For an energy-storage project, the contract that defines its revenue can take two related but distinct shapes, and the difference determines who controls the battery and who bears market risk. In a tolling agreement, the customer pays the project owner — typically a fixed capacity payment — for the right to dispatch the storage system as the customer chooses, and the customer keeps the energy and the value of how it is dispatched. The owner retains title to the asset and is paid largely regardless of how the market moves. In a power purchase agreement (PPA), by contrast, the counterparty buys the electricity the project produces or dispatches, usually at a contracted price per unit of energy. The PPA buyer pays for output; the tolling buyer pays for control.

Both structures appear in SEC filings as descriptions of how a storage business books revenue. Energy Vault Holdings, Inc., in its Form 10-K filed with the U.S. Securities and Exchange Commission, describes its tolling model directly, explaining that in certain circumstances it enters into tolling arrangements in which customers purchase the energy storage and dispatch of electricity while the company retains an ownership interest in the system.

"In certain circumstances we enter into tolling arrangements in which customers purchase the energy storage and dispatch of electricity from us while we retain an ownership interest in the system."— SEC, Energy Vault Holdings Form 10-K, source

Who bears the risk, and who keeps the upside

The economic core of the comparison is risk allocation. Under a tolling agreement, the customer takes the market risk and the market upside: because the customer controls dispatch and keeps the energy, it captures the arbitrage and ancillary-service value the battery can earn — and it absorbs the downside when spreads compress. The owner, paid a capacity charge, has a more bond-like revenue profile, which is attractive to lenders precisely because it is insulated from wholesale price volatility. Under a PPA, the allocation depends on the contract's pricing: a fixed-price PPA shifts price risk to the buyer, while structures tied to market indices leave more with the seller. The Energy Vault filing is explicit that its tolling arrangements come paired with retained ownership — the company keeps the asset on its balance sheet and is compensated for the storage and dispatch service rather than selling a fixed quantity of energy.

That retained-ownership feature is not incidental; it changes the business model and the disclosures. Energy Vault's filing notes that owning and operating storage systems exposes it to additional risks compared with simply selling a system to a customer who then owns it. When an owner-operator keeps title, it carries the operating obligations, the performance risk, and the asset on its books over the contract life — and it earns the recurring tolling revenue in return. A pure equipment sale, by contrast, transfers both the asset and those obligations to the buyer at the point of sale. The choice between selling a system, signing a PPA for its output, and tolling it is therefore a choice about how much of the project's life-cycle risk and recurring revenue the developer wants to retain.

Why the distinction matters for unit economics

For anyone evaluating whether a storage asset's economics pencil, the contract type tells you which revenue line to model. A tolling agreement points you to a contracted capacity payment — a relatively predictable figure that supports debt sizing — and tells you the dispatch upside belongs to the offtaker, not the owner. A PPA points you to a price-times-volume calculation and tells you to scrutinize the volume assumptions and the price floor. A merchant model, with neither in place, leaves the asset exposed to wholesale spreads and ancillary-service prices that can swing sharply. Reading the filing to determine which structure governs a project is the first step in any honest unit-economics analysis, because the same battery can look like a stable annuity under a toll and a volatile trading position on a merchant basis.

The contract type also signals which party is positioned to benefit as storage markets evolve. As more batteries enter a market such as ERCOT or CAISO, the spreads that merchant and PPA-style arrangements depend on can compress, while a tolling owner — paid a fixed capacity charge — is insulated from that erosion but also gives up the upside if spreads widen. That asymmetry is why developers and offtakers negotiate hard over the structure: an offtaker willing to take dispatch control through a toll is betting it can extract more value from the asset than the fixed capacity payment it owes, while the owner is accepting a steadier, smaller return in exchange for shedding market risk. Energy Vault's disclosure that it has entered tolling arrangements while retaining ownership places it on the owner-operator side of that bet for those projects, with the recurring, capacity-like revenue and the operating obligations that come with it.

The grounded distinction is therefore straightforward and load-bearing: tolling sells the right to dispatch and keeps title with the owner; a PPA sells the electricity. Energy Vault's 10-K documents the tolling side of that choice in its own words and flags the additional risks of retained ownership that come with it. What the narrative disclosure does not provide is the contracted capacity price or the per-unit PPA price for any specific project — those terms typically reside in the agreements rather than the filing's prose. But the structural definition the filing supplies is enough to read a storage company's revenue correctly: identify whether each project is sold, tolled, or contracted under a PPA, and you have identified who controls the battery, who bears the market risk, and which line on the income statement the project actually feeds.