Leasing as a financing option for energy storage: 5 questions to Bas Quick of Activum Green Lease

As part of "Storage Financing Month," a campaign series to draw more attention to energy storage financing, we spoke with Bas Quick, Partner at Activum Green Lease. Energy storage is playing an increasing role in the energy transition, but financing remains a challenge for many entrepreneurs. Leasing can offer an interesting solution in this regard. We asked Bas five questions about the opportunities, benefits and developments surrounding leasing in the energy storage sector.

What exactly does Activum Green Lease do?

Activum Green Lease (www.groen-lease.nl) is the leasing company specialized in sustainability for SMEs in the Netherlands. We support installers, EPC'ers and sustainability advisors by offering a financial lease solution with the SME customer quote. In addition to batteries, we also finance solar panels, infrared panels and LED lighting. Recently we are also active in financing mobile batteries in combination with electric construction equipment, think of electric shovels, excavators etc. We are bank-independent and offer financial leases on favorable terms.

What exactly does leasing entail and what are its advantages and disadvantages?

We offer financial leases, this is the simplest and most transparent form of financing. The starting point is a financing of 100% (incl. installation costs) for up to 10 years. The customer is economic owner of the battery and can thus take advantage of tax schemes and/or subsidies. There is a calculator on the website that allows an instant calculation of a monthly price with the desired term. By leasing from Activum Green Lease, the client maintains its borrowing capacity with its house bank and keeps cash flow free for other (core) investments in the company.

What opportunities does leasing present for the energy storage sector and what developments do you see? 

The sector is relatively new and is in a dynamic environment. The potential is enormous and demand is high. Many entrepreneurs run into grid congestion problems, others see opportunities to optimize (existing) generation from PV, for example, and avoid adverse effects of curtailment. The investment in a battery is then often inconvenient or does not fit the budget. Leasing lowers the threshold for a sustainable investment, with the monthly energy savings achieved exceeding the financing costs. The entrepreneur saves from day 1, without cash-out. Doing nothing = more expensive.

For which parties or storage projects is leasing interesting (and for which parties not?)

Leasing is object financing and is especially suitable for storage projects between 50 kWh and about 2 MWh. For larger projects, financing quickly becomes more complex and shifts to project financing, which comes with more legal and banking challenges. In contrast, leasing is simple, quick to close and requires little administrative hassle.

SMEs - especially in the agricultural and industrial sectors - can particularly benefit from leasing, as house banks are increasingly withdrawing from this segment. As a result, entrepreneurs run into financing problems and often cannot contact an account manager, if there is one at all. When battery suppliers offer a financing solution directly with the quotation, it lowers the threshold for the customer and increases the chances that a quotation will actually be converted into an order.

What does the process to arrive at a leasing arrangement look like and under what conditions can you qualify?

The leasing process begins with the battery system supplier, who uses the Green Lease Calculator to calculate a monthly price based on the investment cost and chosen term. Offering financing directly in monthly amounts makes it easier for business owners to make a decision. Since they are used to thinking in monthly costs (such as salary, mortgage, energy and insurance), a clear monthly amount in the offer helps them make a considered choice.

When the customer agrees to the offer, the credit application process begins. In about 80% of the cases, we can issue a positive credit decision within one business day. Once the financing is approved, the battery can be delivered and invoiced. We then prepare the lease documentation, which is presented digitally to the customer for signature. Once signed, the supplier is paid.

An important condition is that all batteries meet PGS37-1 standards and that there is customer's own use.