Access to capital for projects incorporating battery energy storage systems (BESS) is undergoing a fundamental shift . Traditional bankability criteria linked to CAPEX, resources, contracts, and expected production are no longer sufficient for a technology that introduces new operational, safety, and performance risks.
In dialogue with Energía Estratégica , Jesús Serrano , Product Manager P.04 MX and Regional Coordinator PVPP NAM+SAM of TÜV Rheinland, and Julio Ramírez , Senior Solar Project Engineer of TÜV Rheinland Mexico, warn that they are observing that banks, funds and investors are incorporating a much deeper layer of technical evaluation before committing capital.
“ With the rise of storage, a bankable project is no longer just one that 'works on paper,' but one that can demonstrate that its technological and operational risks were credibly identified, assessed, and mitigated ,” the specialists pointed out.
The transformation directly alters what it means to present a bankable asset. A few years ago, the analysis was much more focused on CAPEX, resources, contracts, and expected production . Now, the scrutiny extends to security, maintainability, degradation, interoperability, operational strategy, actual guarantees, supplier capability, and quality of execution.
The consequence is especially relevant for developers structuring BESS projects: engineering is increasingly becoming intertwined with financial decisions . Expected performance is no longer analyzed in isolation but is linked to the asset's ability to sustain safety, availability, and revenue throughout its useful life.
From CAPEX and contracts to degradation, security and guarantees
“ One of the main underestimated risks continues to be thinking that a BESS is only a 'piece of equipment' and not a highly integrated system ,” Serrano and Ramírez point out.
Within that evaluation appear variables that may have consequences on future bankability: thermal safety and propagation of events, integration of components from different manufacturers, degradation under demanding profiles, quality of installation and commissioning, and the operation and maintenance strategy throughout the life cycle.
For specialists, simply supporting a project with nominal product characteristics is also insufficient. This logic helps explain why technical due diligence is acquiring a different level of depth .
“ In less mature markets, minimum regulatory requirements still predominate, but in utility scale projects and critical applications, additional technical evidence is increasingly requested, whether in the form of certifications, tests, technical due diligence, factory inspections, bankability reviews or more in-depth documentary reviews,” says TÜV Rheinland.
From factory to operation: what is examined more rigorously
The increased requirements are not limited to simply adding documentation. TÜV Rheinland points out that, compared to five years ago, functional safety, interaction between subsystems, traceability of critical components, manufacturing quality, thermal management, and cybersecurity of control systems are now analyzed in greater detail .
Also gaining importance is the consistency between the projected design and what is ultimately installed and operated. This involves reviewing the asset throughout its entire life cycle: how it leaves the factory, how it performs in the field, how it ages, what maintenance it requires, and how it responds to abnormal conditions .
“ Today, a technical problem is no longer measured solely by the failure itself, but by its impact on availability, security, revenue, and reputation ,” the executives point out.
The increased complexity and capital intensity of projects simultaneously intensify scrutiny from banks, insurers, investors, and offtakers . In this context, independent certification or assessment can become a key element in reducing uncertainty before financial close.
Continue reading
“ An independent certification or a technical evaluation carried out by a recognized third party helps reduce information asymmetries, provides greater confidence in the conformity of the equipment or system and facilitates decision-making by investors, banks, insurers and buyers ,” Serrano and Ramírez explain.
Furthermore, this type of validation can accelerate due diligence processes, reduce technical questions, and help structure financing conditions .
In parallel, the increasing penetration of renewable energy opens a new technical front. Specialists anticipate that BESS systems will need to incorporate more and more grid-forming capabilities , including voltage and frequency regulation and black start .
The downside will be economic. “It should be considered that using BESS systems with strong grid forming capabilities will result in additional BESS costs, since it requires initially oversizing the system's capacity due to the demands of those capabilities,” they warn.
Latin America is progressing, but at different speeds.
The requirements are not uniform across regions either. TÜV Rheinland observes that Europe and North America have a more structured set of technical requirements, traceability, document validation, and compliance, supported by more active participation from insurers, laboratories, authorities, and financial institutions.
Latin America, on the other hand, remains more heterogeneous. Projects subject to very demanding international standards coexist with others where cost and speed of execution still carry more weight .
“ What we see is that the region is rapidly evolving towards schemes of greater technical professionalization ,” Serrano and Ramírez assert.
Within the region, specialists identify Chile, Brazil, and Mexico as relevant markets due to their volume, technical sophistication, and exposure to international investors, while also noting progress in Colombia and certain segments of Central America.
Chile stands out for its incorporation of storage and the complexity of its electrical system; Brazil, for its scale and technical evolution; and Mexico maintains an industrial base and experienced actors where quality continues to function as a differentiating element .
However, executives introduce a variable that may be even more decisive than geography: “ Beyond the country, today the decisive variable is often who finances, who develops and what contractual standard the project requires .”
New solutions to anticipate failures and reduce risk
In response to these new demands, TÜV Rheinland is developing tools to identify technical deviations before they lead to performance losses, operational failures, or contractual disputes.
“ We identified a very clear need: the market requires more agile, objective and specialized tools to detect technical deviations before they become operational failures, performance losses or contractual disputes ,” the specialists explain.
For BESS projects, the company offers comprehensive technical support from the early stages, aimed at reviewing safety, compliance, quality, integration, and performance. In photovoltaics, one of the solutions incorporated is electroluminescence inspection using drones, which allows for increased speed and coverage of assessments.
The objective is to detect problems early on that originate during manufacturing, transport, installation, integration or commissioning , when it is still possible to correct them before they compromise warranties, availability or operating costs.
The company also plans to collaborate with governments to advance independent quality, safety and performance assessment procedures , especially given the multitude of suppliers and technologies available.