Setting the Record Straight

By now you have surely heard plenty about the rare winter storm that impacted Texas a few weeks ago, leading to an unprecedented statewide power failure that left millions of residents without power; for days on end in some cases. The death toll from the storm will take months to fully tabulate, but it will surely reach into the hundreds. The widespread property damage associated with the storm and its aftermath will likely make it the most costly winter weather event in state history.

Unfortunately, there has been no shortage of misinformation about the role that the state’s renewable energy sector played in the power grid failure. The much-maligned Electric Reliability Council of Texas (ERCOT), which oversees the overwhelming majority of the state’s energy grid, has been clear in pointing out that frozen wind turbines and iced over solar panels played a negligible role in the grid’s failure. Dan Woodfin, Senior Director for ERCOT, specifically stated that frozen wind turbines were “the least significant factor in the blackouts.”

Photo Source: Pipeline Technology Journal

Instead, frozen natural gas pipes and a lack of standby reserves brought the grid to its knees. Frozen instruments at coal and nuclear facilities further compounded the state’s problems. Natural gas, coal, and nuclear fuel sources comprise well over 2/3’s of the state’s fuel mix. It is not hard to conclude that the Lone Star state’s heavy reliance on fossil fuels, coupled with the lack of adequate winter weatherization at its fossil fuels production facilities, are ultimately what did the state in.

Financial Incentives Point to Solar Boon in Texas

We have covered in previous articles Texas’ position as a state that is ripe for rapid near-term growth in solar energy generating capacity. That likelihood is now perhaps doubly true as the need for the state to diversify its energy generating capabilities has perhaps never been more obvious. Even before the latest Texas energy crisis, the state was planning for a significant addition of solar capacity to the grid in just the next couple of years.  From S&P Global Market Intelligence,

“Between 2021 and 2023, developers plan to add roughly 35 GW of combined solar and wind capacity to the state’s primary transmission system, operated by the Electric Reliability Council Of Texas Inc., according to the grid operator’s most recent data.”

Texas is second only to solar behemoth California in both cumulative installed solar capacity and total households with residential solar energy systems. Yet on a per capita basis residential solar adoption in state remains miniscule as the 783,000+ households with solar comprise less than 1% of the total households in the state, underscoring the industry’s massive growth potential. Texas’ deregulated energy market had long kept utility prices low for the typical user, thus not creating the cost incentive to switch to solar that is present in many other states. We now of course know the long-term peril of relying so heavily on such a system.

The financial incentives in Texas are changing in real time, however.

Some households in Texas were hit by energy bills that were some 10,000% higher than their typical bills. One such customer, a 70-year-old living off Social Security, had to deplete his modest savings to pay off a $16,752 (!!!) energy bill. This particular gentleman, and others hit with outrageous bills, were customers of Griddy, a small company in Houston that provides electricity at wholesale prices. As the typical supply and demand dynamics went haywire in the midst of the energy crisis, so too did the wholesale energy market which is especially vulnerable to even modest fluctuations in supply and demand.

Photo Source: The Conversation

The savings account-busting energy bills that many Texans were recently faced with may just be the tip of the iceberg. Make no mistake about it, the government of Texas whether they want to admit it or not will need to spend billions of dollars in modernizing their grid infrastructure and protecting against future weather-induced catastrophes. Keep in mind that such weather events are forecasted to become more unpredictable and impactful as the consequences of climate change become more acute.

There is now political pressure on elected officials from both parties in Texas to bless significant expenditures in infrastructure maintenance and improvements. The cost will of course ultimately be passed on to customers in the form of higher utility bills. If you are a Texas resident looking for a sign to take the leap and embrace a residential solar energy system, then this is it.

Weather Disasters Spur Greater Solar Adoption

Crises have a way of being especially clarifying for those impacted the most by them. This dynamic is perhaps most true when it comes to people who have been severely impacted by natural disasters. Let’s face it, losing your beachside house in a hurricane doesn’t exactly inspire most to rebuild and give it another try.

The notion that the recent debacle in Texas could result in a flood of new interest in solar energy is not without recent precedent.

California’s issues with recurring raging wildfires are a prime example of the incompatibility of pre-21^st Century energy infrastructure and weather events that are increasingly volatile and without precedent. Recall that California’s largest utility, PG&E, was forced to intentionally cut off power for millions of customers in 2019 as a preventative measure in order to limit wildfire outbreaks. PG&E Chief Executive, Bill Johnson, confessed that it could take a decade for the company to improve its electrical system enough so that it doesn’t have to resort to customer blackouts as a wildfire risk mitigation strategy.

