New revenue for solar and battery investors

How P415 and local flexibility markets open new revenue streams for solar + battery investors in the UK

Introduction

The UK electricity market is evolving rapidly. With grid decarbonisation, local network constraints, and rising electrification from EVs and heat pumps, energy flexibility has become a valuable item. Two major developments – the Balancing and Settlement Code modification P415 and the growth of local flexibility markets – are reshaping how distributed energy resources, like solar and battery systems, generate income.

Understanding P415 – Opening the door to wholesale trading for distributed assets

Prior to the introduction of P415, trading in the wholesale market was limited to electricity generators and suppliers, while consumers were able to access wholesale market flexibility schemes solely through their supplier. This reduced market competition and entirely shut out consumers whose electricity suppliers did not offer flexibility schemes.

Modification P415 removes this barrier by adding a new class of market participant called a Virtual Trading Party (VTP). Under the new rules, a VTP enables aggregators, optimisers and other service providers to trade flexibility from distributed energy assets independent from a licenced supplier.

P415 optimises grid performance and improves system resilience by enabling more distributed assets to contribute to grid stability – and by doing so, it creates a business opportunity for smaller-scale, behind-the-meter asset owners. Companies owning or operating solar and battery systems can now partner with VTPs to capture value from imbalances and price volatility by buying (charging) when wholesale prices are low and selling (discharging) when prices spike, and. P415 transforms distributed flexibility into a tradable commodity.

Local flexibility markets – Turning grid constraints into business opportunities

Much like national flexibility markets, local flexibility markets address imbalances in regional distribution networks. Local flexibility markets allow distribution system operators (DSOs) to pay energy assets to adjust generation or demand at specific times to manage network constraints. Instead of reinforcing the grid, DSOs can pay distributed assets to increase consumption, reduce export, or discharge batteries at critical times. DSOs such as UK Power Networks, SP Energy Networks, and SSEN are running live tenders through platforms like Piclo Flex, Local Flex and Electron Connect. These new local markets create additional value for battery owners, solar developers, and community projects.

Stacking new revenue streams for solar + battery assets

Revenue stacking allows one system to deliver multiple services across different markets, boosting ROI. By combining multiple value streams, asset owners can maximise returns via

• Wholesale Arbitrage (P415-enabled)

• Balancing Services

• Local Flexibility (DSO Markets)

• Network Cost Avoidance

• Energy Self-Consumption & Carbon Reduction

Practical steps for businesses and developers

Designing and managing systems with flexibility in mind ensures market access and financial optimisation, but as with any new market, risk is inherent and adjustments are inevitable. Businesses and developers should focus on these points to maximise returns on energy assets:

Preparation and management

• Understand your grid context

• Choose the right aggregation partner

• Design for flexibility from the start

• Monitor and optimise continuously

Challenges to navigate

• Settlement and baselining complexity

• Different DSO market rules

• Battery degradation and lifecycle costs

• Aggregator transparency and contract clarity

The bigger picture – decentralisation and market reform

P415 and local flexibility markets are transforming distributed energy economics and are part of a larger shift toward decentralised, data-driven energy systems. The UK is moving toward local energy optimisation, where consumers become active participants by selling flexibility and generating clean power. For businesses investing in solar and battery systems, these reforms offer a new way to generate recurring revenue while supporting decarbonisation.

ep Pixii helps businesses capture opportunities

Navigating the flexibility landscape involves technical, regulatory, and market challenges, but with the right partner, investors can unlock multiple value streams. ep Pixii, alongside our partner GridBeyond, provides comprehensive support to help clients simplify complexity,

optimise systems, and maximise the financial potential of the UK’s new era of flexibility.

Our capabilities

• Equipment Selection and System Sizing

  Tailored design using modelling tools for optimal performance

• Flexibility Market Readiness

  Ensuring systems meet participation and compliance requirements

• Revenue Stream Access and Partnering

  Connecting clients with leading aggregators and DSO tenders

• Ongoing Optimisation and Support

  Smart energy management for continuous performance tracking and market response.

Story by ep group