Do lenders finance battery storage projects that aren’t paired with solar PV?

Short answer: Yes — many UK lenders and specialist finance providers will fund standalone battery storage projects, but appetite, structure and terms depend heavily on how revenue is generated, the strength of contracts (aggregator, DNO or offtake), technology warranties and operational counterparty credit. Read on for which lenders typically fund battery-only projects, common finance structures, lender requirements, risk drivers and practical steps to improve your chance of attractive terms — or start a Free Eligibility Check to be matched with the best lenders and brokers for your project.

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Quick answer — Do lenders finance battery-only projects?

Yes — lenders do finance standalone battery storage projects, but the likelihood of getting favourable terms depends on the project profile. Where revenue is contracted or backed by a credible aggregator (frequency response, capacity, DNO flexibility, corporate offtake), banks and specialist asset financiers are more willing to provide lower-cost, longer-term debt. Where projects are merchant (no long-term contracts) lenders are more cautious and typically offer shorter tenors, lower LTVs and higher margins — or ask for stronger sponsor support.

In short: lender appetite exists and is growing, but you need to present clear revenue streams, proven technology and robust legal/technical documentation to secure the best terms.

Why lenders are increasingly interested in standalone battery storage

Several market and policy developments are driving lender interest:

• Falling battery costs and improving lifecycle performance make assets more bankable.
• Growing demand for grid flexibility and services (capacity market, frequency response, DNO flexibility tenders and local energy markets) creates multiple stacked revenue streams.
• Corporate buyers and aggregators now offer contracts that convert merchant risk into predictable income.
• Institutional investors and infrastructure funds are allocating to energy storage, improving secondary market liquidity and refinancing options.

Regulatory and market initiatives from National Grid ESO and Ofgem that enable flexibility markets have strengthened the commercial case for standalone storage, which in turn supports lending.

What types of lenders will finance battery-only projects

High-street and challenger banks

Traditional banks will consider loans for battery projects when there is low revenue risk — for example, long-term contracts with creditworthy counterparties, or when a strong corporate sponsor provides balance-sheet support. They tend to offer competitive rates but stricter covenants and larger documentation requirements. Typical ticket: from several hundred thousand to multi-million for corporate-backed projects.

Specialist energy / infrastructure asset financiers

These lenders focus on energy assets and often lead on asset finance deals backed by the equipment and revenue streams. They are comfortable with technical due diligence and can offer asset-based lending, hire-purchase or leases. Typical ticket: £50k to £10m+ depending on company profile and project size.

Institutional investors, funds & project finance

For larger, SPV-style developments with contracted revenues, institutional project finance or infrastructure debt is common. These lenders underwrite longer tenors and structure senior debt with equity investors. Typical ticket: multi-million to hundreds of millions.

Brokers, mezzanine lenders and alternative finance

When gaps exist (e.g., merchant risk or weak sponsor credit), mezzanine, bridge financiers or specialist brokers can secure flexible but higher-cost capital. These options are useful for staging development and commissioning phases before refinancing.

Typical finance structures for standalone battery projects

Common structures lenders use:

• Asset finance / leasing: Equipment-backed loans or leases where the financier takes a charge over the battery system. Useful for commercial/industrial sites and smaller projects.
• Project finance (SPV): Used for larger builds with defined contracts. Finance sits at the project level, repaid from operating cashflows; senior debt and equity stack is common.
• Receivables / merchant finance: Lenders model merchant revenue and provide shorter-tenor, higher-margin facilities.
• Hybrid approaches: Short-term bridge to cover construction/installation, then long-term refinance with institutional lenders once commercial operations stabilise.

Tennors typically range from 3–15 years depending on lender and how much revenue is contracted. LTVs for contracted assets might be 60–80%; lower for merchant-only schemes.

