Experts at the ongoing Energy Storage Summit 2026 have cautioned against treating co-located storage as a “silver bullet” to prop up commercially underperforming solar assets.
A panel discussion on energy storage business models at this week’s event in London heard that co-location as a fix for stranded solar assets had been “over-hyped”. The summit is hosted by Energy-Storage.news’ publisher Solar Media, part of the Informa Group.
Panel moderator Anna Darmani, principal energy storage analyst at market research firm Wood Mackenzie, highlighted how Europe’s energy storage market is dominated by standalone systems, with some exceptions such as Spain. Here, co-location of storage with solar PV has become a priority since the Iberian Peninsula power blackout last year. She asked the panellists their views on the future of co-location in Europe.
“We did the analysis on the share of hybrid projects coming online [globally], and Europe is behind any other market that has the same level of renewable development in terms of co-located energy,” Darmani said. “So I’m curious to see what your take on that is, is it going to change in the future, and how?”
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Tom Smout, head of energy storage at consultancy LCP Delta, said: “Co-location has a place, but I think it’s quite overhyped by a lot of people. It can be good business, but for quite boring reasons, where it’s a good way to use the land that you have, with a great connection that you have, and those are meaningful assets. And sometimes good business is just using the assets that you have and realising the value of them.
“But from a system perspective, standalone storage is the most important because it provides the up and down frequency regulation, which is the thing that is technically the best. And then, from a portfolio perspective, if you have a solar asset which is eating a lot of negative prices, you’re better off having a standalone battery as a hedge, rather than putting a battery on site with that solar asset to hedge that asset.
“There’s a place for co-location, but I do sometimes worry that … a lot of people who have or are worried about building stranded solar assets are responding by building batteries that are going to become stranded batteries. Don’t just build a mediocre asset to salvage one that is underperforming; try and build a good asset and balance out your portfolio.”
Dan Connor, CEO of net-zero platform Dais Energy Ventures, echoed this view. “Don’t try and make your solar project work by putting storage on it, because if the solar doesn’t work by itself, it’s unlikely that the storage is going to suddenly make it work and be the silver bullet,” he said.
“I did a co-located asset in the UK with a previous company, and that was with very established structures around how to meter and manage all of these things and do all of that. And that was a nightmare. How do you contract for it? How do you get contracted revenues versus the PPA that you’ve got on your solar farm that is maybe pay-as-produce? So then your battery is always kind of subservient to what your solar is doing. How does that work? If you put that on a spreadsheet, it looks like it can make sense, but the reality of it is that it’s very difficult. I think co-located [storage] absolutely has a place, but only after standalone has been established.”
Offering a different perspective, Dario Hernandez, head of energy storage at NextEnergy Capital, said that in some European countries with solar-heavy grids, co-location might be the only option for storage.
“One common theme in every single market is that the grid is extremely saturated; the lack of grid connection points is astonishing. And, ultimately, you might be left with the only option to co-locate the battery if you want to get storage in the ground. So I think, in southern Europe and solar [dominated] countries, we will see co-location going big time.”
