The Third Edition of UL 9540, published in June 2023, introduced long-needed clarity for Battery Energy Storage Systems (BESS). Adoption across North America has progressed at varying speeds as Authorities Having Jurisdiction (AHJs) work through interpretation, alignment with existing enforcement practices, and integration into local approval processes. In Canada, the standard was incorporated into the 2024 Canadian Electrical Code (CEC, Part I), formally recognizing both AC- and DC-coupled ESS architectures. However, as with many newly adopted codes, consistent application at the local level has taken time, and differing interpretations among AHJs across America have contributed to extended review cycles and uncertainty for installers into 2025/26.
The most important update was simple but impactful: UL9540 now distinguishes between AC ESS and DC ESS.
Both system types are now evaluated to the same safety requirements, including UL9540A fire testing, system-level protections, and performance validation. The primary difference is how the Power Conversion Equipment (PCE) is documented: AC ESS includes the inverter within its certification, DC ESS verifies inverter/battery compatibility through manufacturer documentation. All the safety tests between AC ESS and DC ESS are identical.
This shift enables modern DC battery systems to be certified as UL9540 DC ESS, which offers flexibility in pairing with UL 1741 or CSA 107.1-listed inverters, rather than requiring fixed, pre-engineered packages.
The following table compares AC ESS with DC ESS.
| Item | AC ESS | DC ESS |
|---|---|---|
| PCE Integration | Included as part of the ESS certification and evaluated to UL 1741 or UL 62109-1 | Evaluated separately under UL 1741 or UL 62109-1 as standalone or multi-mode power conversion equipment |
| Certification Scope | ESS includes the inverter and battery as one integrated product | ESS functions as a standalone DC system compatible with multiple PCE |
| Compatibility Documentation | Fixed configuration, each pair included a specific inverter and battery | Managed by the manufacturer per UL 9540 Clause 46.14 |
| Safety Evaluation | UL 9540A fire testing and system-level protection | UL 9540A fire testing and system-level protection (identical evaluation as AC ESS) |
The UL9540 DC ESS fits into the National and Canadian Electrical Code (CEC) as published in the UL9540 Third Edition, as shown below.
| Component | Required Certification | Role |
|---|---|---|
| 1. Battery System | UL 9540 (Listed as “DC ESS”) | UL 9540 certifies the battery pack, BMS, and protection as a safe standalone system. |
| 2. Inverter | UL 1741 or CSA C22.2 No. 107.1 | The UL or CSA listing certifies the inverter’s safety and grid interaction capabilities. |
| 3. Interoperability | Manufacturer Manual / Closed-Loop Integration | The battery’s UL 9540 manual lists the specific inverter brand/model as compatible, or defines the integration settings. |
The challenge is largely interpretive, not technical. The disconnect between the national governing bodies and many parts of North America may be due to a misalignment in the mindset of both inspectors and system designers.
Of all the components in a solar energy system, only the battery and inverter required being tested as a single unit. None of the other components was restricted in this way. Whether it be solar panels, junction boxes, DC disconnects, AC distribution panels, and so on, each component serves a particular purpose and is tested to ensure it operates as defined, in a safe and controlled manner. However, the UL listing for these components is not determined by their pairing with another component. That would be restrictive. Compliance is not, and should not, be contingent on connecting to a specific device, which was the case for batteries and inverters in the first and second editions of UL9540.
UL 9540 Third Edition addresses this issue by decoupling the inverter and battery. UL 9540 ensures safe operation by testing the safety and functional operation of the DC ESS components, including the BMS and control logic, thermal protection, electrical safety, and system integration. The boundaries of the DC ESS are firmly defined, allowing installers and AHJs to concentrate on other aspects of the installation, such as the installation environment, component spacing, and connection methods.
This shift in what to inspect in a UL 9540 Third Edition energy storage system requires training. The lack of understanding of the new regulations has resulted in varying timelines for adoption across North America, leading to inconsistent enforcement and frequent project delays. We look forward to everyone involved gaining a better understanding of the new regulations in 2026 and to increased adoption of best practices.
To approve a DC ESS installation under UL9540 Third Edition, AHJs can follow a simple checklist:
This ensures that the battery and inverter are individually compliant and safe as a combined system.
