The pace of change in the power industry continues to accelerate. Though many renewable energy sectors faced setbacks under the One Big Beautiful Bill Act, battery energy storage systems emerged largely intact.
With the full value of energy storage tax credits extended to 2033, many owners and developers of battery energy storage systems (BESS) will continue to face critical decisions early in the project cycle. It’s another trend that continues to accelerate.
In this environment, equipment and component manufacturers are focused squarely on delivering increasingly advanced technology embedded within a whole host of products. This leaves engineer-procure-construct (EPC) contractors on the front lines with responsibility for translating technical and regulatory complexity into constructable, code-compliant solutions. Here are 10 insights for effective project delivery in today’s ever-evolving battery energy storage environment.
1. Engage early with the AHJ.
The pace of adoptions of codes and standards can vary by jurisdiction, and authorities having jurisdiction (AHJ) over enforcement of fire, electrical and building codes may have requirements that deviate from national codes. Working with these local officials proactively to understand their expectations for applicable codes will provide clear guidance that will help to smoothly navigate the permitting and inspection process.
2. Fire test data matters.
Real-world large-scale fire test (LSFT) data produced in accordance with UL 9540A, CSA-800, and other published testing protocols for evaluating BESS failures at scale will inform more than just compliance. It will drive site design, hazard mitigation approaches and emergency response plans. This data is at the heart of risk mitigation for the project and it will be relied upon by the AHJ to evaluate design decisions. Without this data and associated hazard analyses to fall back on, an AHJ could impose excessive spacing, ineffective suppression systems, or other requirements that would impact cost and schedule.
3. Codes and standards are moving targets.
City or county websites should not be viewed as the single source of truth because they may have outdated information pertaining to codes and standards. Instead, align the design with industry-recommended practices such as those provided by NFPA 855. Keep in mind that these too are rapidly evolving, so staying plugged into the code development process is critical for future projects.
4. Thoroughly and thoughtfully levelize bids.
It has become common for some bidders to reduce initial project costs by complying with bare minimum requirements of outdated local codes. However, these initial cost savings could quickly be offset by change orders and project delays if requirements evolve. Reputable OEMs and EPC contractors with experienced engineers can help projects avoid inadequate or unsafe designs and provide more certain project outcomes.
5. UL 9540 isn't optional.
Original equipment manufacturers (OEMs) must perform reliability evaluations and conduct a variety of safety tests to get a product listed to UL 9540. These evaluations are essential aspects of due diligence and owners should require this documentation as part of any battery supply agreement. Forthcoming updates to NFPA 855 may include a retroactive trigger, subjecting legacy projects to UL 9540 requirements and evaluations. If a facility is deemed to be out of compliance by the local AHJ, substantial retrofit costs could be incurred.
6. Clarify Your Use Case
With many different technology options available, a clear understanding of the operational goals, risk tolerance and site conditions is imperative. What are the operational constraints or safety requirements? Will there be a defined goal for returns on investment? Are there any high-risk exposures or sensitive receptors nearby? How will the facility be operated and maintained? The answers to these and other questions will drive selection of core technologies. There are many nuances to each technology choice as well as how they scale. Understanding the long-term demands and expected performance of the BESS facility is a critical step.
7. Start permitting with design.
Coordinating permitting and engineering is a prudent step to avoid rework, change orders and schedule delays. Many documents needed for permitting applications require engineering input and constructability considerations. Facility design must be sufficiently progressed to avoid snags in permit applications.
8. Don’t assume your next project will be the same as your last.
BESS projects are unlike traditional power projects. Not only can local requirements from the AHJ significantly impact the project, other site-specific inputs like topography, geotechnical parameters, utility interconnection requirements and local community considerations may come into play. The industry is also moving at such a rapid pace that very few projects are built the same. While it feels like the industry standards are getting closer in how these projects will be built, the future is not certain, especially as more projects are built outside of optimal site locations.
9. Know your safety-critical components.
Many OEMs are convinced they have the secret sauce with superior products that are safer and more efficient than their competitors. These design details are considered proprietary and closely held with little transparency. This can make it a challenge to execute designs in such a way that can be scaled up to large BESS facilities. This transparency issue will be a focus in the 2026 edition of NFPA 855, but until then the owner and EPC contractor will need to keep the pressure on OEMs to share the wiring diagrams and component-level data needed to integrate systems at the site level.
10. Integrate early with EPC contractor.
It's important to define which BESS technology you plan on using, before issuing an EPC contract. Reputable EPC contractors have experience with a wide variety of technologies and integration approaches that can help owners make the right choices to meet demands of a particular project. A track record of both good and bad experiences can benefit owners, allowing them to learn from lessons of others in this relatively new and rapidly changing industry. It’s also important to understand what a truly integrated EPC partner brings to a project versus those that subcontract out critical pieces of the project (like engineering). With so many moving parts and pieces, the true benefit of EPC is in the integration of all disciplines and by your side when communicating with AHJs.
Key to Success
As BESS technology evolves, the outlook is bright for the overall market. Despite recent rollbacks affecting many renewable categories, energy storage, along with geothermal, nuclear and hydro are not facing the same obstacles. Those sources retain full tax credit eligibility for construction projects until year-end 2033, before facing gradual rollbacks of 75% in 2034, 50% in 2035 and 0% thereafter.
Though some headwinds still are possible — given China’s dominance of the lithium market as well as potential future trade uncertainty — developers, IPPs and utilities can expect continued efficiency and optimal performance from their next project.
Paying attention to the 10 key fundamentals of effective project execution is a recipe for success.
As space for more utility-scale battery energy storage facilities becomes constrained, some developers are thinking about going vertical with their next project.
