Massachusetts, USA -- The leasing market has been a boon for the solar industry, ramping up residential installations for the past several years and with continued growth expected for the near future. Now the folks at ViZn Energy Systems hope to spark that same success for the energy storage market. ViZn has partnered with equipment leasing and financial services firm LFC Capital Inc. to offer a leasing program for its flow battery energy storage systems that are paired with solar PV installations for commercial and industrial microgrid applications.
The five- to seven-year lease will be available for 50- to 1,000-kW commercial solar projects that require 80- to 100-kWh of storage — typically up to $5 million installations, according to Ron Van Dell, CEO of ViZn. Customers will be able to purchase the system after the lease is up, similar to a car lease. The systems currently cost up to $540 per kWh for larger installations, according to Van Dell. The average monthly cost of the lease depends on the size of the system — for example, a 250-kWh ViZn system with solar generation would likely cost just under $10,120/month.
Projects where a power purchase agreement (PPA) is not worth the overhead are in the “sweet spot” for this deal where the simplicity of a lease works well, said Van Dell.
“Leasing make sense for solar, and storage allows for better returns, so why wouldn’t you extend financing to solar plus storage? This is our first step in that direction,” said Van Dell. “We’re responding to what customers want.”
Flow batteries are certainly nothing new in the energy storage space. Chemicals are stored in large reservoirs and pumped into the battery during charge or discharge cycles. Since the chemicals are stored in tanks, rather than within the battery, they can be scaled as needed without much extra cost and typically have a much longer lifespan than closed systems. Flow batteries are best at releasing power over a period of time, rather than lithium-ion batteries that are able to release power rapidly, which can help stabilize the grid. However, ViZn is fighting these issues with its non-acid zinc-iron technology.
Alkaline-based batteries can ramp up more quickly than other flow battery technologies. A zinc-iron chemistry allows for fast, deep discharge cycles, and provides safe, non-toxic, non-flammable performance, according to Van Dell, which will allow for a much wider range of applications. ViZn also claims that their system has a 20-year lifespan.
“Batteries are not the friendliest technology around in terms of hazards and safety concerns, so being able to deliver a safe, low-cost energy solution in an environmentally friendly way is a big win for energy storage,” said Van Dell. “We don't think energy storage will be battery packs stacked in buildings somewhere in the desert — we think it will be in neighborhoods near schools and substations.”
Van Dell hopes to see this type of financing spark a similar growth period in energy storage that solar has seen in the past few years. ViZn has gained “dozens” of projects in its pipeline in just one year, and Van Dell said this program might ramp up business by a third.
“The availability of various kinds of financing schemes for solar was fundamental for accelerating the adoption of residential solar,” said Van Dell. “Our focus is more on commercial, but we think the effect will be exactly the same.”