Grid-scale batteries in CAISO earned an average of $4.05/kW-month from merchant markets in the first half of 2025. This represents a decrease of 7.7% from $4.39/kW-month over the same period last year.

However, average revenues from capacity payments rose by around $1/kW-month over the same time frame. This meant that all-in, wholesale average revenues for BESS in CAISO rose by 6% year-over-year.

Within the merchant markets - where batteries earn revenue from Energy arbitrage and Ancillary Services - ​​Integrated Forward Market (IFM) revenues continue to be the largest factor in BESS income, making up 68.7% of the revenue stack in H1 2025. However, Real-Time Dispatch is a growing contributor: its fraction of the CAISO index has grown from 0.5% in H1 2024 to 5% now.

Subscribers to Modo Energy’s CAISO research can read on to understand:

• The evolving market conditions that led to the marginal decrease in merchant revenues.
• How batteries are reshaping the load picture in CAISO, and setting the stage for a continued renewables buildout in California.
• And what revenues from non-merchant sources, like CAISO’s Resource Adequacy program, mean for BESS revenues in CAISO.

This report covers standalone and co-located batteries operating in the CAISO Balancing Authority Area. This is the same set of batteries covered by the Modo Energy CAISO BESS indices.

​If you have any questions regarding the content of this article, reach out to the author at logan@modoenergy.com, or any other member of Modo Energy’s US Research Team.

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Key Takeaways

• Average merchant revenues decreased to $4.05/kW-month in H1 2025, down 7.74% from in H1 2024.