Photo Source: Las Vegas Review Journal

In the wake of its high-profile struggles battling widespread wildfires, California has seen renewed interest in solar-plus-storage energy systems as homeowners seek to reduce reliance on an increasingly unreliable energy grid. State incentives geared towards making solar batteries more affordable for consumers have helped to fuel the transition. The result has been clear. According to a July 2020 article by Scientific American, 174 permits for energy storage projects were issued in the front half of 2020 in Sonoma County, eclipsing the total number issued in all of 2019 (161). Marin County, CA issued 763 solar permits in the 12-month period ending on June 30, 2020, an increase of 136% from the previous year.

The story was similar in Puerto Rico. After the island’s national energy grid was ravaged by Hurricane Maria in 2018, record numbers of the country’s residents installed home battery systems.

No energy source is 100% foolproof, but the events that recently transpired in Texas are a stark reminder of how vulnerable fossil fuel-dependent energy grids are to potent weather storms. Texans used to cite their prowess in the crude oil and natural gas markets as an example of “energy independence.” Such an assertion now comes across as pretty tone deaf. If there is any good to come from Texas’ recent misfortunes it is that these events are sure to hasten the state’s march towards a more renewables-focused future, and maybe then the state’s promise of energy independence can ring true.

Cover Photo Source: The Verge

The post Hopes for Solar Spring Anew in Texas Following Energy Grid Debacle appeared first on Solar Tribune.

Panel Prices Slashed

Tesla got into the rooftop solar installation business in earnest back in 2016 through its acquisition of SolarCity, and today, Tesla ranks 3^rd among national residential solar installers. However, the #1 ranked residential solar installer, Sunrun, recently announced plans to acquire the industry’s #2 ranked residential installer, Vivint. The move will effectively make the combined company and Tesla the top two residential solar installers in the country. The latest move in the solar arms race is likely to spur more competitive pricing for the average consumer as the two companies jockey for market share.

Even before the Sunrun-Vivint news broke, Tesla was making headway on reducing pricing for its solar panels. In a blog post from last month, Tesla announced their plans to cut the price of their solar panels so that they will be lower than the average industry price by about one-third. This comes on the heels of Tesla improving the efficiency of their solar panels by 10%, which is nothing to sneeze at.

Tesla’s reduced solar offerings are categorized by system size with the smallest 4.1 kW system running at just $7,400 after accounting for federal tax incentives.

Photo Source: Tesla

Tesla credits its solar panel price cut to a revamped ordering approach that shifts the process entirely to an online shopping format. This significantly reduces sales and marketing costs for the company and greatly eases the buying process for the consumer – a win-win for everyone. Tesla explains on their blog post:

“Our new pricing is made possible by several simple improvements to a decades-old industry. We made ordering and installing solar easy by moving to fixed sizes that customers can order with a single click online — no more need to spend hours in consultations reviewing old utility bills. More than 80% of our customers move forward with the standard size recommended by our website, and the move to a digital experience helped cut our sales and marketing costs by 64%.”

Photo Source: Tesla (screenshot of homepage)

Tesla also announced this month that their solar referral program will be getting more lucrative for the consumer. Improving the solar referral program seems to be something of a 2020 priority for Tesla. In January, the solar referral was improved to $250 for both the referrer and the new buyer, after previously being a $100 benefit. This month, Tesla announced that customers will receive $400 for each solar referral, and receive one Powerwall battery after successfully referring at least 10 new solar customers.

Solar Sales Slump Amid Pandemic

It is hard to know if Tesla’s recent push to revamp their solar pricing model and provide other inducements for customers is part of a long-planned strategy or an effort to get ahead of the pandemic-related downturn (I suspect the latter). Regardless, the company’s recent Q2 earnings report underscores just how tough 2020 is likely going to be for Tesla and other solar installers.

Tesla reported that rooftop solar installations declined by 7% year-over-year in Q2 2020. This is a somewhat significant drop in business given the fact that the Q2 2019 solar deployment figure of 29 MW was previously the company’s lowest quarter on record.

Image Source: Generated by Solar Tribune using Tesla Q2 earnings report data

The dip in solar deployment is obviously due to restrictions brought on by pandemic-induced shutdown orders from earlier this year. A noteworthy silver lining to the dip in residential solar deployment for Tesla is the fact that installations of Tesla’s niche Solar Roof product tripled from Q1 to Q2 in 2020. This growth is both a byproduct of increased consumer demand – thanks to a more optimized and affordable product – and the company’s increased production capacity. The New York Gigafactory where Solar Roof product is produced hit the pivotal 1,000 unit per week production mark back in March.