What lenders want to see — eligibility & documentation

Here’s what lenders usually assess. Prepare these in advance to speed up offers:

• Technology evidence: supplier datasheets, warranty terms (performance, degradation), O&M contracts and service levels.
• Revenue model: detailed forecasts, stacked services (frequency, capacity, arbitrage), and sensitivity analysis (best/likely/worse cases).
• Contracts & counterparties: aggregator agreements, DNO flexibility contracts, PPAs, capacity agreements, or letter-of-intent from corporate customers.
• Consents & permits: grid connection offer, planning (if required), wayleaves, site lease or ownership details.
• Operational credentials: developer/operator track record, commissioning plans and testing regimes.
• Insurance and security: appropriate asset insurance and site security, evidence of equipment registration and serial numbers.
• Financials: company accounts, cashflow projections, and evidence of equity/deposit to be invested.

Quick tip: having an aggregator or DNO contract in place materially improves lender appetite and can reduce pricing.

Grants, incentives & tax considerations lenders factor in

Lenders will account for UK incentives and revenue support as part of cashflow modelling. Relevant schemes and market mechanisms might include local DNO flexibility tenders, Innovate UK or BEIS grant programmes (where applicable), and tax treatments that affect project returns. Grants increase project equity and reduce debt sizing, but lenders treat policy or subsidy changes as potential risks and price them accordingly.

Risks lenders focus on — and how to mitigate them

• Revenue risk: Merchant volatility is the biggest concern. Mitigate via aggregator contracts, PPAs or hedging.
• Operational risk: Degradation, poor performance or supply chain failure — mitigate via manufacturer warranties, O&M agreements and performance guarantees.
• Regulatory risk: Market rule changes affecting revenue streams — mitigate with long-term contracts and legal protections or step-in rights.
• Counterparty risk: Weak aggregator or DNO counterparties — secure stronger counterparties or additional collateral.
• Connection & planning risk: Delays in grid connection or consents can halt project cashflows — ensure documentation and contingency allowances.

Practical steps to improve your chances of approval

Actionable checklist:

1. Build a robust financial model with three stress-tested revenue scenarios.
2. Secure aggregator, DNO or corporate offtake contracts where possible.
3. Choose proven technology suppliers and secure long warranties and clear O&M terms.
4. Obtain grid connection documents and evidence of planning/wayleaves.
5. Prepare clear legal docs: site lease, installation contracts and insurer quotes.
6. Work with a broker specialising in energy storage finance — they know which lenders match specific risk/revenue profiles.
7. Consider staged financing: asset lease or equipment finance for capex, short-term bridge for commissioning.

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Example commercial scenarios (short case studies)

• Small commercial site — peak shaving + DNO flexibility: Asset lease for a sub-500kWh system, lender: specialist asset financier; typical finance: £50k–£500k, tenor 5–7 years, security: fixed charge on equipment.
• Aggregator-backed cluster (mid-sized): Aggregator contract provides predictable cashflow; lender: specialist energy lender or challenger bank; typical finance: £0.5m–£5m, tenor 7–12 years, SPV structure possible.
• Large-scale standalone storage park: Institutional project finance with SPV, senior debt and equity; typical finance: multi-million, tenor 10–15 years, revenue: firm offtake/contracted capacity.

Frequently asked questions

Will a high-street bank give me a loan for a battery-only project?

Sometimes — usually when there is low revenue risk (long-term contracts or strong corporate sponsor). More commonly you’ll find specialist energy lenders or asset financiers offering competitive facilities for contracted projects.

Do lenders require a PPA or aggregator contract?

Lenders prefer contracts that convert merchant volatility into predictable cashflow. Many will lend with aggregator/DNO contracts; merchant-only revenue is possible but brings higher margins and tighter covenants.

Can companies with limited credit histories get finance?

Yes — but expect lower LTVs, higher costs, or the need for stronger collateral or sponsor guarantees. Working with an experienced broker helps uncover appropriate lenders.

What deposit or equity is usually needed?

Equity requirements vary but lenders typically expect material sponsor equity — often 20–40% depending on contracts and project risk. Grants can reduce equity needs if they’re part of the capital stack.

How long does lender due diligence take?

Small asset finance deals can complete in a few weeks; larger project finance transactions can take several months depending on documentation, grid connection and contracting status.

