Intermoney | Solaria (Buy, PO £13) announced yesterday after the market closed that it has agreed to purchase batteries with a total energy capacity of 1,102 MWh, involving an investment of around £80 million. The company reports that installation will begin progressively from December. The equipment will be operated automatically using AI-based energy management software.
Assessment: According to data provided by Solaria, the investment in batteries represents a ratio of approximately €73,000 per MWh of energy, to which approximately €10,000 in installation investments should be added. The total, €83,000/MWh, is lower than the €90,000 we assumed in a recent report on Solaria, which implied a return on investment of 12% if the net price of electricity fed into the grid reached an average of €40/MWh, so, in principle, the news is positive. The gradual decline in battery costs is what has made this equipment profitable only recently.
The total energy of 1,102 MWh should be understood as that fed into the grid in one day, after being in operation for an average of four hours, so in terms of installed capacity, we would be talking about 1,102 / 4 = 276 MW, compared to the 150 MW that we currently forecast in our estimates for Solaria for the end of 2027. According to our estimates, once this capacity is commissioned, it could generate an annual EBITDA of around €11-12 million. Last year, Solaria generated a consolidated EBITDA of €202 million.
