition.
By removing financial and technical barriers, this model empowers businesses to take control of their energy needs, strengthen their resilience, and unlock new value from their assets.
As the energy landscape continues to evolve and challenges remain, the momentum behind decarbonisation is undeniable, and companies that embrace flexible, scalable energy solutions today will be best positioned to thrive in the energy landscape of tomorrow.
With the right investments, partnerships and policy support, the shift toward a more stable, cost-effective, and accessible clean energy ecosystem is not just possible – it’s already underway.
About the author
Robert Wild is Chief Financial Officer, ABB Electrification Service, where he is responsible for driving the division’s financial strategy.
Bob is a seasoned corporate finance executive with over two decades of experience spanning commercial and operational finance, financial planning and analysis and M&A. He is also passionate about helping industries accelerate their journey to net zero carbon emissions through business models that accelerate access to technologies that enable industrial decarbonisation.
Prior to ABB, Bob served as Chief Financial Officer of the Industrial Services division of GE Energy Connections. His 16-year tenure at GE included three executive positions and leadership within multiple divisions, including Aviation, Energy, Oil & Gas and Electrical Power Distribution.
A graduate of GE’s prestigious Financial Management Programme and Experienced Financial Leadership Programme, he has a proven track record in driving profitability, executing complex financial integrations, and leading large-scale transformation initiatives.
