A separate source close to the company said in the long-term this strategy for domestic content could include battery cell manufacturing, which many agree is key to getting the domestic content incentives.
“Uncertainty surrounding the US election adds to the complexity, prompting close monitoring of developments,” Roy added.
Cell manufacturing in the US also benefits from a US$35 per kWh subsidy under the Act’s 45X Advanced Manufacturing Tax Credit, one of the most lucractive aspects of the Inflation Reduction Act.
Most sources also agree that the requirements to qualify for 45X are clearer than for the ITC adder, and as such should be the focus for those looking to leverage the Act’s domestic content incentives, consultancy Clean Energy Associates recently said.
The other aspect of obtaining the 10% domestic content ITC adder is localising BESS assembly to the US. E-Storage’s BESS product is its proprietary Solbank DC block platform, which it is now using on all projects, having previously integrated third-party DC blocks.
The company has already announced numerous firm plans to localise PV technology manufacturing (as covered by our sister site PV Tech) but none for energy storage. Currently Solbank is manufactured from two of its factories in China, in Suzhou and Dafeng.
“Our company history reflects a strategy of globalising manufacturing to leverage local production incentives or mitigate foreign production disincentives. We are currently considering the possibility of manufacturing for BESS outside of China,” Roy said.
Transition to proprietary BESS and deployments
As mentioned, the company transitioned from using third-party DC blocks to using its own product, the 2.5MW/5MWh Solbank DC block for which it manufactures everything except the battery cells. This was the reason for a flat 2023 in terms of year-on-year BESS deployments, of 1.8-2GWh.
That figure will soar to 7GWh in 2024 with the majority of shipments going to the US market, the largest in the world along with China. The company also has a ‘strong delivery backlog’ for the UK and smaller orders to other regions, including Australia.
E-Storage buys third-party power conversion systems (PCS) which it then integrates into full BESS projects with its own engineering, procurement and construction (EPC) service arm. It has deployed more than 3.4GWh (DC) of BESS to-date.
The majority of this has been for the developer-operator arm of Canadian Solar, Recurrent Energy, including the high-profile Crimson and Slate projects in California and Arizona.
Positioning in ‘intensely competitive’ DC block BESS market
Roy claimed that E-Storage’s strong manufacturing backbone and EPC expertise via Canadian Solar can set it apart in the BESS DC block market which has become intensely competitive in the last few years as more China-based companies look to gain global market share.
“Many DC block manufacturers lack EPC integration capabilities. Other system integrators lack deep manufacturing involvement. E-Storage combines both aspects for a unique offering,” Roy said.
He continued: “Despite the intense competition, customers recognise the value of an integrated approach offered by E-Storage and value our ability to deliver global projects.”
Canadian Solar was founded in Canada by Shawn Qu but its leadership team is now mainly based in China along with its manufacturing base, while the E-Storage team is primarily Canada and US-based.