Solar + Storage: Update

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Battery storage is the name of the game in 2016. Will the solar dream of “cutting the cord” become a reality?

In a January 2016 article entitled Solar Trends to Watch in 2016: The Good, The Bad and the Ugly, I predicted that “Residential battery storage will not be ready for prime time in 2016. After the Tesla PowerWall hype, it’s going to take a few more years to become reality. Expect a lot of smoke this year- and hopefully we’ll see fire in 2017.” Six months into 2016, let’s take a look at where the energy storage market headed. Will we see batteries hit the mainstream by the end of the year?

A recent report from the Clean Energy Group, based in Montpelier, Vermont, looks at the possible impacts of battery storage on energy bill reduction in multi-family rental housing in California.  The report states that; “Battery storage systems not only provide economic returns today, they can also preserve the value of solar in an evolving policy and regulatory environment. Because batteries empower owners of solar photovoltaics (PV) systems to take control of the energy they produce and when they consume it, storage can deliver deeper cost reductions that can be shared among affordable housing owners, developers, and tenants.”

The major findings of the study are the following:

    • Adding battery storage to an affordable rental housing solar installation in California can eliminate demand charges for building electricity loads, resulting in a net electricity bill of essentially zero.
    • Adding battery storage to California affordable rental housing can almost double the building electricity bill savings achieved over the savings realized through solar alone.
    • Adding battery storage can achieve incremental utility bill savings similar to solar for about a third of the cost of the solar system for owners of affordable rental housing properties in California.
    • Solar+storage projects result in a significantly shorter payback period than stand-alone solar projects.

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    However, Jessica Lovering, director of energy at the Breakthrough Institute, thinks the authors of the report are too optimistic about the current state of battery storage. Lovering told the San Diego Union Tribune; “In theory this looks like it would save money and would help make your solar system more economic for affordable housing but the battery technology isn’t there yet, especially not at a cost that would make sense for low-income housing.”

    Elon Musk, CEO of Tesla Motors, sides with the Clean Energy Group when it comes to being optimistic about energy storage. Musk believes electricity storage will be a faster growing business than selling cars for his company. “No one is really doing it right,” said Musk about battery storage. “[Tesla’s] Powerpacks can scale on a global basis faster than the cars do. … I think the rate of growth will be several times that of the car side of Tesla.”

    Are Musk and Clean Energy Group a little too optimistic about the state of solar + storage? Beyond the hype, where exactly are we when it comes to battery tech?

    Besides Tesla, the big players in the battery storage space right now are Bosch and Sonnen, both German manufacturers. GE Ventures recently purchased a minority stake in Sonnen, reflecting the global interest in battery storage. With feed-in tariffs being phased out in much of Europe, battery storage may grow more than five-fold by 2020, to at least 170,000 from 30,000 last year, according to the German Energy Storage Association. With Lithium storage prices dropping and demand rising, indications are that storage is on track to pop in the next few years.1_Ameresco-Solar

    Not only storage pioneers like Musk are thinking about the implications of batteries, however, and not all of those considering batteries are entirely enthusiastic. According to Energy Wire; “Local utilities’ distributed resources, particularly customer-owned solar and storage facilities, may become large enough before long to pose potential threats to the interstate grid. Disruptions in cities or small towns — whether they’re accidental or intentional — could move upstream to the wider grid, said participants at a daylong grid security conference at the Federal Energy Regulatory Commission headquarters.

    “There needs to be a lot of work done on distributed resources and how they are effectively integrated into the grid,” said FERC Chairman Norman Bay.” In fact, utilities painted storage as a major threat to grid reliability, along with hackers and terrorism. For the utility industry, which has had every opportunity to integrate solar into their business model, it sounds a bit like the boy who cried wolf.

    Meanwhile, battery storage is advancing, in spite of utility industry complaining and foot-dragging. Industry, businesses and institutions in the US are the first wave to see the benefits of battery storage. One example is an Iowa college that has been at loggerheads with its utility over interconnecting renewable energy projects may find it more economical to go it alone with energy storage.

    An analysis done by the National Renewable Energy Laboratory concluded that Luther College could save approximately $25,000 in energy costs for each of the next 25 years if it installs a 1.5 MW solar array and a 393 kW battery.

    With these examples becoming increasingly common, battery storage may advance ahead of my January predictions.

     

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