The story everyone tells about energy is about generation. Solar panels, wind turbines, the clean energy race. And that story is true. Wind and solar just overtook fossil fuels in Europe for the first time — 30 percent versus 29 percent. That’s a real milestone.
But the story I want to tell is about what comes after the generation war is won. Because that war is over. The hardware is cheap. The physics works. We have more clean electricity than we know what to do with.
The question now — the only question that matters — is whether we can coordinate it.
The data is stunning
Ember’s European Electricity Review for 2026 tells a remarkable story. Solar alone hit 369 terawatt-hours in 2025, growing over 20 percent year on year for the fourth straight year. It’s now 13 percent of EU electricity, higher than coal, higher than hydro. Meanwhile, Bloomberg NEF reported stationary storage LFP packs hitting $70 per kilowatt-hour — down 45 percent in a single year and 93 percent cheaper than 2010.
Generation is abundant. Storage hardware is cheap. The “hard to do” is done.
But here’s what the same Ember report also shows: gas generation in the EU rose 8 percent in 2025. Despite having more wind and solar than ever. Gas rose because hydro dropped 12 percent due to weather. That pushed the EU power sector’s gas import bill to €32 billion. Sixteen percent higher than the year before.
Let that sink in. Europe has more clean energy than at any point in history. And it’s still spending €32 billion importing gas to keep the lights on.
Germany curtailed 9.6 terawatt-hours of wind and solar in 2025 — nearly 4 percent of total output, clean energy generated and then thrown away. Solar curtailment alone rose 97 percent year on year. Spain hit 11 percent curtailment by mid-2025. Sweden recorded 649 negative-price hours in twelve months.
This is the paradox of abundance. The cheaper energy gets, the more valuable the coordination layer becomes.
Jevons was right (again)
William Stanley Jevons observed in 1865 that Watt’s more efficient steam engine didn’t reduce coal consumption — it increased it. Efficiency made coal cheaper, which made it more useful, which drove more demand.
The same thing is happening with energy. Since 1990, energy efficiency has increased 36 percent globally. Total consumption has increased 63 percent. LEDs are more efficient, so we installed more lights. AI chips are more efficient per computation, so we built more data centers. In Ireland, data centers went from 5 to 21 percent of national electricity consumption.
For renewables, the dynamic has a twist. Solar and wind produce energy when the physics allows it, not when the grid needs it. Abundance without coordination doesn’t just mean waste. It means you still need the gas plants on standby. You still pay the €32 billion import bill.
Ember calculated that if batteries had captured roughly one-third of Germany’s curtailed energy, it would have saved €800 million — €613 million in avoided redispatch costs, €219 million in avoided gas generation. The required battery investment? Just €145 million per year over the technology’s lifetime.
And then the Iberian blackout drove the point home. April 28, 2025: 31 gigawatts disconnected, 47 to 56 million people in the dark, over €1.6 billion in losses. Spain had just 25 to 60 megawatts of installed battery storage against a 500 megawatt target.
Batteries in buildings
The EU installed 27.1 gigawatt-hours of new battery storage in 2025 — a 45 percent increase. But look at the breakdown: utility-scale was 55 percent, residential was 36 percent, and commercial & industrial was just 8 percent.
Eight percent. Despite being the fastest-growing segment with a projected 71 percent CAGR to €4.1 billion by 2028.
The residential market has clear winners — 1Komma5 in Germany with over 300,000 systems, Sonnen with their virtual power plant. Utility-scale is scaling fast. But the middle? The 50 kW to 2 MW behind-the-meter commercial segment? It’s wide open.
In the entire Nordic region, there is no single company that combines zero-cost deployment, hardware-agnostic system design, automated multi-market optimization, and end-to-end site coordination for commercial batteries.
Not Pixii (sells hardware, doesn’t finance it). Not CheckWatt (aggregates, doesn’t deploy). Not ABB (battery-as-a-service, but only UK). Not 1Komma5 (residential, no concrete commercial product).
This is the biggest gap in European energy infrastructure.
Financial architecture always comes second — and matters more
There’s a pattern that repeats in every major infrastructure buildout. The technology creates the asset. Then a financial innovation creates the market that enables scaling.
Oil. Drake drilled the first well in 1859. For 124 years, oil traded through opaque bilateral contracts. Then in 1983, NYMEX launched crude oil futures. Today they trade over a million contracts daily. But the critical point: futures enabled hedging, hedging enabled reserve-based lending, and lending enabled thousands of independent drillers to develop distributed assets. Without futures, there is no shale revolution.
Railroads. The US built 190,000 miles of track requiring $10 billion in capital when all US manufacturing assets totaled $6.5 billion. The financial innovation was the first mortgage bond — long-term, convertible, secured by company property. Railroad bonds didn’t just finance railroads. They created the American corporate bond market.
Telecom. Between 1996 and 2001, $500 billion went into fiber optic cable. When the bubble burst, only 5 percent of the fiber was lit. But the infrastructure survived. Google, Facebook, AWS, and Netflix scaled on overcapacity fiber that bankrupt investors had paid for.
Bitcoin. Eight years of pure technology: $16 billion market cap. Then CME futures, Coinbase Custody, the first futures ETF, and spot ETFs. Result: $2.5 trillion. Technology alone — $16 billion. Technology plus financial instruments — 156x.
SolarCity. Their insight wasn’t about panels. By 2010, panels were commodity. The insight was that the bottleneck was financial and operational. Zero dollars down, twenty-year leases. In November 2013, the first solar asset-backed security: $54.4 million, rated BBB+, 4.8 percent. That single deal birthed a $15 billion solar ABS market.
