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ARTICLE · 22 OCTOBER 2025

The New Frontier: Financing Storage-Only And Co-Located Projects

Foley & Lardner LLP
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Battery storage is quickly becoming a major player in the clean energy transition. There are two main project types: storage-only projects and co-located projects.

United StatesEnergy and Natural Resources
Cameron Saneii
Cameron Saneii
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Battery storage is quickly becoming a major player in the clean energy transition. There are two main project types: storage-only projects and co-located projects. Storage-only projects are stand-alone battery systems that store electricity from the grid when it's cheap or abundant, then deliver it during times of high demand. Co-located projects combine a renewable energy source with batteries at the same site, allowing them to store extra power and sell it later at better prices.

Both models face regulatory hurdles. In many areas, rules for how storage participates in electricity markets are still evolving. For example, FERC's Order No. 841 requires grid operators to let storage access wholesale markets, but implementation details vary by region1. Co-located projects may qualify for ITC credits under the Inflation Reduction Act, but developers must meet specific requirements to receive these benefits2. Because of this regulatory complexity, lenders often

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