YNTR: Banks Finally Start to Spend Big on Giant Batteries

You Need to Read Bloomberg Green’s Banks Finally Start to Spend Big on Giant Batteries by Natalia Kniazhevich and Brian Eckhouse.

We need grid-scale battery projects for wind and solar to successfully displace oil, gas, and coal, but banks have been reluctant to get into financing such projects. As lenders become more familiar with the industry, and as constituent parts become less expensive, unlocking more bank financing could spur faster growth in the sector. It’s another great real-world example of our thesis that Where You Bank is What You Build.

Big batteries have long been touted as the future of the electrical grid. But when entrepreneur David Cieminis sought financing for a storage project in California, a state desperate to wean itself off of fossil fuels, he couldn’t reel in a bank.

 

“A month or two ago, I wouldn’t have thought that they would have been interested,” says Cieminis, co-founder and chief commercial officer of Able Grid Energy Solutions. Like other battery startups, the company wound up relying on more expensive private equity for the project.

 

Standalone storage deals also have been scarce because of the newness of the product for project finance bankers—project contracts aren’t yet standardized, says Yayoi Sekine, an analyst at BloombergNEF. The size of a project can be a concern for banks, too. They prefer to avoid financings of $50 million” or less, a threshold some early standalone systems didn’t cross.

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