But SolarCity also shows exactly how the model breaks. Customer acquisition costs spiraled to $6,000 per customer through door-to-door sales. $3.58 billion in debt against $730 million in revenue. Tesla acquired them in what was essentially a rescue.
The lesson: the technology was table stakes, the financing was transformative, but the customer economics killed it.
Battery storage for commercial buildings is at exactly this inflection point. The technology is proven. The economics are compelling. No standalone battery ABS has ever been issued. The “SolarCity moment” for batteries belongs to whoever creates the first standardized instrument backed by diversified battery revenue streams.
Why Sweden, why now
Something most people don’t know about Swedish commercial buildings: a typical property uses 20 to 35 percent of its grid connection on average. The remaining 65 to 80 percent is capacity the owner pays for every month and never uses.
Swedish grid fees rose 10.6 percent in 2025 — the largest increase in 30 years. For a commercial property with 500 kW peak demand, demand charges alone run roughly 385,000 SEK per year. The regulator’s revenue cap for 2024-2027 increased roughly 40 percent. Grid companies still have 30 billion SEK in unused revenue headroom. Sweden expects to double electricity consumption by 2045.
The recent pause on residential capacity tariff rollout doesn’t change this. Commercial demand charges above 63 amps remain fully in effect, the EU Electricity Market Directive still requires capacity-based pricing, and operators who already implemented effekttariffer can keep them.
And here’s the thing that changes the conversation with property owners: Swedish commercial property valuation follows one formula. Value equals net operating income divided by yield. At Stockholm prime yields of 3.85 to 4 percent, a 500,000 SEK annual energy saving translates to roughly 12.5 million SEK in property value increase. That’s a 20 to 25x multiplier.
You don’t sell kilowatt-hours to a property owner. You sell property value creation.
Revenue stacking makes the math work
While the battery shaves peaks during the day, it participates in grid markets at night.
FCR-D has saturated — prices crashed from 30-60 EUR/MWh in 2022 to under €3 in February 2025. But mFRR is growing. Spot arbitrage in SE3 averages 20-50 EUR/MWh spread on normal days, spiking to 80-200 on volatile days. And aFRR opens when Sweden joins the PICASSO platform, expected 2026-2027.
For a 200 kW / 400 kWh system, the conservative annual revenue stack: peak shaving 50-70k SEK, frequency reserves 40-75k, spot arbitrage 25-50k, mFRR 5-15k. Total: 130-235k SEK against an installed cost of roughly 1.15 million. Simple payback of 6.5 to 9.5 years, improving as battery costs fall and new markets open.
No single revenue stream works alone anymore. FCR-D prices collapsed when capacity surged. Peak shaving alone won’t justify deployment cost. The stacking is the business case. And stacking requires edge-based optimization that dispatches across all markets simultaneously in real time — because when Svenska Kraftnät calls for frequency response, you have 7.5 seconds.
The moat is physical, not technical
The software isn’t the moat. If I told you our competitive advantage was our software, I’d be lying.
American Tower owns 224,000 cell towers. Market cap: $81 billion. EBITDA margin: 66-68 percent. Their technology? Commodity antennas. Their moat? Permitted physical sites with long-term leases, zoning approvals that take years, and co-location economics where adding tenants is nearly pure margin.
Tesla Superchargers — same pattern. 80,000 stalls, 52.5 percent of US DC fast-charging. The advantage wasn’t charging technology. It was vertical integration, density, and deployment speed.
The moat is that this business is hard to assemble, not hard to build. Battery hardware is commodity — LFP cells at $36-50/kWh from dozens of manufacturers. The scarce asset is the combination of: physical site access through 5-15 year contracts. Grid connection and market access. Operational data from hundreds of systems. Capital structures enabling zero-cost deployment.
Every signed contract locks a competitor out of that building for a decade. Every operating hour generates dispatch data that compounds. Institutional capital — EIB, NIB — requires 2-3 years of portfolio performance data before writing a term sheet. First movers with verified data get better rates. That gap widens every month.
Being honest about the risks
Revenue risk from market saturation is real. Sweden’s FCR-D market saturated within 18 months. China could flood Europe — Chinese turnkey systems cost $73/kWh versus $177 in Europe. ABB just launched battery-as-a-service in the UK, Volvo Energy is entering with containerized 1 MW systems. There is no Swedish government incentive for commercial batteries, unlike California’s 30-50 percent investment tax credit.
And the commercial customer is genuinely hard. Factory managers, logistics operators, property companies — each with different decision processes and risk tolerances.
But the multinationals have a structural disadvantage. They’re optimized for large, standardized deployments. The commercial segment is messy. It’s 200 kW systems in warehouses with weird electrical panels and grid connections that need custom work. The multinationals are good at selling equipment. They’re not built for the hands-and-knees deployment work.
The hard to get
There’s a distinction in business strategy between what’s hard to do and what’s hard to get.
Hard to do is technology. A better battery, better algorithms, a faster edge device. Those things are hard for everyone equally, and anyone with enough talent and capital can eventually do them.
Hard to get is different. Hard to get is the signed site agreement that took three months of conversations and a board approval. The grid connection permit after six weeks with the local operator. Three years of dispatch data from 200 sites. The institutional capital relationship built on verified performance, not pitch decks.
The energy transition has entered a new phase. The technology phase is over. We’re in the deployment phase. And deployment is about the hard-to-get things — site access, capital structures, operational data, grid relationships, physical installation at scale.
The grid is becoming a network of millions of distributed resources. Someone needs to coordinate them. Someone needs to do the physical, unglamorous work of putting batteries in buildings and making them earn.
That’s what we do.
Fredrik Ahlgren is CEO and co-founder of Sourceful Energy. Reach out at sourceful.energy or connect on LinkedIn.
