BESS financial model calculator

How to read the outputs

Project IRR: return of the asset before financing and tax.
Equity IRR: return to the shareholder after debt service.
NPV: value created, in today's euros, at your discount rate.
LCOS: discounted cost of every MWh given back — investment, purchased energy, operations and land included. It is the resale price below which the battery destroys value.
DSCR: ability to cover debt service. On a largely merchant battery, lenders require more than on a contracted asset.
MOIC: equity multiple (total distributed / total invested).

Three traps in a BESS model

Efficiency does not cut revenue, it raises cost. At 90% efficiency, giving back 8,000 MWh means buying 8,889 MWh. Dropping to 80% changes nothing on resale but adds more than 11% to purchases — and that gap flows straight into the DSCR, hence into the debt you can raise.

A single blended price hides the risk. Here, as in any simplified model, arbitrage is reduced to an average price gap. In a credit package each layer — arbitrage, ancillary services, capacity, tolling — must be modelled separately: the contracted share and the merchant share carry neither the same risk nor the same debt capacity.

Land is paid before the bank. A landowner revenue share is an operating cost: treating it as a distribution flatters the DSCR and misleads the credit committee. Switch the base in the calculator — gross or net of charging cost — to see the gap the same percentage produces.

For the full structure of a BESS model, see the battery storage financial model guide. For a generation asset, see the solar ROI calculator.

Frequently asked questions

How do you build a BESS financial model?

You start from usable capacity (MWh) and the number of annual cycles to get the energy discharged, then apply round-trip efficiency to know how much energy must be bought — discharging 1 MWh costs 1/η to purchase. Revenue is the resale of that energy plus, where they exist, ancillary or capacity payments. You deduct charging cost, OPEX and any landowner share to reach EBITDA, then finance with debt and equity. From there come IRR, NPV, DSCR and LCOS. This calculator runs those computations live.

What is LCOS and how does it differ from LCOE?

LCOS (levelised cost of storage) is the discounted cost of every MWh the battery gives back: investment, purchased energy, operations and land charges, divided by discounted discharged energy. Unlike LCOE, which concerns a generator, LCOS includes the cost of the energy BOUGHT to charge — the largest cost line of a battery, and the one round-trip efficiency inflates.

Why does round-trip efficiency matter so much?

Because it does not reduce revenue, it raises cost. At 90% efficiency, giving back 8,000 MWh means buying 8,889 MWh. Moving from 90% to 80% changes nothing on the resale side but increases purchases by more than 11% — and that gap flows straight into EBITDA, hence the DSCR and the amount of debt a lender will size.

Why does the landowner revenue base change everything?

Because buying energy is the largest cost line of a battery. A percentage of gross revenue and the same percentage of revenue net of charging cost are very different numbers. The calculator lets you switch the base so the gap is visible. Either way the payment is an operating cost: it is paid before debt service and therefore reduces the amount a lender will finance.

What DSCR do lenders expect on a battery?

Higher than on a contracted asset, for a simple reason: arbitrage revenue is merchant. On the contracted share (tolling, capacity mechanism) sizing looks like classic project finance. On the merchant share, lenders apply a heavy haircut or exclude it from the base case altogether, and gearing often lands at 40-60% instead of 75% and above.

Does this calculator replace a full BESS financial model?

No: dispatch here is reduced to a number of annual cycles and an average buy and sell price, excluding detailed taxes, working capital and sculpted debt. A bankable model prices each revenue layer separately, relies on hourly price curves, links degradation to actual dispatch, costs the mid-life augmentation and sizes debt on the DSCR — which is what the Wattvalio application does.