BESS+PV Co-location Business Case Tool

Client: A Germany-based optimizer / “Direktvermarkter” developing a solar+BESS colocation offering

Client Situation: The client sought to accelerate commercial discussions with solar and BESS asset operators by making the financial trade-offs of different optimization contractual options transparent and actionable.

Client Challenges:

• Complex Trade-Offs: Colocated BESS operators struggle to understand how different optimization strategies optimization contractual options (e.g. Merchant, Floor, Toll) impact project cash flows, IRRs, and risk profiles.

• Lack of Standardized Tools: No existing analytical framework to quickly compare scenarios or communicate value propositions to potential optimization customers.

• Origination Bottlenecks: Delays in decision-making due to opaque or inconsistent financial modeling slowed down deal origination and contract signatures.

FlexUp Solution/Work Done: FlexUp supported the development a custom analytical tool to clarify the business case for solar+BESS colocation:

• Cash Flow and IRR Analysis: Built a dynamic financial model to evaluate the impact of various optimization approaches on:

  • Revenue streams (e.g., merchant energy, ancillary services, capacity payments).

  • Operational costs (e.g., battery degradation, O&M).

  • Project IRR and payback periods under different market and regulatory scenarios.

• Scenario Comparison: Enabled side-by-side comparisons of optimization strategies, highlighting trade-offs between revenue maximization, risk mitigation, and asset longevity.

• User-Friendly Outputs: Designed the tool to generate clear, visual reports for use in commercial discussions, ensuring transparency and alignment with operator priorities.

Outcome:

• Accelerated Origination: The analytical tool streamlined origination conversations, reducing time-to-contract by providing operators with immediate, transparent insights into the value of colocation.

• Competitive Differentiation: Positioned the client as a trusted, data-driven partner, capable of delivering tailored and financially robust solar+BESS solutions.

• Scalable Solution: The tool became a cornerstone of the client’s commercial strategy, enabling faster deal cycles and higher conversion rates in the colocation market.