PV + BESS Co-location: Moving from Discourse to Data

In the solar market, co-location with Battery Energy Storage Systems (BESS) has become a primary topic of discussion. As captured price pressure increases and negative price events become more frequent, developers and investors are increasingly looking to add storage to their renewable portfolios.

However, while the concept is widely debated, it remains sparsely documented with transparent, data-backed case studies. Investors need to understand not just if it works, but how different configurations impact the investment case.

The study compared multiple BESS configurations. In the central case, the results showed simplified IRRs ranging from 13.7% to 14.6%. Interestingly, the 3-hour duration configuration emerged with the highest IRR, balancing revenue capture with capital intensity.

A critical takeaway is that the revenue stack is not static. Ancillary services provide significant value in the early years, while Intraday arbitrage becomes increasingly important as the market matures and volatility patterns shift. Sizing is therefore the most critical lever in this investment case.