Discover Energy Systems provides integration guides and LYNK II Gateway documentation listing validated inverter models. The HELIOS ESS manual also lists inverter brands that are supported through its native communication protocol settings. These resources help AHJs verify compatibility and provide instructions that enable proper communication between the ESS and the inverter.
On the C&I side, Discover's AES Cabinets for Hybrid Inverter Systems is part of a broader C&I battery energy storage range designed to pair with separately certified UL 1741 inverters under this same Third Edition framework.
UL 9540 Third Edition represents a significant step forward in modernizing energy storage safety for both integrated AC systems and modular DC systems. The Third Edition offers increased safety and flexibility while maintaining protection requirements for all types of energy storage systems.
The full benefit of the new standard will be realized when AHJs fully understand and apply the new framework. As inspectors transition from fixed, pre-engineered systems to modular DC ESS paired with certified inverters, consistent training and documentation become essential. With guidance and manufacturer-supported compatibility tools, jurisdictions across North America can confidently approve safe, flexible, and future-ready energy storage installations, unlocking the full value of the UL9540 Third Edition.

In less than a decade, UL 9540: Standard for Energy Storage Systems and Equipment has gone from a brand-new concept to the de facto standard for commercial and residential battery energy storage in North America. First published in 2016, the standard has gone through three major editions, each one responding to rapid changes in technology, fire-safety knowledge, and installation codes such as NFPA 855.
UL 9540 has changed how manufacturers operate, as well as how Authorities Having Jurisdiction (AHJs), fire officials, and electrical inspectors evaluate projects. UL9540 defines what to look for on drawings, what documentation reviewers should expect in permitting applications, and how comfortable inspectors feel when they approve systems that can store tens, hundreds, or thousands of kilowatt-hours of energy in one place.
This topic traces UL 9540’s evolution from its First Edition (2016), through the Second Edition (2020), and into the Third Edition (2023, with 2025 revisions), highlighting:
UL9540 was developed in response to emerging safety concerns, the rapid evolution of lithium battery technology, and the need for system-level certification that extended beyond simply testing individual components.
Two major factors drove the development UL9540:
In the early 2010s, lithium-ion batteries began moving from consumer electronics into:
Before UL 9540 existed, the standards were:
However, there was no standard evaluating an ESS as a complete, integrated system, including the battery, BMS, inverter interactions, enclosure, wiring, thermal management, and safety controls. This gap became unacceptable as systems increased in size and energy density.
Between 2011 and 2014, several ESS fire events in the U.S. and elsewhere raised urgent safety concerns. Investigators found that the problem was not just the battery cells, but the interaction of the entire system (thermal runaway propagation, enclosure behavior, protection logic, charging controls, and so on) that contributed to the fire.
This insight prompted regulators and standards developers to recognize that component-level certification was insufficient for an ESS.
Recognizing the need for a unified evaluation method, Underwriters Laboratories initiated the development of a new standard focused on:
During this period, UL worked closely with:
Stakeholder meetings, technical workshops, and draft reviews led to the development of the first framework, which ultimately became UL 9540.
At the same time, UL began developing UL 9540A, a large-scale fire test designed to measure:
Although UL 9540A was published separately, it became an essential input to UL 9540 system certification and later to NFPA 855 and the International Fire Code.
This co-development was a significant aspect of UL 9540’s development.
In 2016, UL officially released:
The first edition provided:
This publication marked the first time manufacturers could receive ESS-level certification, not just component listings.
When UL 9540 was first introduced in late 2016, the codes and standards were fragmented.
UL 9540 was the first system-level standard that tied the pieces together. Manufacturers could receive ESS-level certification, not just component listings. The First Edition (ANSI/CAN/UL 9540:2016) defined requirements for energy storage systems intended to receive electric energy and store it for later use, covering both stationary and mobile, and indoor and outdoor systems.
Key elements:
Most early UL 9540 listings were integrated systems. A battery paired with a specific inverter and controls, evaluated as one self-contained ESS. UL’s first UL 9540 certification was issued to an Enphase home energy storage system in 2016, which illustrates this “fixed pairing” approach.
For AHJs and inspectors, the UL9540 First Edition simplified their job.
Limitations
However, several limitations quickly emerged:
The UL 9540 First Edition gave AHJs a binary check (“Is it UL 9540-listed?”), but it did not provide the tools required to manage complex ESS sites, spacing, and fire protection. That gap would drive the next revision.
