Making BESS warranties work: Contracts vs. reality
Source：pv magazine
Current BESS warranty structures often limit operational flexibility, restricting how assets can be used – even when technically capable of more.
Unlike commercial warranties, which are short-term and typically cover component defects at the beginning of an asset’s life, performance warranties span up to 25 years and guarantee specific operational standards over time. However, these long-term conditions can significantly constrain the ability to fully monetize BESS assets. As a result, performance warranties are becoming one of the most critical – and contentious – topics in BESS asset management today.
This very issue was the focus of an in-depth discussion at the ‘Get Enspired! 2025’ conference, held in Berlin last week.
A developer’s perspective
“If you’re driving a Ferrari in first gear, you’re not getting the most out of it,” said Constantin Vana, a co-founder of Australian developer BlackVolt, summing up the industry’s frustration with rigid warranty terms.
Instead, Blackvolt advocates for dynamic, usage-based warranties – frameworks that adapt annually to how a system is actually operated. With these more realistic structures, developers say they can unlock up to 20% more revenue, especially through multi-market revenue stacking – from Frequency Containment Reserve (FCR) to automatic Frequency Restoration Reserve (aFFR) to quarter-hourly wholesale trading.
Blackvolt representatives also underlined that warranties must account for system repowering around year 10, particularly in 20-year asset lifespans. By accounting for midlife upgrades into performance expectations, developers can maintain output without breaching contractual thresholds.
This is essential for projects relying on revenue stacking, where different services require varying depths of cycling and state-of-charge ranges.
Finally, flexible warranties matter as they provide operational freedom to comply with future market rules, system needs, or grid codes.
“Running a BESS with an inflexible guarantee is like paying rent all year for an umbrella shop, but being forced to keep the same daily stock; so when the rainy week comes, you sell out in the first hour and miss the payoff,” said Gregory Green, managing partner at BlackVolt.
Designing for real-world use
Some BESS integrators are responding by adjusting how they structure performance guarantees. One major shift involes moving away from simple cycle counts at full power. While warranties tied to full charge/discharge cycles at rated power may appear straightforward, they often fail to reflect real-world operating conditions – and can impose unnecessary thermal stress on the system.
Trina Storage, for instance, has adopted a rolling average concept, offering flexible performance warranties that reflect operational behavior more accurately. A key feature of this approach is defining cycles based on a 0.5C charge/discharge rate over a 24-hour period, including resting time between cycles.
Rather than allowing four full-power cycles a day – technically possible but thermally aggressive – Trina recommends limiting continuous operation to around 0.25C, allowing the system to run nearly non-stop without exceeding stress thresholds. Trina’s warranty model typically assumes around 548 cycles per year, or roughly 1.5 cycles per day, aligning more closely with market realities and grid needs.
“How can we ensure those warranties? By knowing our cells and their thermal management inside out,” said Lars Koerner, senior sales engineer at Trina Storage.
Contracts, enforcement, and reality checks
Even with more nuanced warranty structures, enforcement remains a major challenge. Integrators now rely on real-time data from power conversion systems and battery clusters, applying rolling average calculations over 24-hour periods. Some systems even issue automated alerts when usage approaches contractual limits.
But ultimately, the enforceability of warranties depends on how contracts are written – and whether the operational strategy makes economic sense.
“You may sign a contract allowing four cycles a day, but unless you find four real revenue opportunities daily, you’re just burning through your battery for no reason,” said Jürgen Pfalzer, chief growth officer at enspired.
Adding to the complexity, some integrators now advertise 100% usable state of charge (SoC). While technically possible under tightly controlled conditions, these warranties may not hold up under aggressive cycling strategies.
According to Pfalzer, different warranty parameters can significantly impact BESS revenue outcomes. For example, offering 100% usable state of charge (SoC) can increase annual revenue by up to 7%, while eliminating resting period requirements can boost revenue by an additional 12%. Increasing the average daily cycles from 1.5 to 2 yields around an 11% gain, and moving further to 2.5 cycles per day can add another 8%. Even incremental improvements matter – each 1% increase in round-trip efficiency (RTE) translates into approximately 0.37% more revenue.
Informed by enspired’s modeling, optimizing these performance parameters can materially shift the financial profile of an asset. For example, improving RTE from 89% to 90%, usable SoC from 95% to 100%, daily cycles from 1.8 to 2, and system availability from 97% to 99% can collectively raise energy throughput and revenue by approximately +11.5%.
For a 50 MW / 100 MWh BESS, that translates to an additional €1.5 million in annual revenue, or €15 million over 10 years – generating €290k EUR/MW/year.
Ultimately, the message from the panel was clear: performance warranties must evolve with the market. Smarter warranties are not just about protecting equipment – they’re about unlocking value and ensuring long-term profitability in a fast-moving energy storage market.