How does ZynexGroup's fixed payment model work?

When a company buys an industrial battery energy storage system (BESS) through us, one of the first questions is concrete: what do we get back, and how certain is it? The answer lies in our fixed payment model. The customer owns the physical system, and in return we pay a fixed monthly availability payment for the right to use the system's flexibility commercially for six years.

This article explains what the fixed availability payment is, how it is calculated, why it provides a predictable cash flow rather than market-dependent revenue, and equally important: what it is not. The model is the most central part of our commercial offer, which is why it needs to be described precisely and without overstatement.

What "fixed availability payment" means

A battery does not create value by simply sitting fully charged. Value arises when the system's power and capacity can be made available to the electricity market at the right times. In the Danish power system, consumption and production must be balanced in real time, and the transmission system operator, Energinet, procures a range of ancillary services from market participants to maintain that balance. A battery that can quickly absorb or deliver power is well suited to take part in those services.

The fixed availability payment is the payment the customer receives for making the system's flexibility available to us for the contract period. In return, we get the exclusive right to commercially control, optimise, and deploy the system. The payment is therefore compensation for availability: not interest, not an investment return, and not a bank-guaranteed payment. That distinction matters, and we return to it below.

Paying for availability is not something we invented. The balancing market itself is built on that principle. In capacity markets, market participants receive payment precisely for making their flexibility available, so the system operator can secure capacity in advance to handle imbalances. Our model translates that logic into one fixed, contractual payment to the customer, where we carry the market uncertainty instead of the customer.

The formula: calculation basis divided by 72

The fixed monthly availability payment is calculated in one simple way:

Monthly payment = Calculation basis / 72

As a starting point, the calculation basis corresponds to the customer's total purchase price for the system excluding VAT. The number 72 is the number of months in the six-year contract period. Two concrete examples, all excluding VAT:

• Two modules (522 kWh / 250 kW), calculation basis approximately 792,000 DKK: Monthly payment becomes 792,000 / 72 = 11,000 DKK per month.

• Three modules (783 kWh / 375 kW), calculation basis approximately 1,188,000 DKK: Monthly payment becomes 1,188,000 / 72 = 16,500 DKK per month.

If the agreement runs for the full period without suspension, reduction, or termination, the customer receives 72 monthly payments in total. That corresponds overall to 100% of the calculation basis excluding VAT. In other words, the fixed payments over six years are structured so they repay an amount equal to the original purchase price, provided the course of the agreement is uninterrupted.

Why we say "repayment," not "guaranteed return"

The arithmetic can be tempting to translate into a percentage. 100% of the calculation basis spread over six years corresponds mathematically to approximately 16.7% of the calculation basis per year. That figure is correct as a pure description of the repayment rate, but it is not an investment return, and we do not use it as one.

The difference is not only linguistic. A "return" suggests that you get more back than you put in, as interest on an investment. That is not what happens here. The customer pays for a physical system that the customer owns, and over 72 months receives fixed payments that together correspond to the calculation basis. The real value for the customer therefore sits in two places: in the predictable payments, and in ownership of an asset that still has technical value after the contract period. Neither is a guaranteed rate of return.

That is why we consistently use formulations such as "fixed contractual availability payment" and "repayment over 72 months if the agreement runs without suspension, reduction, or termination." We deliberately avoid words such as "guaranteed return," "risk-free investment," or "secure 16% return," because they would give the wrong picture of what the agreement is. The agreement is a commercial contract about availability, not a financial investment product.

Predictable cash flow rather than market-dependent revenue share

There are basically two ways to share the economics of a BESS project. One is a revenue share, where the customer receives a portion of the actual market revenues but also carries the uncertainty when revenues fluctuate. The other is a fixed payment, where the customer receives a predictable amount but, in return, does not share in the market revenues during the period. Our standard model is the fixed payment.

Market revenues can fluctuate considerably. Part of the value comes from reserve products such as aFRR (automatic frequency restoration reserve) and mFRR (manual frequency restoration reserve), which are traded in both capacity and energy activation markets. Another part can come from arbitrage, where a battery charges when electricity is cheap and discharges when it is expensive. That is possible because the price of electricity is set for each hour in the day-ahead market and can be adjusted closer to delivery in the intraday market. Green Power Denmark describes exactly this interplay of ancillary services and arbitrage as the commercial business model behind batteries.