UL9540 Second Edition was published on February 27, 2020.
By 2019, several trends had emerged.
The Second Edition explicitly addressed these concerns.
The Second Edition turned UL 9540 into a bridge between product certification and installation codes.
Differences between the First Edition and the Second Edition:
For AHJs, the Second Edition brought both clarity and complexity:
Some AHJs quickly adopted checklists to align UL 9540 listings with NFPA 855 placement rules, while others struggled with the learning curve, especially when training and resources were limited.
By the early 2020s, the technology landscape shifted again:
The Third Edition of ANSI/CAN/UL 9540, issued on June 28, 2023, was designed to “keep pace with rapidly advancing technology” and better align with installation codes.
There are several improvements to the Third Edition, compared to the Second Edition.
The Third Edition transforms UL 9540 from a “one-size fits all” ESS listing into a flexible framework that can handle integrated AC systems, modular DC battery cabinets, and future hybrid architectures, while still imposing a common safety baseline.
The AC/DC distinction and modular DC ESS approach have had mixed impacts on AHJs:
Even in Canada, where the Third Edition has been incorporated as an ANSI/CAN standard and referenced in the 2024 Canadian Electrical Code, many AHJs are slow to recognize DC ESS listings and modular pairings, continuing to expect fixed AC ESS packages.
The table below summarizes the three editions.
| First Edition (2016) | Second Edition (2020) | Third Edition (2023/2025) | |
|---|---|---|---|
| Focus | Establish a system-level safety standard for ESS. | Align with NFPA 855 and address lessons from ESS incidents. | Keep pace with advanced architectures and modern codes. Clarify AC vs. DC ESS. Add functional safety. |
| Architecture | Integrated AC ESS; battery + inverter listed as one system. | More robust treatment of larger, modular systems, but still conceptually ESS as a single, integrated category. | Explicit AC ESS vs. DC ESS classification. Support flexible DC ESS paired with separately listed PCE. |
| Safety Features | Basic electrical, mechanical, environmental, and functional safety tests. Limited integration with fire-propagation data. | Tight integration of UL 9540A fire testing, metallic enclosures for many systems, explicit documentation of capacity and spacing limits in manuals. | Clarified capacity/separation rules tied to UL 9540A and NFPA 855, explosion control, external warning systems, noise and fluid-hazard requirements, updated markings and instructions (Annex H). |
| AHJ Impact | Introduced a clear “UL 9540–listed ESS” concept, simplifying approvals for early residential and small C&I systems. | Provided performance-based tools (UL 9540A data and manufacturer spacing tables) but required more technical literacy from inspectors; increased confidence for large ESS at the cost of added complexity. | Consistent treatment of integrated AC ESS and modular DC ESS under a single safety framework. Requires careful review of both battery and inverter listings along with documentation to confirm compatibility. |
UL 9540 has evolved in lockstep with the battery energy storage industry.
Each edition has raised the profile of AHJs and inspectors.
As of 2025, UL 9540 is deeply embedded in North American regulations, referenced by NFPA 855, the International Fire Code, utility standards, and national electrical codes in both the United States and Canada. As energy storage technology continues to evolve, expect UL 9540 to continue to evolve with it.
Discover's own residential and commercial and industrial energy storage systems are built to this Third Edition framework from the ground up — including the UL 9540-certified HELIOS ESS and our AES Cabinets.
Solar panels and battery storage deliver lower electricity bills, energy resilience, and long-term independence from rising utility rates. But every homeowner faces one major question: Should you buy your solar + storage system, or lease it from a third party?
On the surface, leasing seems attractive. There is low or no upfront cost, maintenance is included, and you get immediate bill savings. However, buying gives you ownership, access to rebates, and greater lifetime savings. When installing Discover Energy Systems’ HELIOS ESS lithium battery, which has the lowest-cost-per-kWh storage solution in its class, the financial advantage of ownership is more apparent than ever.
The following illustrates the costs and benefits of buying vs. leasing solar + storage.
(This article will look at the leasing option only in third-party ownership systems. We will not examine the other third-party option, the power purchase agreement.)
