Bank financing remains one of the main bottlenecks for the development of battery energy storage systems (BESS) in Spain. Although the market believes this technology will be the next major driver of investment, financial institutions are still not financing these projects on a large scale because they lack stable and predictable long-term income. At the same time, the photovoltaic market is undergoing a significant correction that has reduced the value of Ready-to-Build (RTB) projects to a maximum of €50,000/MW , a far cry from the valuations recorded just three years ago, which hovered around €200,000/MW.
In a dialogue with Energía Estratégica , Carmen Izquierdo Serrano , CEO of Nteaser , argues that the Spanish renewable market is undergoing a structural change , where the most valuable asset is no longer generation but the flexibility provided by storage.
" Right now we're seeing prices between 0 and 40,000 euros per megawatt, and 50,000 would be a very good case. I say 0 because there are some projects that really have no value or don't even make sense to build ," said Izquierdo Serrano, referring to Ready to Build photovoltaic projects that do not include battery hybridization.
The executive explains that the collapse in valuations is due to the excess of photovoltaic capacity incorporated in recent years , which ended up causing a strong cannibalization of prices in solar hours.
"We have reached a point where photovoltaics has cannibalized itself to a radical degree, and right now these photovoltaic-only projects have lost a significant amount of value," he stated.
Just three years ago, an RTB project could be sold for around €200,000 per MW. At that time, the scarcity of fully permitted assets and high electricity prices were driving sales.
"All the photovoltaic transactions we are handling are for photovoltaic plants that are already hybridized, in the process of being hybridized, or plants that are going to be hybridized. The buyer is already thinking about incorporating batteries because that's what makes sense," said the CEO of Nteaser.
"A photovoltaic project is essentially a connection point. A connection point is permanent, and that has value. Not everyone in the market takes that into account, but it needs to be taken into account," he added.
The specialist noted that transactions continue to occur , although with much more selective buyers and sellers who have had to adjust their expectations.
" Sellers who understand that the price of 200,000 euros no longer exists and that they will be lucky to get 40,000 euros sell their projects without problems ," he said.
Banks are still waiting for signs to finance BESS.
While photovoltaics are losing prominence, storage is concentrating market interest, driven by the need to shift solar generation towards peak demand hours.
"Batteries are currently the asset in short supply. The spread is higher than ever, and batteries are the ones that make sense," he stated.
However, that business outlook is still not enough to convince the banks. "Banks tend to be quite conservative. It's a new asset, there's very little track record of operations in Spain, and they need guaranteed income for ten or fifteen years. They don't have that visibility right now," he explained.
According to Nteaser's CEO, the main obstacle is not technological but financial . As long as batteries depend primarily on arbitrage in the electricity market, structuring traditional financing will be difficult.
" They need a guaranteed income and they don't have that visibility today ," he summarized.
Izquierdo Serrano believes that the situation could change when the Spanish market incorporates mechanisms that guarantee stable income, such as tolling contracts or the future capacity market.
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"When the capacity market is developed, it will be possible to guarantee small payments that the bank can discount and say: with this you will pay off the debt," he explained.
It is worth remembering that the European Commission has already given the green light to the Spanish capacity market scheme and, according to industry estimates, the first auctions could be held at the beginning of 2027. If this timeline materializes, developers expect the mechanism to provide the revenue signals that banks are currently demanding to finance BESS projects through project finance .
Along those lines, he highlighted that the first financed operations correspond precisely to projects that already have long-term contracts or developers with extensive international experience, as happened with Grenergy , which signed two tolling contracts in Spain for its Oviedo standalone storage projects of 150 MW and 600 MWh and for its Escuderos hybrid plant.
Even so, the executive warns that the rise of storage must also avoid repeating the mistakes that photovoltaics went through.
"There's a lot of battery development going on, and batteries are also being cannibalized. We have to factor in what will happen when everything currently under development becomes operational," the executive pointed out.
The Spanish situation is no exception, although it does show some delay compared to other European markets where storage already has mechanisms that provide predictability to income.
"The UK finances BESS because it has a mature services and capacity market, with a history of revenues and contracts that provide a bankable floor. Italy is going down the same path with MACSE, which creates precisely that long-term contracted revenue that banks need," he explains.
According to Nteaser's CEO, each European market is at a different stage of development. While Spain incorporated a large amount of photovoltaic capacity before deploying storage, Italy progressed more evenly with both technologies, which prevented such a sharp drop in solar asset valuations.
Meanwhile, Poland continues to expand renewables on a system still heavily dependent on coal, while Germany and the United Kingdom maintain more mature markets, where both photovoltaics and batteries continue to attract investor interest.
More than 50 transactions and a much more selective buyer
Despite the market correction, transactional activity continues. Nteaser, a firm specializing in the purchase and sale of renewable assets, is currently managing around 50 to 60 photovoltaic project transactions in Spain, in addition to storage-related deals.
"Between now and before August, we should be closing three or four photovoltaic deals," says Izquierdo Serrano.
However, the buyer profile has changed radically. Today, investors prioritize Ready to Build projects with low development risk, good construction conditions, and, above all, the capacity to incorporate storage.
"All the photovoltaic transactions we are handling are for photovoltaics that are already hybridized, in the process of being hybridized, or that will be hybridized. The buyer is already thinking about hybridizing that project with batteries because that's what makes sense," he maintains.
In addition to the possibility of incorporating BESS, buyers analyze the quality of the connection point, the length of the evacuation lines, the risk of restrictions ( curtailment ), the location of the asset and the possibility of closing power purchase agreements (PPAs).
The executive adds that early-stage projects have practically ceased to be a priority for the market.
"Why would you buy a project that still needs development if you can buy it for a little more when it's already Ready to Build? Very few people are buying early developments," he concluded.