Energy Storage Financial Analysis

energy storage valuation

Fractal builds proprietary financial models to assess the lifetime value of your energy storage project. Our models take into account the specific technology and design parameters of your project. Fractal goes beyond manufacturer’s datasheets and marketing collateral. Instead, Fractal applies real world parameters drawing from primary research of behavior and maintenance cycles from years of hands-on energy storage operation.

Note: Fractal does not use inaccurate software or third-party models. Fractal has in-house, high resolution financial modeling tools built based upon years of industry and technology experience. models

Fractal implements cutting edge, flexible, high resolution financial modeling tools to screen the cost-effectiveness of energy storage for our clients. Fractal takes the following into account and creates a 20-year financial forecast:

check2 Project Life
check2 Battery Swap
check2 Salvage Value
check2 O&M Inflation
check2 ITC / Incentives
check2 O&M Costs
check2 Debt
check2 Price Escalation
check2 Discount / Hurdle Rate
check2 Depreciation
check2 Battery Degradation
check2 Wholesale Market Prices
check2 Round-trip Efficiency Losses
check2 Ancillary Services Pricing

preliminary financial analysis of use cases

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Fractal’s evaluation process begins with a preliminary financial analysis of all energy storage Use Cases. If the preliminary analysis shows that a Use Case is near financial viability (B/C near 1), then a detailed financial analysis is performed. Each promising Use Case is systematically analyzed as a potential Business Model using every combination of potential battery sub-chemistry and finance option.

detailed financial analysis of Business Models

Both the preliminary and detailed financial analysis follow the same steps, but they are based on different cost and revenue parameters. Detailed financial analysis studies apply project-specific costs and revenue. The output of the financial analysis includes:

check2 Total Installed Capital Costs check2 First Year Financials
check2 Internal Rate of Return check2 Payback Period
check2 Net Present Value (NPV) check2 B/C
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