Purchasing your solar + storage system means you own the equipment and all the value it produces. Rebates, tax credits, and bill savings flow directly to you—not a leasing company. With Discover’s HELIOS ESS, buyers get a scalable, high-performance battery at the best price per kWh on the market, maximizing both incentives and ROI.
|
Item |
Cost (USD) |
|---|---|
|
Solar panels (10 kW @ $1/W) |
$10,000 |
|
2 x HELIOS ESS (32 kWh @ $225/kWh) |
$7,200 |
|
Inverter, wiring, and peripheral equipment |
$8,000 |
|
Installation & labor |
$7,000 |
|
Gross system cost |
$32,200 |
|
Federal ITC (30%) expires 12/2025 |
-$15,000 |
|
Local rebates (varies depending on region) |
-$5,000 |
|
Net cost to owner |
$12,200 |
NOTE: If the cost of electricity in your area is $2000 per year, the system pays for itself in about 6 years.
Most people do not have the cash to purchase their solar + storage system. They will take out a loan to finance the purchase. Financing will give you all the benefits of buying, but it will add an extra cost to fund the loan.
|
Item |
Cost (USD) |
|---|---|
|
Solar panels (10 kW @ $1/W) |
$10,000 |
|
2 x HELIOS ESS (32 kWh @ $225/kWh) |
$7,200 |
|
Inverter, wiring, and peripheral equipment |
$8,000 |
|
Installation & labor |
$7,000 |
|
Gross system cost |
$32,200 |
|
Federal ITC (30%) expires 12/2025 |
-$15,000 |
|
Local rebates (varies depending on region) |
-$5,000 |
|
Loan Amount |
$12,200 |
|
Financing Cost (8%) |
$2,652 |
|
Monthly Payment (4 years) |
$310 |
|
Net cost to owner |
$14,852 |
NOTE: If the cost of electricity in your area is $2,000 per year, the system pays for itself in about 7.5 years.
Leasing eliminates upfront costs. You pay a fixed monthly fee while the leasing company owns the system, collects incentives, and maintains it. You benefit from bill savings, but without ownership, the leased solar + storage will provide zero, or even negative, resale value.
|
Item |
Cost (USD) |
|---|---|
|
Upfront payment |
$0 – $1,000 |
|
Monthly lease payment |
$250 – $300 |
|
Lease term |
20 years |
|
Annual cost ($250 × 12) |
$3,000 |
|
Total lease payments |
$60,000 |
|
Ownership at end of term |
No (option to renew or buy at fair market value) |
NOTE:
The following table lists the pros and cons between purchasing, financing, and leasing your solar + storage system.
|
Category |
Buying System with HELIOS ESS |
Financing System with HELIOS ESS |
Leasing System (any equipment) |
|
Electric bill savings |
PRO |
PRO |
PRO |
|
Rebates & incentives |
PRO |
PRO |
CON |
|
Financing cost |
PRO |
CON |
CON |
|
Maintenance |
CON |
CON |
PRO |
|
Resale value |
PRO |
PRO |
CON |
|
System ownership |
PRO |
PRO |
CON |
|
Metric |
Buying System |
Financing System |
Leasing System |
|
S |
$12,200 |
14,852 |
$60,000 |
|
Total bill savings (20 yrs) |
$40,000 (2,000/yr) |
$40,000 (2,000/yr) | $40,000 (2,000/yr) |
|
Rebates & ITC benefit |
$20,000 |
$20,000 |
$0 |
|
Maintenance (20 yrs) |
($6,000) |
($6,000) |
$0 |
|
Net 20-year |
$21,800 |
$19,148 |
($20,000) |
Over a period of 20 years, leasing the system costs much more than the savings you can achieve on your utility bill.
If you buy or finance the system, with rebates and utility bill savings, the system pays for itself within 6 to 8 years and nets you $20,000 in the long run.
By purchasing your solar + storage system, you have a choice on what equipment to install. You don’t have to accept any system; you can ask to use the HELIOS ESS.
Discover’s HELIOS ESS isn’t just another battery—it’s engineered for value and performance:
Buying a HELIOS ESS system is the clear choice when you combine these advantages.
Leasing may sound appealing because it reduces upfront costs, but dollar for dollar, it leaves you paying significantly more over time with nothing to show for it. Buying a solar + storage system based around Discover’s HELIOS ESS ensures you get every incentive, maximize long-term savings, and add real value to your property.
If you’re serious about energy independence and financial return, buying a HELIOS ESS solar + storage system is the smarter investment.
For more information on the HELIOS ESS, click here.