Background & Opportunity
Merus Power’s strategic transition is best understood as an adjacent-market transformation rather than a sudden change of identity. The company was founded in 2008 and initially focused on industrial power quality and wind-power grid-connection technology. Its early capabilities included power electronics, control software and systems engineering. Around 2015, the principal growth engine was still industrial power quality, while energy storage had not yet become a major business. The strategic question was how to find a larger growth opportunity without discarding the technical assets, customer knowledge and engineering routines already accumulated. The external context made the question more urgent. A larger share of renewable generation increased the need for flexibility, balancing and fast-response grid assets. Battery storage could help address those needs, but it was not a simple product extension. Storage projects require system integration, controls, commissioning, reliable operation, financing and the ability to meet the expectations of industrial customers, utilities, renewable developers and grid operators. A company entering the market had to prove not only that its technology worked, but also that it could deliver and support installations at meaningful scale. In 2016, Merus Power added energy storage to its business portfolio. The significance of this decision was the technology bridge behind it. The company could apply experience from power-quality equipment to battery storage systems, including power-conversion equipment, controls and software. This reduced the risk of entering an entirely unfamiliar field. It also created a basis for differentiation: Merus Power was not merely reselling batteries; it was building on capabilities associated with the electrical behavior and control of complex power systems. The transformation required commercial proof. In 2018, the company obtained its first important storage reference project. A reference installation is strategically valuable in infrastructure markets because prospective buyers often need evidence of performance, engineering quality and operational reliability before awarding larger contracts. The project did not complete the transformation, but it gave Merus Power a platform for learning, customer credibility and future proposals. It helped turn storage from a strategic hypothesis into a commercial activity. Capital then became central. In 2021, Merus Power completed a listing to raise capital for storage growth. The listing provided a way to finance product development, production capacity, testing and market expansion. Capital did not guarantee demand or profitability, but it gave management more room to invest ahead of revenue. The strategic model was therefore cumulative: reuse the existing technology base, validate the new offer, raise capital, develop repeatable products and use successful projects to support larger opportunities. The 2023 position showed a business in transition. Net sales were €29 million, EBITDA was €0.2 million and EBIT was -€0.5 million. These figures indicate that the company had reached meaningful commercial scale but had not yet achieved robust profitability. During the same year, it signed a 30MW/36MWh battery storage system order for Finnish grid operations. Compared with an early reference project, this order represented a more substantial test of commercial and delivery capability. The strategic response was productization. Merus Power worked toward modular storage products and more standardized delivery. It also developed internal testing, factory capabilities and project execution routines. Modularization can reduce repeated engineering work, simplify procurement and make a solution easier to sell through international channels. Standardization can improve learning across projects. Yet storage remains a project business, so modules must still be adapted to site conditions, grid requirements, customer specifications and local execution realities. Productization reduces complexity; it does not eliminate it. International growth added another layer. In 2025, the storage business received an approximately €13 million order in Riihimäki, an approximately €17 million order in Mäntyharju and two Polish international orders totaling approximately €4.5 million. These projects widened the company’s geographic footprint and provided evidence that the proposition could travel beyond its original market. They also introduced more variables, including local partners, delivery coordination, commercial terms and differences in project timing. Internationalization therefore increased opportunity and management complexity at the same time. During 2025, Merus Power commercially deployed 30MW/36MWh and 38MW/40MWh grid-forming storage systems in Finland. These installations strengthened the company’s technical reference base. Grid-forming storage can support grid stability functions in addition to storing and dispatching energy, making the system proposition more closely connected to the changing needs of power networks. The projects also demonstrated that Merus Power could work at substantial power and capacity levels. However, larger projects can increase exposure to commissioning risk, working-capital requirements, supply coordination and performance obligations. Lifecycle service became an important complement to project sales. Merus Power’s business model includes maintenance and lifecycle services, allowing the company to remain involved after commissioning. In 2025, the average availability of storage facilities within the lifecycle-service scope was 99%. This is meaningful evidence for a reliability proposition, but it must be interpreted within the stated service scope. Service can deepen customer relationships, protect operating performance and create revenue beyond the initial project. It also requires disciplined monitoring, response capability, spare-parts planning and clear responsibility over the asset’s life. The 2025 financial results showed a strong operating improvement. Revenue rose from €35.834 million in 2024 to €54.648 million in 2025, an increase of 52.5%. EBITDA moved from -€0.798 million to €1.815 million. EBIT improved from -€2.055 million to €0.318 million. The movement suggests that higher volume and improving execution were beginning to create operating leverage. It also supports the claim that storage, productization and delivery capability were changing the economic scale of the business. The numbers nevertheless contain an important warning. Net loss in 2025 was still €1.115 million. In addition, 2025 order intake was €48.03 million, lower than €53.626 million in 2024. This does not conflict with higher revenue. In project businesses, orders, deliveries and revenue recognition occur at different times. A strong revenue year can reflect earlier bookings and completed work, while lower current order intake can reduce future visibility. Management therefore needs to distinguish backlog conversion from durable demand creation. The case also shows why growth must be managed as an operating system. Winning a large storage contract is only one step. Merus Power must engineer the system, secure components, coordinate construction, commission the asset, meet performance expectations and support it through its lifecycle. A modular platform can make these activities more repeatable, while international distributors can broaden reach. But neither approach works without cost control, quality assurance, working-capital discipline and careful selection of projects and partners. The company’s competitive advantage lies in the combination of capabilities rather than in any single fact. Power-quality expertise supports system understanding. Software and controls support grid-responsive operation. Reference projects reduce buyer uncertainty. Listing capital supports investment. Modular products support repeatability. Factory and testing capability support execution. International channels extend the market. Lifecycle service supports reliability and a longer customer relationship. The strategic risk is that rapid project expansion could stretch these capabilities before they are fully institutionalized. The most appropriate strategic choice is therefore continued storage prioritization with staged scaling. Returning fully to traditional power quality would underuse the evidence of market growth and customer acceptance. Pursuing expansion without stronger controls would expose the company to project delays, margin pressure and cash strain. Exiting project storage would abandon the commercial platform that creates service and product opportunities. The better path is to retain storage as the core growth direction while setting clear gates for delivery quality, margin, working capital, availability and repeatability. Merus Power’s transformation has already changed the shape of the business. From a company centered on industrial power quality, it has become a provider of battery storage, power-quality equipment, software, maintenance and lifecycle services for industrial and grid customers. Revenue reached €54.648 million in 2025, EBITDA turned positive and large Finnish and Polish projects expanded its references. Yet net profit remains negative and order intake is uneven. The transformation is therefore successful as an operating improvement, but unfinished as a profitability story. The next test is whether the company can convert technical differentiation and project growth into stable, scalable lifecycle economics.