Congratulations Giga NY team!

— Elon Musk (@elonmusk) March 15, 2020

In many respects, Tesla is probably the best positioned company in the solar industry to adapt to an environment where traditional in-person solar sales are going by the wayside. While most other solar installers are scrambling to embrace an online-focused sales model, Tesla has been operating that way for some time now. It is possible that Tesla’s Q2 2020 showing – while its worst ever – will pale in comparison to what other major solar installers report for the quarter. Earnings for Sunrun and Vivint – to be revealed in coming weeks – will surely be watched closely.

Vehicle Sales Weather the Storm

On the vehicle front, the storyline was quite different. Tesla reported on their Q2 earnings report that they were able to see positive year-over-year growth in vehicle deliveries (Jan-May), all while the industry as a whole was down 30%. Tesla was the outlier in the industry, as the world’s other major automotive companies saw steep declines in vehicle production since the beginning of the year.

Photo Source: Tesla

Tesla’s ability to deliver over 90,000 vehicles in Q2 2020 is somewhat miraculous given that the company’s main facility in Fremont, CA was closed for nearly half of the quarter. The company is still committed to its pre-pandemic promise of delivering 500,000 electric vehicles to customers this year. To-date, they’ve delivered just under 180,000.

Company CEO, Elon Musk, is bullish on all things Tesla, so delivering 300,000 electric vehicles in just over 5 months is a tall order that he is happen to take on. In another sign of not letting current economic headwinds derail long-term goals, Musk and Tesla unveiled one of its most pivotal facility investments to-date when they recently announced plans to build a new Gigafactory near Austin, Texas. The new facility will span 4-5 million square feet and be tasked with producing the Cybertruck, as well as the Model 3 and Model Y for eastern U.S. deliveries.

The planned Austin facility joins a growing portfolio of auto parts facilities in the U.S., Europe, and China that are steadily enabling Tesla to achieve the economies of scale required for more efficient delivery of electric vehicles to all corners of the world.

Solar Storage Shows Promise

Musk’s dream for Tesla is and always has been to grow the company into a clean energy behemoth that is appropriately diversified across the electric vehicle, solar panel, and solar storage sectors. Even in the midst of an unprecedented global economic slowdown, the realization of that vision continues to show signs of progress. The positive momentum that Tesla is building with energy storage is perhaps the clearest indicator.

In their Q2 2020 earnings report, Tesla reported that total battery storage deployed in the quarter totaled 419 MWh, a 1% year-over-year increase and a significant 61.2% from the first quarter of the year.

Image Source: Generated by Solar Tribune using Tesla Q2 earnings report data

Of particular note is the fact that Tesla’s largest energy storage solution, Megapack, turned a quarterly profit for the first time after just being launched to market last year. The Megapack is capable of storing up to 3 MWh of electricity and is designed to be used by utility companies to supply the grid during periods of peak demand.

Photo Source: Tesla

Construction began just this month on a massive Tesla Megapack installation project in Monterey County, California for the state’s most prominent utility, Pacific Gas & Electric (PG&E). The Moss Landing project consists of a total of 256 Megapack battery units that will collectively comprise a 182.5 MW/730 MWh energy storage system. PG&E and Tesla also have a contract in place for a subsequent 300 MW system to be built at a later date at the same location.

Once the Moss Landing Megapack project is completed, Tesla will lay claim to having the two largest lithium-ion storage projects in the world using their batteries, with the highly-acclaimed Hornsdale Power Reserve in Southern Australia finished earlier this year being the other.

Tesla’s naysayers like to discredit the company by referring to the company as “just” an automotive company. Musk has made it clear, however, that he is not content on building a global electric vehicle giant that just dabbles in solar panels and batteries. He is thoroughly committed to all three pillars that will stand up a more sustainable future for the world – electric vehicles, solar panels, and solar storage. On the Q2 earnings call, Musk reiterated this commitment stating that Tesla Energy will one day be just as big as the Tesla Auto division. When you consider that the Tesla Energy division currently has about one-tenth the of the revenues of its sister division, you begin to see the immense growth potential in company valuation and in global influence as Tesla helps to fuel a more rapid adoption of sustainable energy practices.

In sum, Tesla’s performance as a company through one of the most tumultuous economic periods in modern history is just another reminder that those who bet against Tesla do so at their own peril.

Cover Photo Source: Fortune.com

The post Tesla Staying the Course appeared first on Solar Tribune.