In the standard model, it is we, not the customer, who operate in those markets and carry ordinary market risk. If market prices fall for a period, that does not change the customer's fixed payment. If they rise, we keep the net revenues beyond the payment to the customer. The customer therefore gets simple economics that is easy to budget for and easy to explain to a bank, an auditor, or a board. That model suits companies that want to own a physical asset but do not themselves want to understand or handle swings in the electricity market.

What the fixed payment does not guarantee

Predictability is not the same as an unconditional guarantee, and it is important to be clear about the exceptions. The fixed payment rests on the customer actually making the system available, and on the system being usable commercially. The payment can therefore be reduced, deferred, or suspended proportionally for the affected part and period in a number of cases:

• Force majeure: Extraordinary circumstances beyond the parties' reasonable control, for example a nationwide grid collapse, official orders, or cyberattacks on critical infrastructure, can affect the agreement under the specific terms.

• Customer-caused unavailability: If the system cannot be used because the customer intervenes in it, changes its electrical installation without notice, or does not provide the necessary access, the payment can be affected for that period.

• Missing insurance: Correct insurance cover is a precondition. If the customer requires that we do not operate the system because of missing or changed cover, the basis for payment falls away for that period.

• Physical damage without cover: Damage to the system that is not covered and is not caused by us can pause payment for the affected capacity until the system is restored.

• Termination and default: If the agreement is terminated, or a party defaults, payment follows the specific terms and no longer the full schedule over 72 months.

The decisive principle is that ordinary market fluctuations do not touch the customer's fixed payment, while the extraordinary or customer-caused circumstances above can do so, proportionally and under the agreement. Short-term unavailability, for example in connection with service or a technical fault, does not cause an entire month's payment to fall away. We do not describe the model as entirely without risk, because that would not be accurate. We describe it as a model where market risk sits with us, and where the remaining reservations are tied to concrete, bounded circumstances.

Why we can take on the market risk

It can look like a generous construction that we carry market risk and still commit to a fixed payment for the customer. The explanation is commercial and straightforward: our business rests on the expectation that we can optimise the system in the market to a total value that exceeds the fixed payment we have committed to the customer. Our earnings come from the net revenues from commercial optimisation and from delivering the system itself as a complete turnkey solution.

That presupposes market access, and that access is not unconditional. A system must, among other things, be technically prequalified with Energinet before it can participate in the ancillary services markets. We coordinate and establish that market access through our chosen BRP (balance responsible party) or trading partner within the agreement's technical and contractual framework. Demand for flexibility is expected to grow as more wind and solar enter the power system, but we build the model on an expectation, not on a promise of specific future market conditions. Green Power Denmark notes that flexibility must be remunerated to create incentive, and that companies can earn by making flexibility available to the market. That is the value we work to capture, and it is what makes it possible to offer the customer a fixed payment instead of a fluctuating share.

ZynexGroup's approach to system assessment

We take as our starting point that the payment model only makes sense if the system is correctly sized for the individual facility. That is why we look at the company's grid connection, consumption profile, and the technical conditions on site before we talk numbers. The calculation basis follows the total project price, and the fixed availability payment follows directly from the calculation basis divided by 72.

We offer an actual 6-year payback guarantee on BESS systems. It should be understood as what it is: a contractual model where the fixed payments over 72 months correspond to the calculation basis if the agreement runs without suspension, reduction, or termination. The customer's security lies first and foremost in owning the physical system, not in a bank guarantee. Software logic, algorithms, trading strategies, and optimisation models are not transferred to the customer, but remain with us and our partners.

Overall perspective

ZynexGroup's fixed payment model is a commercial agreement in which the customer buys and owns an industrial BESS system and receives a fixed monthly availability payment calculated as the calculation basis divided by 72. With an uninterrupted course, the total payments over six years correspond to 100% of the calculation basis excluding VAT. The model gives the customer a predictable cash flow instead of a market-dependent revenue share, while we carry ordinary market risk and optimise the system in the Danish reserve and balancing markets.

It is deliberate that we call it a fixed contractual payment and not a guaranteed return. The fixed payments are real and contractually set, but they are subject to bounded exceptions for force majeure, customer-caused unavailability, missing insurance, damage, termination, and default, among other things. The value for the customer is the combination of predictable payment and ownership of an asset that still has technical value after the contract period.

Assessing the potential for your facility

If you want to know how the fixed payment model looks for your specific system, we can have a data-based conversation. We typically look at your grid connection, consumption profile, and historical consumption data to make an initial assessment of whether there is a match, and what calculation basis and monthly availability payment are realistically in play.

You are welcome to contact us for an initial, no-obligation conversation.