Operating agreement

At the end of the operating agreement, the property owner's options — renewal, asset transfer, or removal — are defined in the original agreement, not determined at year ten.

What happens at year ten is determined at the outset. The property owner chooses from three documented options — renewal, asset transfer, or removal at HNordic's cost.

A ten-year operating commitment raises a reasonable question: what happens at the end of it? The concern is usually one of two things — either the property is left with ageing infrastructure and a removal liability, or HNordic retains control of the asset indefinitely. Neither is the right frame.

The operating agreement defines the end-of-term options at the point of signature. The property owner does not arrive at year ten to find an unresolved situation.

What the operating agreement term covers

The operating agreement governs HNordic's responsibility to install, operate, maintain, and optimise the energy infrastructure for the defined term. During this period, HNordic operates the battery, generation assets, and AI management system remotely — the property owner has no operational obligation. Maintenance, repair, and system updates are HNordic's responsibility. The contracted energy income accrues to the property owner under the terms of the agreement.

The infrastructure assets remain on HNordic's balance sheet for the duration of the term. At the end of the term, the agreement's end-of-term clause applies.

End-of-term options

Contact HNordic directly to confirm which options apply to a specific property and agreement structure. The typical positions:

Contract renewal — the operating agreement is extended on revised terms, reflecting the residual value and operating performance of the installed infrastructure. A system that has been well maintained and performing to specification has substantial remaining economic life — LFP battery systems are typically designed for fifteen to twenty years of operation; wind turbine rotors are rated to twenty years. Renewal is the most common outcome for property owners satisfied with the programme.

Asset transfer to the property owner — the battery, generation assets, and AI management system are transferred to the property owner at an agreed valuation. The EPC improvement that the assets produce is permanent — it does not reverse when the asset transfers. The grid-services income continues under whatever operating arrangement the property owner establishes after transfer.

Asset removal at HNordic's cost — where the property owner does not wish to continue the programme and does not wish to take ownership of the assets, HNordic removes the infrastructure at its own cost. The property returns to its pre-installation configuration.

What does not change at year ten regardless

Two things are structural and independent of the end-of-term outcome.

The EPC improvement is permanent. The energy infrastructure improves the property's EPC rating by reducing its modelled grid demand. This improvement persists whether the assets are renewed, transferred, or removed — EPC certificates are valid for ten years, and the property's energy profile is materially better than its pre-installation baseline.

The property owner retains the asset. The operating agreement does not give HNordic any ownership interest in the property itself. The property remains entirely in the property owner's name throughout the operating term and at its conclusion.

The battery condition at year ten

Commercial lithium iron phosphate (LFP) batteries are rated for 3,000 to 6,000 full charge-discharge cycles before reaching 80% capacity. A battery cycling once per day reaches approximately 3,650 cycles in ten years — still within or near the lower end of the rated life range. At the end of a ten-year operating term, the battery has substantial remaining capacity. A transferred asset is not at end of life.

HNordic's operating model balances revenue optimisation with battery longevity over the full operating term.

Key takeaways

See also: Does the property owner manage the battery system? · What does a site assessment involve? · Full FAQ