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Once a BESS is built, commissioned, and prequalified, it represents a significant long-term investment. Given the high cost of components and the natural tendency of batteries to degrade over time, Battery Warranties are essential for protecting that investment.

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The EPC’s Performance Guarantee

While individual components (inverters, battery modules) have their own defect warranties, the crucial element for asset owners is the overall warranty provided by the EPC contractor. This warranty guarantees a specific level of performance for the entire BESS site over the course of its operational life. EPC contractors typically guarantee:
  • Expected power capacity (MW): The maximum electrical power the BESS can deliver or absorb. This capacity is usually fixed for the warranty period.
  • Expected energy capacity (MWh): The total amount of electrical energy the battery can hold. This will gradually degrade as the asset is used over time — much like how a phone battery holds less charge after many recharges.
The EPC provides a clear projection of both power capacity and energy capacity for each year of the asset’s operation. This yearly projection is essential for forecasting expected financial returns and managing the long-term finances of the site.

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Liquidated Damages

If the BESS fails to meet its guaranteed performance parameters for a given year, the EPC contractor can be held liable through liquidated damages — pre-agreed financial penalties that represent the lost revenue opportunities resulting from underperformance.

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Operating Conditions: The Fine Print

To protect themselves from unfair claims, EPC contractors and battery manufacturers specify fair operating conditions that asset owners and operators must adhere to. Exceeding these limits can accelerate degradation and void the warranty. These conditions typically include:
  • Annual cycling budgets: A limit on the total number of full charge/discharge cycles allowed per year. Exceeding this can accelerate degradation.
  • Daily maximum cycle limits: No more than a specified number of full cycles within a 24-hour period.
  • Rolling C-rate or P-rate limits: Controls on how aggressively the battery is charged or discharged:
    • C-rate (Charge/Discharge Rate): A measure of how fast a battery is charged or discharged relative to its total capacity. A 1C rate means the battery can be fully charged or discharged in one hour; a 0.5C rate takes two hours. Higher C-rates mean faster energy transfer and more stress on the battery.
    • P-rate (Power Rate): Similar to C-rate, but specifically referring to instantaneous power (MW) being delivered or absorbed.
    • These are often defined as rolling averages (e.g. no more than a specified C-rate over any 6-hour period) to ensure continuous safe operation.
As an asset operator, it is critical to ensure that operational schedules always fall within warranty constraints. Advanced software can optimise revenue while meticulously respecting these limits — ensuring that if an asset underperforms despite best efforts, the warranty protection applies and the EPC contractor is liable for liquidated damages.
This protection is a cornerstone of de-risking the long-term investment in BESS.
Last modified on April 20, 2026