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Out of 3 energy solutions financing options we see in the market, developer financing is the one that allows organizations to benefit from on-site solar and storage without hefty upfront costs. Some developers offer a benefit share option, ensuring that your organization will maximize returns.

The advantages of choosing a developer financing option with a benefit share

Choosing a developer financing option and ensuring your energy solutions provider offers a benefit share structure allow your organization to maximize asset value and minimize risk. The benefit share structure creates a partnership where both parties’ interests are firmly aligned though shared incentives. It motivates your energy solutions provider to actively seek out new market opportunities and new ways to extract additional value from the storage assets.

For example, Enel proactively collaborates with our partners to capitalize on new opportunities as market dynamics evolve and new demand response programs emerge, expanding the pool of value to its fullest potential. In doing so, we also shape these opportunities by collaborating with regulators to ensure market reliability, safeguarding long-term asset investments.

Opting for a developer financing option with an experienced and reputable energy solutions provider eliminates upfront costs and financial risks for your organization. Enel, for instance, wraps all project costs within our zero-CapEx financing mechanisms so that organizations do not have to put up any capital. Instead, Enel puts up the capital.

The benefit share rate (e.g., a 50:50 split) should remain stable throughout the agreement, though the actual benefits can fluctuate based on performance and market dynamics. In this model, you consistently receive your share of generated revenue without upfront costs, ensuring reliable, positive returns. For example:

1. If, at the onset of the agreement, you and your partner agree on a split of the expected savings, that ratio remains unchanged, regardless of the actual value derived. For instance, your partner’s initial projection might suggest that your system will bring your organization $5 million in cumulative benefits over 15 years, with a 50:50 split.
2. However, market dynamics or performance fluctuations could cause this figure to fluctuate, landing anywhere between $3 million and $6.5 million.
3. Nonetheless, you will consistently receive 50% of the revenue generated without any upfront expenditure in the benefit share model. Your financial position remains positive throughout the agreement, as you bear no risk in recovering your initial investment – this responsibility falls on your partner.

What kind of financing with a benefit share structure does Enel offer?

Enel North America offers three main financing mechanisms when evaluating the economics of solar and battery storage projects. However, only two of these mechanisms include a benefit share option.

1. Battery storage benefit share – an innovative financing model that allows your organization to enjoy the advantages of battery storage without significant capital investment. As the system helps you optimize energy usage, curb demand charges, and tap into demand response revenues, the savings and additional revenue generated are shared between you and Enel, typically in a predetermined split, like 50:50. This structure ensures that both your organization and Enel have a vested interest in maximizing the system’s benefits, aligning incentives for success.
2. Power Purchase Agreement (PPA) rate + battery storage benefit share – combines flexibility and cost-effectiveness. Your organization pays a fixed rate per kWh, like in a traditional PPA. Simultaneously, you share in the benefits and cost savings derived from energy optimization, demand management, and demand response programs. This hybrid approach offers energy cost predictability and value from energy flexibility and optimization.

Red flag: We’ve seen developer financing models where there is no benefit share arrangement – in which case, your organization would assume all risk. Be sure to request proposals from several energy partners and compare offerings.

For real-world examples demonstrating these three energy solutions financing mechanisms in action, refer to pages 15–17 in our guide, “How to build zero-cost on-site solar and storage projects.”

Work with a trusted provider to select energy solutions financing that optimizes your energy and sustainability strategies

The potential of solar and storage technologies to deliver extensive financial, sustainability, and resilience benefits is both promising and exciting. Leveraging investment tax credits provided by the Inflation Reduction Act makes these energy solutions more attractive. What’s even more exciting is that choosing the right financing can make on-site energy projects accessible without initial investment or additional financial risk for your organization, while also helping maximize your returns.

As one of the world’s largest renewable energy developers and innovators, Enel has the right expertise, experience, and suite of integrated energy solutions to help you maximize opportunity. We’ll help you take advantage of available incentives and tailor financing that opens the door to zero-CapEx energy projects that offer reliable, positive returns. Read our guide, “How to build zero-cost on-site solar and storage projects,” to learn more about how your organization can leverage financing and incentives to access energy solutions that cut energy costs, generate revenue, and meet decarbonization goals.