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Valo CEO Fath says Europe has the capability to support a homegrown battery energy storage system industry, pointing to the venture’s software, integration and manufacturing expertise. The 50:50 joint venture between Wärtsilä’s former energy storage business and RCT Solutions is also exploring options for US manufacturing, but has not announced a factory or disclosed financial terms.
Valo CEO Fath says Europe has the capability to support a homegrown battery energy storage system (BESS) industry, as the new venture combines Wärtsilä’s energy storage business with Germany-based RCT Solutions. In an interview with Energy-Storage.News, Fath described the partnership’s software, system integration and manufacturing experience as foundations for serving growing electricity demand; he also said Valo is discussing potential US manufacturing arrangements, without naming a partner or confirming a factory.
Valo is a 50:50 joint venture formed by Wärtsilä’s energy storage business and RCT Solutions. Wärtsilä had evaluated the future of its storage business for more than a year, according to the report. The parent company said the transaction represented less than 5% of its total assets; financial terms were not disclosed. Wärtsilä has stopped reporting energy storage as a separate financial segment, scrapped existing financial targets for it and suspended demand guidance as the operation begins under the new structure.
Fath said the partners bring complementary strengths. Wärtsilä contributes experience integrating batteries with renewables, generators and complex energy systems, as well as its GEMS energy management software, originally developed by Greensmith Energy. RCT contributes a stronger presence in Germany’s renewable energy market, experience in India’s regulated market and manufacturing knowledge. Fath said that manufacturing background would help Valo work with large battery suppliers and manage production and supply chains.
The company’s customer support model is expected to cover projects from development through the operating life of a battery asset. That can include identifying suitable land and grid connections, configuring systems and updating software as market conditions or grid rules change. Fath described storage operations as an ongoing process: a battery may need a different revenue-generating service when competitors enter a market or regulations change. Valo has not published detailed financial targets or a demand forecast for the new business.
Europe’s Case for Battery Storage
Fath’s comments address a strategic question for Europe’s energy transition: whether the region can build and sustain businesses that design, integrate and manufacture battery storage systems, rather than relying entirely on overseas supply chains. Storage can help renewable generation contribute to electricity supply when production and demand do not coincide, while also supporting grids and other energy users. Fath links the need for such systems not only to climate goals but to broader electrification, including data centres, electric vehicles and industry.
For Valo, the case is also commercial. The joint venture is starting after Wärtsilä’s storage business was removed from its parent’s reporting segments, leaving its former targets and demand guidance behind. Combining software and integration capabilities with RCT’s manufacturing background could help the business compete in markets where procurement, local rules and supply-chain requirements shape project economics. Those are the company’s stated advantages, not evidence yet of new market share, factory output or improved financial results.
The US illustrates the practical challenge. Fath said tariffs and changing requirements have made the market complex for integrators sourcing battery cells from China. Local or contracted manufacturing could help address some regulatory and sourcing needs, but it would require a suitable partner, investment and decisions about where production makes commercial sense. The interview does not establish that Valo has resolved those questions.
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From Wärtsilä to a Joint Venture
Wärtsilä’s energy storage business had become a significant BESS system integrator, particularly among companies outside China, according to the report. It was consistently profitable, but its margins remained thinner than those of Wärtsilä’s marine and engine power businesses. The parent company spent more than a year reviewing its future before the business was combined with RCT Solutions in Valo. The new arrangement changes how the operation is owned and reported; the source does not provide a timetable for financial performance under the joint venture.
The partnership also maintains links to Wärtsilä’s work in data centres and engine-powered microgrids for islands and mining sites. Fath said those activities give Valo access to an existing global network. On the RCT side, the company’s German presence and manufacturing experience are central to the stated rationale for bringing the businesses together. The venture’s name, Valo, means “light” in Finnish, the report says.
Valo’s strategy builds on the established role of battery system integrators: combining battery equipment, control software and other power assets into functioning projects, then supporting them as operating conditions change. Fath said the company intends to remain involved from early development through ongoing upgrades. The interview presents this as continuity with Wärtsilä’s former approach, alongside a new ownership structure and RCT’s manufacturing contribution.
“Europe has the capability”
— Valo CEO Fath, in an interview with Energy-Storage.News
Factories, Forecasts and Funding
Several key details remain undisclosed. Valo has not identified prospective US manufacturing partners, said whether it will own or contract a facility, or provided a decision date. Fath said discussions with potential parties are under way and that the company could establish factories if partners cannot meet requirements, but no facility has been confirmed.
The venture has also not disclosed financial terms for its formation, new revenue or profitability targets, or a demand forecast. The source says Wärtsilä valued the transaction at less than 5% of its total assets, but does not give a more precise figure. It is not clear how Valo’s ownership will affect the former business’s financial performance, staffing, production footprint or customer commitments.
Fath’s assessment that Europe can support a homegrown industry is a view expressed by the CEO, not a published assessment of European manufacturing capacity or costs. The interview does not set out specific production volumes, investment amounts, supply agreements or public-policy measures that would establish how such an industry would scale.
Valo’s Near-Term Decisions
The next developments to watch are whether Valo names a manufacturing partner in the United States, announces a locally based production arrangement or decides that it needs to build capacity itself. Such an announcement would clarify how the company plans to address tariff exposure and changing sourcing rules. Until then, the US approach remains under discussion, according to Fath.
Investors, customers and the wider storage market will also be looking for details about Valo’s operating plans after the business moved out of Wärtsilä’s segment reporting. Those could include financial targets, demand guidance, project wins or updates on how the joint venture will use GEMS software and RCT’s manufacturing expertise. The source provides no timetable for those disclosures, so the venture’s plans and commercial results remain developing.
Key Questions
What is Valo?
Valo is a 50:50 joint venture between Wärtsilä’s former energy storage business and RCT Solutions. It will develop and support battery storage systems and related energy projects.
What did Fath say about Europe’s battery storage industry?
Fath said Europe has the capability to support a homegrown BESS industry. He pointed to Valo’s integration and software expertise and RCT’s manufacturing background, but did not provide a production target or a specific European investment plan.
Is Valo opening a factory in the United States?
No factory has been confirmed. Fath said Valo is in talks with prospective parties and may establish a factory if it cannot find a partner able to meet market requirements.
What does the new venture mean for Wärtsilä’s energy storage reporting?
Wärtsilä has stopped reporting energy storage as a separate financial segment, scrapped the business’s existing financial targets and suspended demand guidance as Valo begins operations. The financial terms were not disclosed; Wärtsilä said the transaction represented less than 5% of its total assets.
Source: energy-storage.news
