SolarBank (OTC: SUUNF) Secures Win: $36 Million In EPC Contracts Awarded For Ontario's Battery Energy Storage Projects

Disseminated on behalf of SolarBank Corporation.

In July, SolarBank Corporation SUUNF SUNN GY (“SolarBank”) achieved a key milestone by securing approval from the Ontario Independent Electricity System Operator (IESO) for the implementation of three battery storage projects and subsequently secured an engineering, procurement and construction (EPC) contract for their construction.

This significant development marks SolarBank's entry into the battery energy storage industry in Ontario. SolarBank collaborated with the owners of these projects to successfully secure the contract through the IESO's Expedited Long-Term 1 (E-LT1) Reliability Procurement process.

The company, headquartered in Toronto, just announced its latest milestone related to these projects in the form of three EPC contracts for their construction. These contracts, which were finalized on October 3, 2023, involve the engineering, procurement and construction of three separate battery energy storage system (BESS) projects. The total value of these contracts is $36 million – representing a major win for the company.

The projects are collectively owned by Solar Flow-Through Funds, two First Nations communities and a third-party developer based in Ontario, emphasizing the diverse and influential nature of the collaborations. This development follows other positive news from SolarBank as the company continues to secure partnerships and contracts.

The company operates in a growing market – the battery energy storage market is predicted to continue to grow by double-digits, with a compound annual growth rate of 16.3% from 2022 to 2029. This growth is expected to result in an estimated market value of US$31.2 billion by 2029, according to Fortune Business Insights.

Notably, these BESS projects will provide reliability benefits to existing electricity grids through transmission and distribution connections. The systems will strategically discharge stored energy during periods of high demand and consequently high prices while recharging during times when demand and prices are low. The grid operators and utilities compensate for these grid-enhancing services through capacity payments.

The projects were selected as part of the "E-LT1" procurement process with the Ontario IESO. It is expected that all E-LT1 projects will be operational no later than April 30, 2026. However, SolarBank is committed to completing the projects by the summer of 2025. Each project will operate under a long-term contract with the IESO, ensuring guaranteed capacity payments as long as all contractual obligations are met. 

This news in Ontario comes after the news that Honeywell International HON has announced its acquisition of three proposed 21 MW DC ground-mount solar power projects in upstate New York from SolarBank and entered into an EPC contract for their construction, with a combined transaction value of US$41 million. The projects will be developed as three individual 7 MW DC solar power projects, known as SB-1, SB-2, and SB-3. The completed projects will then sell credits to subscribers under the community solar model, meaning that clean energy from the site feeds into the local power grid, and dozens or even hundreds of renters and homeowners can save money through subscriptions as they access the benefits of solar without installing panels on their homes.

SolarBank will continue to build the projects for Honeywell to commercial operation via an engineering procurement and construction agreement, with SolarBank acting as EPC Contractor. Once operational, the projects will be eligible to participate in the New York State Energy Research and Development Authority (NYSERDA) NY-Sun Program to receive incentives from the state. Additionally, SolarBank expects to retain an operations and maintenance contract for the projects following construction.

Over the past decade, the solar market in the United States has witnessed remarkable growth, experiencing an annual increase of 42%. This upward trajectory shows no signs of slowing down, as projections indicate an anticipated 41% surge within the current year. According to Bloomberg Intelligence, solar energy is expected to emerge as the fastest-growing sub-segment within the energy sector by 2023. SolarBank's relentless pursuit of innovation and dedication to advancing solar power is evident through its consistent success in securing deals. These ongoing developments represent significant milestones that will significantly contribute to the proliferation of community solar initiatives and propel us closer to a more sustainable future.

Unless otherwise specified, all dollar amounts in this article are in Canadian dollars. This article contains forward-looking information. Please refer to https://solarbankcorp.com/disclaimer/ for the assumptions and risks associated with such forward-looking information.

Featured photo by Manny Becerra on Unsplash.

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