Swiss fund manager SUSI Partners acquired a 50 percent stake in AMS’ Southern California portfolio of distributed battery storage systems Monday.

The package includes more than 90 lithium-ion systems adding up to storage capacity of 63 megawatts and 340 megawatt-hours. AMS will continue to operate the assets.

AMS secured contracts with utility Southern California Edison back in 2014 to install batteries at commercial and industrial sites to lower both customer bills and grid demand in constrained areas. AMS owes the utility 50 megawatts and 200 megawatt-hours of capacity, but the company said recently it will build out its fleet to 62 megawatts and 352 megawatt-hours to allow for greater operational flexibility.

As of mid-March, AMS had brought online 27 megawatts and 142 megawatt-hours of energy storage capacity at 40 sites within SCE territory.

The SCE deal heralded the arrival of the still-nascent commercial storage market, but AMS soon found that developing large amounts of energy storage required more capital than a young startup could muster. It secured a partner in Macquarie’s Green Investment Group, which supplied $200 million in 2016 to bring the portfolio through the development phase.

Now Macquarie has sold half of the portfolio to SUSI to own for the long haul. The transaction illustrates how the distributed storage business model has evolved to incorporate larger sources of capital.

“SUSI’s entry into the U.S. and acquisition of a 50 percent stake in Macquarie’s behind-the-meter portfolio signals a leap in storage investments from just strategic in nature to those driven by the kind of economic returns generally expected of traditional energy assets,” said Ravi Manghani, energy storage director at Wood Mackenzie Power & Renewables.

The Southern California contracts are “golden,” Manghani added, thanks to the steady contracted revenue stream from the utility. Such a dependable offtaker hedges the risk associated with revenue from other sources, like customer payments or market participation.

This marks the first U.S. investment for SUSI, a Swiss firm that invests on behalf of large institutions, and runs a rare fund dedicated to energy storage assets. That fund achieved final close in 2018 with 252 million euros. Previously, the ecosystem of storage asset owners in the U.S. was limited to just a few names, including Macquarie and Generate Capital.

Institutional investors have largely shied away from storage, which they consider newer and riskier than better-understood assets like wind and solar farms.

They could, however, play a vital role in the industry’s growth. Batteries are expensive to deploy, and generate returns over many years. If developers can find the capital to develop such projects, they still benefit from unloading them to free up capital for new projects.

Macquarie’s Green Investment Group prefers to focus on development and construction, said Rob Kupchak, Macquarie Capital senior managing director and head of Infrastructure and Energy Americas, in a statement.

“As our portfolio reaches a more mature stage with projects entering the operational phase, we are delighted to bring in SUSI as a partner,” he said.

SUSI described its investment decision not in terms of expected returns, but as a way to participate in California’s legislatively committed goal of zero-carbon electricity by 2045.

“We are thrilled with this transaction in light of the role the portfolio has as a critical enabler of California’s long-term energy transition policy and look forward to continue investing in the U.S. market,” SUSI Partners CIO Marco van Daele said in the announcement.

The commercial storage market remains almost entirely confined to California, which has passed a suite of supporting policies. Massachusetts and New York have assembled their own support structures for storage deployment, which could lead to a boom in the Northeast in the coming years.