By Andrea Sanders | Marketing Specialist
Stem’s recent articles in Buildings and The News Funnel discuss why property owners and facility managers are turning to energy storage to make their buildings smarter. More than 400 building owners across California have installed energy storage, and one of their primary motivators is increasing property value.
Any technology that can guarantee persistent savings over time will improve property value by increasing Net Operating Income (NOI). Most technologies that can guarantee savings require high upfront costs and long payback periods, but Stem’s technology is an exception. With a no capital-spend financing platform and strong performance guarantee, Stem can ensure persistent savings through demand charge management and participation in wholesale electricity markets. The strong performance guarantee not only eliminates risk, but also verifies savings for the duration of the engagement, increasing NOI.
The second way storage improves property value is by increasing the amount of leasable space within the building. Property managers can rent out space – that would have otherwise gone used – for the storage system. Increase in rental revenue will improve property value. This model is possible in regions where utilities are compensating storage providers for supporting and balancing the grid, making energy storage economics particularly strong. Stem’s work with Southern California Edison in the Los Angeles West Basin is an example of a utility program that enables property managers to lease space for an energy storage system.
By guaranteeing persistent cost savings and increasing rental revenues, energy storage systems improve NOI, and thus raise property value. In California, New York, and Hawaii, strong utility programs make the economics of energy storage compelling today. As costs continue dropping and more utilities across the country begin utilizing distributed storage assets for grid support, new markets will continue to open up for energy storage.