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Valo CEO Fath says Europe has the capability to support a homegrown battery energy storage system industry, describing integration expertise and manufacturing know-how as strengths of the new Wärtsilä-RCT Solutions joint venture. Valo is also exploring US manufacturing partnerships to address regulatory and tariff challenges, but it has not announced a factory or disclosed financial terms for the venture.
Valo CEO Fath says Europe has the capability to support a homegrown battery energy storage system (BESS) industry, as the newly formed venture combines Wärtsilä’s storage business with Germany-based RCT Solutions. In an interview with Energy-Storage.News, Fath described Valo’s European strengths and said the company is discussing possible US manufacturing arrangements, where tariffs and regulatory changes have complicated market access.
Valo is a 50:50 joint venture between Wärtsilä’s energy storage business and RCT Solutions. Wärtsilä had been reviewing the future of its storage business for more than a year. The company has now stopped reporting energy storage as a separate segment, removed its former financial targets for the business and suspended demand guidance as the venture starts under a new structure. Wärtsilä said the transaction represented less than 5% of its total assets; financial terms were not disclosed.
Fath said the partners bring different capabilities. Wärtsilä contributes experience integrating batteries with its GEMS energy management software, renewable generation and engine-powered microgrids. RCT Solutions brings a stronger presence in Germany and experience in manufacturing and the highly regulated Indian market. Fath said that manufacturing knowledge can help Valo work with major battery suppliers and manage production and supply chains.
The company plans to remain involved throughout a storage project’s life, from early development, including land and grid-connection considerations, through installation and ongoing operation. Fath said BESS systems may need software or operating changes as market opportunities, grid codes and regulations shift. He also said Valo is in discussions with prospective US manufacturing partners, but has not identified a partner or announced a factory.
Europe’s Storage Supply-Chain Opportunity
Fath’s comments speak to a wider industrial question: whether European companies can build and support battery storage systems while depending on global suppliers for key components. The joint venture’s stated strengths—system integration, software and manufacturing expertise—could help it serve projects where local market knowledge and compliance matter. The interview, however, sets out the CEO’s assessment and strategy, not proof that Valo or Europe has secured a larger domestic supply base.
Storage systems help balance electricity supply and demand and can support the integration of renewable generation. Fath also linked rising electricity needs to data centres, electric vehicles and industrial electrification, arguing that power demand is growing for reasons beyond climate policy alone. If that demand continues, the ability to deploy and operate storage could matter to energy developers and grid operators as well as equipment suppliers.
For Valo, the immediate business challenge is converting the partners’ capabilities into durable commercial performance. Wärtsilä’s storage business had been profitable, according to the source report, but its margins were thinner than those of the parent group’s other reporting segments. Under the new structure, the business no longer has its former standalone financial targets or public demand guidance, making its progress harder to track through Wärtsilä’s segment reporting.
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From Wärtsilä Storage to Valo
Wärtsilä’s energy storage business became a significant name among battery system integrators outside China. Its history includes Greensmith Energy, a software developer Wärtsilä acquired in 2017. The resulting GEMS platform is presented by Wärtsilä and now Valo as a tool for managing complex energy systems, including combinations of batteries, solar panels and generators.
The business’s position in the United States became difficult as tariffs affected integrators sourcing lithium cells from Chinese suppliers. Fath said establishing a US manufacturing base—owned by Valo or operated through a contractor—could help the company respond to local rules and changes in sourcing requirements. He said the preferred route is to work with established partners, with setting up a factory an option if partners cannot meet regulatory or operational requirements.
Valo’s business model is expected to retain the long-term customer support approach associated with Wärtsilä’s former storage operation. Fath described battery projects as requiring repeated adjustments: a grid service may become less profitable as more providers enter, or a new grid code may require changes to system software. The venture therefore expects to support both project development and asset operations, rather than treating installation as the end of its role.
“Europe has the capability”
— Valo CEO Fath, speaking to Energy-Storage.News
Factory Plans and Performance Remain Open
Valo has not disclosed the financial terms of its formation or provided new public financial targets and demand guidance. The interview does not specify a timeline for the venture’s US manufacturing discussions, identify potential partners, or confirm whether Valo will build or contract a factory. The scale of any investment and the markets it would serve also remain unknown.
Fath’s view that Europe can support a homegrown industry is a statement of the CEO’s assessment. The source material does not provide production targets, European content requirements, new customer contracts or evidence that Valo will manufacture battery cells in Europe. It also gives no updated financial results for the new venture. How Valo’s combination of software, integration and manufacturing experience will affect profitability is not yet clear.
The company’s exposure to policy shifts remains another open issue. Fath said regulatory requirements can affect battery ownership, grid connection and component sourcing, but gave no specific forecast for future rules or tariffs. The interview does not establish how quickly Valo could change suppliers or production locations if those rules change.
Valo’s Next Market Decisions
The next visible developments are likely to be decisions on Valo’s manufacturing strategy and how it reports its performance as a standalone venture. Fath said discussions with prospective US parties are under way, but no timetable or outcome was provided. Any announcement identifying a partner, a factory location or a production arrangement would clarify how the company intends to respond to US market conditions.
Valo will also need to demonstrate how the combined businesses work together on projects. Relevant indicators could include new customer contracts, project deployments, the use of GEMS across different energy systems, and the venture’s ability to support customers as grid requirements change. The source report provides no dates for those milestones, so the timing and scale of future announcements are uncertain.
Key Questions
What is Valo?
Valo is a 50:50 joint venture formed by Wärtsilä’s energy storage business and RCT Solutions. It provides battery energy storage system services and plans to support projects from early development through ongoing operation.
What did Fath say about Europe’s BESS industry?
Fath said Europe has the capability to support a homegrown battery storage industry. The interview presents this as his assessment; it does not announce European production targets or new factory plans.
Is Valo building a factory in the United States?
No factory has been announced. Fath said Valo is in talks with prospective parties and would prefer to work with manufacturing partners where possible. He described setting up a factory as an option if partners cannot meet requirements.
Why does Valo think manufacturing knowledge matters?
Fath said it can help the venture manage production and supply-chain issues and negotiate with major battery suppliers. He also pointed to the need to meet local regulatory requirements, which can change across markets.
What remains unknown about the joint venture?
The companies have not disclosed the venture’s financial terms, new financial targets, US manufacturing partner or factory timeline. Valo’s future financial performance and the measurable impact of its combined capabilities are also not yet established.
Source: energy-storage.news