Original Problem / Model
The initial opportunity came from a market shift rather than abandoning the legacy business. Renewable generation increased demand for flexibility, balancing and grid stability, making storage a plausible adjacent market rather than an unrelated diversification. Merus Power could reuse power conversion, controls and software experience, reducing the technological discontinuity of entry. But storage projects also require commissioning, procurement, financing, customer coordination and long-term reliability. The company therefore needed to prove both technical performance and repeatable execution. The strategic model was to preserve the legacy capability while building a standardized offer that could serve industrial customers, utilities, renewable developers and grid operators at meaningful scale.
Turning Point
The 2016 decision added energy storage to the portfolio, and the 2018 reference project supplied early commercial validation. The 2021 listing then provided capital for growth. These milestones formed a sequence: reuse technology, prove the offer, finance expansion and build delivery capacity. The 2023 30MW/36MWh order showed that the company was progressing from an initial reference toward larger grid-scale commitments. The sequence mattered because each milestone reduced uncertainty. The portfolio decision tested strategic fit; the reference project provided customer evidence. The listing created funding capacity for product development and expansion, although it did not guarantee demand or profit. Together, these steps moved storage from experiment toward a funded, commercial, increasingly repeatable business.
Core Decision
Productization was the operating bridge between strategy and scale. Modular systems, standardized delivery, internal testing and factory capability could reduce repeated engineering and improve execution. They could not remove site-specific requirements, commissioning risk or project timing. Merus Power therefore needed both a better product architecture and stronger project-management discipline.
Execution / Model / Acquisition Changes
The 2025 project evidence broadened the company’s commercial base. Orders included approximately €13 million in Riihimäki, approximately €17 million in Mäntyharju and two Polish orders totaling approximately €4.5 million. Finland also saw commercial deployment of 30MW/36MWh and 38MW/40MWh grid-forming systems. These projects supported internationalization and technical credibility, while creating greater exposure to partners, working capital, commissioning and delivery coordination. Lifecycle services added another layer: facilities within the service scope achieved 99% average availability in 2025. Execution also required selective internationalization. The Riihimäki and Mäntyharju awards strengthened the Finnish pipeline, while the Polish orders tested cross-border commercialization. The two grid-forming deployments demonstrated substantial power and capacity levels and expanded technical references. Yet larger projects can increase commissioning risk, supply coordination demands and working-capital exposure. Lifecycle services extended the relationship beyond initial delivery; 99% average availability within the stated service scope supported reliability, but did not establish company-wide profitability. Management therefore needed to coordinate product modules, factory capability, partners and after-sales support while controlling cost and project timing.
Measurable Results
Financial performance confirms meaningful progress but not completion. Revenue rose from €35.834 million in 2024 to €54.648 million in 2025, an increase of 52.5%. EBITDA improved from -€0.798 million to €1.815 million, and EBIT from -€2.055 million to €0.318 million. However, net loss remained €1.115 million. Order intake fell from €53.626 million in 2024 to €48.03 million in 2025. Project timing explains why lower orders can coexist with higher revenue, but it also makes forward visibility and margin control essential. These results indicate that earlier project bookings and completed deliveries contributed to the revenue increase, so higher sales do not by themselves prove durable demand. Lower order intake can reduce future visibility even when current revenue is strong. The 2025 result therefore supports continued storage investment but also requires disciplined backlog conversion, margin management and cash control. Productization and lifecycle services may improve repeatability and customer retention, yet net profitability remains the decisive test of completion.
Lessons
The recommended path is disciplined continuation, not retreat or uncontrolled acceleration. Merus Power should keep storage as the core growth direction, use modules and services to improve repeatability, and expand internationally through carefully selected projects and channels. Management should judge progress by delivery economics, availability, working capital, order quality and net profitability as well as revenue. The transformation has created a credible platform; the next task is to make its economics durable.