Introduction: the day electricity stopped being invisible
At 12:33pm on an otherwise unremarkable weekday on the 29th of April last year, the Iberian Peninsula went dark.
Factories stalled mid-process. Data centres flipped to emergency protocols. Offices froze, literally and figuratively. Lifts stopped between floors. Phones filled with variations of the same question:Â what just happened?
This wasn’t a generation failure. Solar was plentiful. Wind was doing its job. The problem was coordination. Flexibility. A grid built for a centralised, fossil-heavy past, now straining under decentralised supply and electrified demand.
And in boardrooms across Spain and Portugal, something shifted.
Electricity stopped being background noise.
It became a variable.
A volatile one.
Since then, conversations with business leaders globally have changed. Less talk of sustainability optics. More talk of exposure. Of continuity. Of cost predictability.
Which helps explain why renewable Power Purchase Agreements, particularly solar paired with battery energy storage, are moving rapidly from “interesting option” to core operating infrastructure.
Not because companies want to become energy developers.
But because volatility is expensive, outages are existential, and fossil-indexed power markets have shown they’re no longer fit for modern business planning.
The data says… this is cheaper, dispatchable, and off your balance sheet
Let’s start with the fundamentals.
Solar is now the cheapest form of new electricity generation ever recorded. According to the IEA’s 2025 renewables update, utility-scale solar undercuts new fossil generation in almost every region, even before subsidies are considered.
But the real inflection point comes when solar is paired with batteries.
Battery costs have fallen by roughly 50% in the past two years, and the IEA expects global battery capacity to grow six-fold by 2030, driven primarily by grid flexibility and commercial deployments.
This is already visible in real systems.
Ember’s 2025 analysis shows that solar met 61% of total US electricity demand growth last year, with batteries increasingly shifting that power into evening peaks, when electricity is most constrained and most expensive.
That changes the equation.
Solar plus storage is no longer just cheap electricity.
It’s dispatchable, predictable electricity.
And here’s the part that matters most to CFOs and boards:
For most companies, these systems require zero upfront capital.
No capex.
No balance-sheet strain.
No depreciation headaches.
Developers finance, build, own, and operate the assets. Companies sign long-term PPAs and pay a fixed opex charge for electricity, typically lower than utility tariffs from day one, and insulated from wholesale price swings for 15–25 years.
Cheaper power.
Predictable costs.
Capital preserved for the core business.
That’s not a climate story.
That’s a finance story.
The implications… energy risk has escaped the utility department
Three structural forces are colliding.
Affordability is no longer forecastable
For decades, electricity prices wobbled but behaved.
That era is over.
Gas-indexed markets delivered volatility that made budgeting speculative. In parts of Europe, industrial power prices doubled and tripled within months. CFOs discovered that “market exposure” is another way of saying “open-ended risk”.
Solar + storage PPAs replace that chaos with known costs. Fixed opex. Long-term visibility. Predictability becomes the product.
And crucially, it’s achieved without tying up capital.
Security has overtaken climate as the entry point
Climate targets still matter. But energy security now opens doors climate arguments never could.
Geopolitical shocks. Transmission congestion. Extreme weather. Data centres competing with industry for capacity. All point to the same conclusion: relying solely on distant generation and overstretched grids is an operational gamble.
Behind-the-meter solar and storage don’t eliminate grid dependence. But they reduce it materially.
And they do so without asking companies to become utilities.
Resilience is now engineered, not improvised
Resilience used to mean diesel generators and crossed fingers.
Today, it means batteries, islanding capability, and intelligent load control.
Solar + BESS systems do double duty. Under normal conditions, they lower operating costs and arbitrage tariffs. Under stress, they keep critical operations running.
That dual value proposition, combined with opex-only economics, explains why storage now appears in almost every serious corporate energy discussion.
A critical shift: these systems don’t just protect companies, they stabilise the grid
This still isn’t being said loudly enough.
Solar, batteries, and microgrids don’t merely avoid grid stress. They actively remove it.
When businesses deploy behind-the-meter solar and storage:
Peak demand is reduced at precisely the worst moments
Batteries discharge during heatwaves and cold snaps, exactly when grids strain and fossil peaker plants would otherwise fire up at extreme cost.Transmission congestion eases without new infrastructure
Local generation means fewer electrons forcing their way through overloaded corridors, deferring upgrades that take years and political alignment to deliver.Flexibility appears instantly
Batteries respond in milliseconds. Gas plants don’t. Emergency legislation certainly doesn’t.
This isn’t altruism.
It’s physics.
Electricity arbitrage, often misunderstood as gaming the system, is in fact the system working properly. Charging when power is abundant and cheap. Discharging when it’s scarce and expensive. Flattening peaks. Smoothing volatility.
