PJM BESS developers’ struggles to get financing are often due to inaccurate financial modelling, enSights CEO says

Revenue stacking involves combining utility savings, demand charge reductions, energy arbitrage, and capacity payments. It requires more historical consumption data than most developers have to prove the same kWh is not counted twice.

“When you are looking on, let’s say, three months of history, you see certain trends. If you look on two quarters, or a year, you see different trends,” Maskovich said. Three months might show summer peaks, but doesn’t capture how projects behave through full business cycles.

Storage vs. solar

After two decades working with commercial and industrial (C&I) customers on decarbonisation, Maskovich said he has noticed the BESS industry making some of the same mistakes the solar industry made years ago.

The solar industry’s expansion included projects that underperformed expectations. Maskovich thinks BESS faces similar risks but at an elevated level due to its complexity.

“Solar is a bit easy in comparison to storage,” he said. “Storage is a different animal.”

Solar systems require relatively straightforward maintenance. Batteries need more careful management—charging speed, temperature control, and operational decisions all affect degradation rates. Manufacturers perform differently, and battery performance depends on ongoing operational choices rather than following predictable curves like solar.

“Storage is like a gentle creature that needs careful attention from us,” Maskovich said.

AI tools have made financial modeling faster, but not necessarily more accurate.

“Data accuracy is one of the most important things because everyone can put their assumptions and models on Claude or other AI tools, and then they trust it,” Maskovich said.

However, he’s seen projects financed based on assumptions that didn’t match actual performance. “When you are coming to finance projects and the assumptions are not accurate, then it expires all future deals to come.”

Operations and economics

Maskovich also emphasised financial performance first and foremost. “The assets are judged operationally and less so financially. Everything should be connected to the financial side of things.”

This can also matter more for BESS than for solar. A battery that degrades faster than expected can undermine the business case, and if it doesn’t reduce peak demand as modelled, customers may end up with higher utility bills than before installing storage.

Maskovich sees opportunities in PJM for behind-the-meter (BTM) storage that can help facilities manage costs while supporting grid stability.

“The economics today make sense. BTM I think is going to be a huge accelerator for bringing energy online and stabilising the grid and helping with all these bottlenecks,” he said.

However, the industry needs to focus on performance management, use validated data for modeling, and connect operational decisions to financial outcomes.

“It is important to look at the industry as a whole before making the same mistakes that have been done on the solar side of things,” Maskovich noted.

ESN Premium subscribers will be able to read the full interview with enSight’s Alon Maskovich in a feature article to be published in the coming days.

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