Madrid / 2025-12-17 – In markets with rising price volatility and higher demand for flexibility, adding battery storage to a solar PV plant is increasingly a commercial decision rather than a purely technical one. This analysis explains how storage increases revenues, the main revenue streams, and the key variables that determine return on investment.
Since 2021, European power markets have exhibited stronger price spikes and more intraday opportunities than in previous years. In Spain, participation across OMIE (day‑ahead), intraday markets, and balancing services operated by the system operator (REE) creates commercial pathways for storage: time‑shift arbitrage, frequency and reserve services, intraday trading, and curtailment mitigation.
HOW A PV + BESS PRODUCES REVENUE
- Price arbitrage: shifting solar generation from low‑price hours to high‑price windows.
- Balancing and frequency services: providing fast power response to reserve markets (aFRR/mFRR), which reward speed and precision—core strengths of batteries.
- Intraday market access: the BESS enables post‑day‑ahead repositioning to capture volatile intraday prices.
- Curtailment avoidance: storage absorbs otherwise curtailed energy, improving asset utilization.
- Higher contract value: controllable dispatch can make PPAs or bilateral sales more valuable.
ORDER OF MAGNITUDE: HOW MUCH MORE REVENUE?
The uplift depends mainly on market price patterns, the battery size relative to PV (kWh per kW), and the commercial strategy (arbitrage only vs. stacked services). Industry analyses and market participants typically report indicative ranges:
- Conservative uplift: 5–12% additional revenue when a battery is sized for simple curtailment reduction and basic arbitrage.
- Midcase uplift: 12–30% if the BESS actively participates in intraday markets and some reserve services in a moderately volatile market.
- High-case uplift: 30–50%+ in years with extreme volatility when the BESS captures both price spikes and payments for capacity/services.
Illustrative example (hypothetical and scalable):
- Plant: 10 MWp, annual output ~15 GWh (17–18% capacity factor).
- Baseline merchant price: assume an average of €80/MWh (varies widely by year).
- Base annual revenue (no storage): 15 GWh × €80/MWh = €1,200,000.
A 10 MWh (1h) battery enabling ~15% extra revenue via arbitrage and intraday would add ~€180,000/year. If it also secures another €70,000–€150,000 from reserve services, total uplift could be €250,000–€330,000 (20–28% more).
ROI DRIVERS
- BESS CAPEX/OPEX: installed cost per kWh and lifecycle O&M drive payback. Declining battery prices have materially improved economics in recent years.
- Sizing: too much power relative to energy limits the value capture window; too much energy with insufficient power limits peak response capability. Optimal sizing mirrors local price dynamics.
- Degradation and warranties: cycle life and capacity fade reduce future revenues and must be integrated into the LCOE of the combined asset.
- Market access and product design: remuneration and entry rules for reserve markets vary by country and year.
- Aggregation and participation rules: the ability to aggregate assets and sell flexibility commercially enhances monetization.
MARKET CONTEXT IN SPAIN
Spain’s market architecture (OMIE and REE) has progressively opened revenue routes for storage, but market design, product parameters and gatekeeping rules shape actual revenue potential. The greater penetration of variable renewables and electrification increase the frequency of price events that raise the marginal value of storage.
ENVIRONMENTAL AND SYSTEMIC IMPACT
Co‑located storage improves renewable integration, reduces curtailment, and provides rapid firming services—displacing fossil peakers during demand peaks and reducing system emissions when recharged from low‑carbon sources. From a systemic viewpoint, storage can defer transmission upgrades and reduce grid stress.
CONCLUSION: LIKELY A POSITIVE IMPACT ON REVENUE
If you had installed storage at your solar park in recent years, you likely would have earned more: conservative estimates point to a 10–30% uplift in many cases, with higher upside in particularly volatile market years. The exact benefit depends on BESS sizing, market access, and the operator’s strategy. For PV owners serious about maximizing asset value, storage is now a central strategic decision rather than an optional add‑on.