That’s why grid operators increasingly pay batteries and flexible loads for frequency regulation, congestion relief, capacity availability, and demand response.
Companies with solar + BESS aren’t freeloading on the grid. They’re becoming distributed grid assets.
Interestingly, in several markets, commercial-scale batteries already respond faster to grid disturbances than traditional spinning reserves, meaning ordinary business sites now perform functions once reserved for national infrastructure.
This is national energy security, just decentralised
Here’s the strategic leap worth making explicit.
A power system with:
thousands of commercial batteries,
millions of distributed solar installations,
islandable microgrids around factories, hospitals, and data centres
is harder to break, harder to attack, and faster to recover.
Centralised systems fail big.
Distributed systems fail gracefully.
From cyber risk to climate extremes to fuel supply shocks, decentralisation buys optionality. And optionality is the currency of resilience.
Governments need to understand this. Grid operators understand it. Defence planners certainly do.
What’s lagging is corporate recognition that private, opex-driven investment is now underwriting public grid stability.
The trade-offs… because this isn’t a free lunch
Solar + BESS PPAs solve a lot of problems. They do not solve all of them. And pretending otherwise is how projects die in procurement, legal, or the CFO’s office.
Here are the real downsides.
Long-term contracts cut both ways
PPAs are long. Fifteen, twenty, sometimes twenty-five years.
That duration enables low prices and zero upfront cost. But it does assume a degree of stability in your footprint.
If a site closes early, relocates, or dramatically changes load, unwinding a PPA can be painful.
The risk isn’t contract length. The risk is signing one without thinking hard about how the business might evolve.
Escalators matter
Many PPAs include annual price escalators, typically 1–3%.
In a world of perpetually rising prices, that’s fine. In a world of rapidly falling renewable costs, it deserves scrutiny.
Comparing PPA pricing to today’s spot prices misses the point. The real comparison is against risk-adjusted future prices, including volatility, scarcity pricing, and grid charges that rarely fall.
Escalators should be negotiated. Flat pricing, capped escalation, or partial indexation are increasingly achievable. If escalation is treated as non-negotiable, that’s a warning sign.
You give up upside by not owning the asset
This is true, and it’s worth stating plainly.
Owning solar and storage outright can deliver higher lifetime returns, especially if you can capture tax incentives and depreciation.
But ownership also brings capex, performance risk, maintenance, insurance, compliance, and asset management for decades.
PPAs trade maximum theoretical return for certainty, simplicity, and capital preservation. For many organisations, that’s a rational choice.
Creditworthiness is required
Because the developer is funding the asset, your balance sheet matters.
Strong credit is often a prerequisite, particularly for long-tenor contracts. That can be a barrier for smaller firms, though aggregation and portfolio structures are widening access.
It’s a constraint, not a flaw. But it needs to be acknowledged upfront.
Batteries add complexity
Storage is transformative. It also complicates things.
Batteries require space, fire safety approvals, and sometimes higher insurance premiums. They can lengthen permitting and interconnection timelines.
This isn’t a reason to avoid storage. It’s a reason to plan properly and work with partners who’ve done this before.
The risk isn’t batteries.
It’s underestimating the friction around them.
The strategies… what leaders should actually do next
Strip away the slogans. Four actions matter.
Start with load, not targets
Before press releases or vendor decks, understand your demand profile in painful detail.
Hourly load. Seasonal swings. Electrification plans. Growth trajectories.
The best PPA outcomes come from companies that know their energy use better than anyone else.
Treat PPAs as operating infrastructure
A twenty-year PPA is not a transaction. It’s a service contract.
Developers carry the capex and operational risk. You pay for delivered electricity, typically at a lower cost than utility supply.
That alignment is why this model scales.
Add storage early, not eventually
Waiting for batteries to get cheaper feels sensible. It usually isn’t.
Storage unlocks tariff optimisation, resilience, and grid services revenue. Designing for it upfront avoids expensive retrofits and lost optionality.
Design for microgrids, even if you never island
You may never fully disconnect from the grid. That’s fine.
But systems designed to be islandable are inherently more valuable. They future-proof sites against grid stress, regulation, and climate shocks.
Microgrids aren’t ideology.
They’re contingency planning delivered as opex.
Closing: back to that blackout
When the lights came back on across Spain last spring, nothing fundamental had changed. The grid was still fragile. Demand was still rising. Electrification was still accelerating.
But perception shifted.
Energy stopped being invisible.
Solar + storage PPAs aren’t a silver bullet. They don’t fix grids overnight. They don’t eliminate risk entirely. But they move companies from exposure to agency.
From price-takers to planners.
From hoping the grid holds to helping it do so.
From capex anxiety to predictable opex.
Quietly, this is how systems change.
This article was first published on TomRaftery.com. Photo credit Brookhaven National Laboratory on FlickrÂ