Can I finance EV-charging plus battery together?

Yes — combined energy solutions can be attractive, especially when station cashflows and managed services provide diversified revenue. Packaging assets may improve bankability—but requires integrated modelling.

How UK Business Loans helps you get finance for battery-only projects

UK Business Loans connects businesses with lenders and brokers that specialise in commercial finance and sustainability projects. We are not a lender — we introduce you to lenders and brokers who can provide quotes and guide you through documentation. Our service is free to use and non-binding; the enquiry form is not an application but the information we need to match your project with the most suitable finance partners.

We typically handle enquiries for loans and finance packages from around £10,000 upwards. Complete a quick Free Eligibility Check and we’ll match your project to the right specialists — usually within hours.

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For more detail on sustainability-focused finance options and schemes that can improve a project’s bankability, see our sustainability business loans page on sustainability business loans.

Key takeaways

• Yes — lenders will fund battery storage projects that aren’t paired with solar PV, but terms depend on revenue certainty and project documentation.
• Contracted revenues (aggregator, DNO, PPAs) materially improve lender appetite and pricing.
• Specialist asset financiers and infrastructure lenders are often the best fit for standalone storage.
• Prepare technology warranties, revenue modelling, grid consents and O&M contracts to speed approvals.
• Start with a Free Eligibility Check and we’ll match you to lenders and brokers suited to your project size and risk profile.

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Important: UK Business Loans is an introducer and does not lend or provide regulated financial advice. We connect businesses with lenders and brokers who can provide finance. Submitting an enquiry does not constitute an application and will not affect your credit score. All finance offers are subject to lender terms, credit checks and documentation. Loans and facilities are typically arranged from £10,000 and upwards. See our Privacy Policy for how we handle your information.

1. Can lenders finance standalone battery storage projects that aren’t paired with solar PV?
Yes — many UK banks, specialist asset financiers and institutional lenders will fund battery-only projects, though terms depend heavily on revenue certainty, contracts, technology warranties and sponsor strength.

2. Which types of lenders typically fund battery-only projects?
High-street and challenger banks (for low revenue risk), specialist energy/infrastructure asset financiers, institutional project finance funds and mezzanine/alternative lenders all participate depending on project size and risk profile.

3. Do I need a PPA, aggregator or DNO contract to get favourable finance for a battery project?
Lenders strongly prefer contracted revenues (PPAs, aggregator or DNO flexibility agreements) because they reduce merchant risk and usually deliver lower margins and longer tenors.

4. What finance structures are commonly used for standalone battery storage?
Typical structures include asset finance or leasing, SPV project finance, merchant/receivables facilities and hybrid short-term bridge financing followed by long-term refinancing.

5. How much equity or deposit is usually required for a battery-only project?
Equity requirements vary by risk but lenders commonly expect around 20–40% sponsor equity, with lower LTVs for merchant-only projects and grant support reducing equity needs.

6. What documentation and evidence should I prepare for lender approval?
Provide supplier datasheets and warranties, O&M agreements, detailed revenue modelling with sensitivities, contracts or LOIs (aggregator/DNO/PPA), grid connection and site leases, insurance quotes and company financials.

7. Can businesses with limited credit history or startups get finance for battery storage?
Yes — but they’ll typically face lower LTVs, higher costs or require stronger collateral or sponsor guarantees, and working with a specialist broker improves chances of finding suitable lenders.

8. How long does lender due diligence and funding take for battery projects?
Small asset finance deals can complete in a few weeks, whereas larger project finance transactions often take several months depending on contracting, grid connection and legal documentation.

9. What are the main risks lenders focus on and how can I mitigate them?
Lenders focus on revenue volatility, operational/degradation risk, counterparty credit, regulatory change and connection delays, which you can mitigate with contracts, warranties, O&M agreements, strong counterparties and contingency planning.

10. How does UK Business Loans help and will submitting an enquiry affect my credit score?
UK Business Loans is a free introducer that matches you to specialist lenders and brokers for battery-storage finance, and submitting the enquiry form is not an application and will not affect your credit score.