Key considerations for co-located battery storage

The rapid expansion of renewable energy and the difficulty of bringing new firm generation online fast enough to meet new load has heightened the need for Battery Energy Storage Systems (BESS) to optimize energy use and improve grid reliability. Yet, implementation of BESS sited at the load and behind-the-meter is far from plug-and-play. While it offers businesses flexibility in energy management, it also requires strategic planning to address regulatory, safety and operational challenges.

This article explores key considerations for integrating BESS into existing energy strategies, covering permitting, safety, maintenance planning and long-term viability — key pillars that define the difference between a successful project and one mired in costly delays. 

The value proposition for co-located battery energy storage

BESS is no longer a future investment, but an essential component of modern renewable energy strategies. Effective deployment ensures solar projects provide consistent, dispatchable power, reducing curtailment and enhancing long-term project economics. From shaving peak demand to supporting grid services, storage makes intermittent power predictable and profitable.

Beyond on-site optimization, BESS opens the door to revenue streams through participation in programs like demand response. Developers can tap into capacity markets, ancillary services and grid incentives that reward flexibility and reliability — turning storage into a multi-value asset.

BESS is also emerging as a critical tool in grid stabilization, particularly as intermittent renewables grow. By providing ancillary services and peak shaving, storage solutions improve the overall efficiency and reliability of solar-heavy grids. Distributed storage also helps alleviate congestion, reduce curtailment and provide firm capacity closer to load centers.

Key challenges and considerations for on-site BESS implementation

While the benefits of BESS are clear — from boosting solar project economics to enhancing grid resilience — realizing those benefits requires thoughtful execution. Storage projects, particularly those co-located with solar, come with a host of challenges that can impact performance, timeline and long-term value. To maximize ROI and ensure smooth deployment, developers must navigate a range of technical, regulatory and operational considerations from Day 1.

1. Permitting and regulatory compliance

Navigating local, state and federal regulations
BESS varies significantly across jurisdictions, requiring early coordination with utilities, fire marshals and local authorities. In some regions, evolving storage policies are streamlining approvals, allowing permitting of small systems in a few months, but in others, regulatory uncertainty and long permitting timelines remain a major hurdle. Even in areas where the regulatory process is clear, utility-scale BESS projects can take two to four years to get through the required approvals. Developers should work closely with legal, engineering and regulatory teams from the outset to anticipate local nuances and avoid costly delays.

Community and stakeholder engagement
Beyond permitting offices, winning community support is increasingly critical — especially for front-of-the-meter or utility-scale deployments. BESS moratoriums and outright bans are becoming more common in some areas, mainly due to concerns over fire risk. Education and communication are keys to  contextualizing the facts around BESS fire risk, health, safety and economic benefits; and to counter pervasive misinformation that exists mainly on the internet and social media platforms. Proactive stakeholder engagement helps garner approval from neighbors, residents and local businesses and can prevent opposition that threatens project timelines.

Zoning and land use considerations
Businesses must ensure that their site meets local zoning laws and land use requirements for energy storage installations. Setbacks, fire access roads and equipment height restrictions can all impact design and location. Early coordination with local planning departments can help avoid project redesigns down the line.

Interconnection with the grid
Securing approvals from utilities for grid integration can be costly, complex and time-consuming. According to a September 2024 report from ACORE, the average wait time for interconnection of solar, wind and energy storage projects in the traditional NYISO queue is 6.53 years. For the five projects that became operational in 2024 from this queue, the average time from initial interconnection request to operational was 7.4 years. Developers should prepare for studies on system impact and facility upgrades, while also building in buffer time for utility review cycles.

In addition, developers typically incur significant financial exposure before receiving interconnection approvals — in the millions of dollars for utility-scale projects. In congested interconnection queues, location flexibility and early planning can offer a competitive edge. For utility-scale projects, the typical timeline to complete all required studies is now approximately three to four years, though this can vary widely across the Regional Transmission Operators (RTOs). Behind-the-meter applications are typically much faster, with study times measured in months.

2. Safety and risk mitigation

Thermal management and fire safety
BESS fire safety and thermal management are an absolute critical area of any successful BESS installation: proper design and planning can mitigate most of the fire risks associated with BESS. BESS installations must incorporate advanced cooling systems to mitigate overheating risks.

Technologies like liquid cooling, off-gas detection and containerized systems are now standard in many markets, offering built-in safeguards for both personnel and assets.  The American Clean Power Association (ACP), one of America’s leading industry groups on BESS and clean energy, recently released guidance on Energy Storage and Safety that is an extremely helpful resource in this regard.

Compliance with safety standards
Businesses must adhere to industry standards to ensure safe operations. Leading guidance includes NFPA 855 (Standard for the Installation of Stationary Energy Storage Systems), UL 9540 and UL 9540A testing protocols. These standards inform best practices for system layout, spacing and fire detection and are now common permitting requirements in many jurisdictions.

Emergency response planning
Developing safety protocols and coordinating with local fire departments can help minimize risks in case of malfunctions or extreme weather events. The American Clean Power Association (ACP) has introduced a new Firefighter Checklist for BESS Thermal Incidents, which can serve as a valuable resource for emergency responders and developers alike.

3. Maintenance planning and long-term performance

Predictive maintenance and real-time monitoring
Predictive maintenance and AI-powered monitoring are no longer ‘nice-to-haves’ — they are table stakes for ensuring uptime and optimizing battery lifecycles. Digitized asset management platforms now allow developers to anticipate degradation patterns and proactively schedule augmentations, extending project value.

Lifecycle considerations
Battery degradation over time requires a strategic approach to augmentation planning, ensuring system longevity and performance optimization. Rather than waiting for issues to arise, forward-looking operators are implementing five- to 10-year augmentation roadmaps to maintain capacity and avoid sudden performance drops.

Supply chain and spare parts management
Ensuring the availability of replacement components and trained personnel is key to maintaining operational efficiency. This includes building partnerships with OEMs, sourcing domestic suppliers when possible and investing in technician training to enable quicker field response.

Future-proofing BESS investments

As the storage landscape continues to evolve, designing BESS projects with the future in mind is just as important as addressing today’s challenges. Forward-looking strategies can help developers and asset owners maximize returns, extend system life and remain competitive in a rapidly shifting energy environment.

One key consideration is scalability. Businesses should design their BESS systems with flexibility in mind, allowing for future expansion as energy needs evolve. Modular designs and containerized systems can streamline future upgrades without requiring major infrastructure overhauls. At the same time, it’s important to keep a close eye on advancements in battery chemistry. Emerging technologies, such as solid-state batteries and long-duration storage solutions, could improve efficiency and reduce operational costs. While lithium-ion remains the market leader, the next generation of battery technologies promises to unlock new performance capabilities and enable broader applications.

Finally, integration with other technologies is becoming a hallmark of successful BESS projects. Pairing BESS with demand response programs, microgrids and smart energy management systems can enhance its overall value. These integrations help operators extract multiple value streams from a single asset while improving flexibility, resilience and control over energy use.

By planning for growth, staying ahead of technology trends and building systems that complement broader energy strategies, developers can ensure that their BESS investments continue to deliver value well into the future.