With marijuana now legal in 30 states (either for recreational or medicinal use), the cannabis industry is big business. Since legal sales first began in 2014, the industry has exploded. In 2018, it raked in $10.4 billion and experts expect it to grow 14% annually over the next few years.

Most legal marijuana is grown in indoor operations where all light, air, and moisture is completely controlled – an energy-intensive endeavor. And as the industry grows and more competitors enter the market, growers are looking to solar and batteries to cut high energy costs that plague grow operations.

Energy use will become a major issue as industry grows

In 2012, Washington and Colorado became the first two states to legalize cannabis for recreational use and now, recreational use is legal in ten states. Last year, the industry was worth $10.4 billion, with even more growth expected in 2019. By 2025, it’s set to increase to $23 billion – an annual growth rate of over 14%.

As mentioned, most of this legal cannabis is grown in indoor operations, which can produce the highest quality product, but is also the most energy intensive. As the industry grows, so will energy use.

Image Source: Graph from Solar Tribune, Data from New Frontier Data

New Frontier Data estimates that electricity use will jump from 1.75 million MWh in 2019 to 2.79 million MWh in 2022. The City of Denver, the hotspot for growing in Colorado, estimates that 45% of their electricity load (or ‘demand’) growth will come from marijuana grow operations. Even now, Denver estimates that marijuana accounts for almost 4% of the city’s total electricity consumption.

Lighting, ventilation are biggest energy hogs

The energy needs to cultivate marijuana indoors are truly astounding. As part of a 2018 report from The Cannabis Conservancy, researchers collected energy consumption rates from a handful of indoor grow operations around Colorado, who reported using about 1,200 kilowatt-hours of energy per pound of marijuana produced. In comparison, the average home in the U.S. uses about 900 kWh every month. Aluminum production needs just 7 kWh per pound produced – that’s about 0.5% of marijuana’s energy needs.

On the national level, legal cannabis cultivation consumed 1.1 million megawatt-hours of electricity in 2017, according to New Frontier Data’s 2018 Cannabis Energy Report. For comparison, that’s about as much energy as 102,000 of those average homes above in an entire year. And it’s not getting any smaller: New Frontier estimates electricity consumption from the cannabis sector to increase 162% from 2017 to 2022.

Energy expenses account for up to 50% of total wholesale costs and cultivators name energy as the second highest cost, behind labor.

Of course, marijuana and energy use didn’t always go hand-in-hand. Historically, most cannabis was simply grown outdoors. However, when the U.S. criminalized marijuana in the 1970s, cultivators moved indoors to avoid detection. Today, the majority of legal cultivators continue to grow plants inside, as it’s a more controlled environment. They’re able to increase harvests, produce higher quality product, and avoid issues like insects and disease – common challenges when growing outdoors.

Image Source: Graph from Solar Tribune, Data from E Source

With energy costs making up such a large portion of the wholesale price of cannabis, tackling inefficiencies in lighting, ventilation, and cooling can mean huge savings for growers. Grow operations need huge expanses of lighting, and it’s the single biggest energy user for indoor facilities, accounting for about 40% of total electricity use. Ventilation and dehumidification together account for about 30% of energy use and air conditioners come in 3^rd. Tackling any one of these issues can mean huge savings on utility bills.

Solar and batteries seen as a solution

As the cannabis market continues to mature, competition is growing. When legal sales in Colorado first began in 2014, prices hovered around $2,500 per pound. By 2018, that price had dropped to $850/pound. To stay competitive, growers are looking to drop prices by lowering energy costs via energy efficiency upgrades, solar, and batteries.

While not as attention-grabbing as solar and batteries, simple lighting upgrades are the lowest hanging fruit for energy savings. Most indoor cultivators use high-pressure sodium lights (the lights giving off yellowish haze on city streets) in indoor grow ops, but they’re very energy intensive. By simply replacing HPS lights with LEDs, growers can not only save on lighting costs, but they’re also able to cut ventilation and cooling, as LEDs produce far less heat than HPS bulbs. By installing LEDs and more efficient HVAC systems, grow operations can shave off up to 35% of their total energy use.

Efficiency upgrades like these can only do so much and marijuana cultivation still requires huge amounts of electricity. The next logical step, of course, would be renewable energy. However, with energy use so high, many commercial buildings simply don’t have the roof space to house enough solar panels to really make a dent in energy use. Few cultivators could cover 100% of their energy use purely through a rooftop solar installation.

However, by combining solar with batteries, grow operations are able to utilize on-site solar generation at strategic times, during times of peak demand when electricity rates are highest, for example, or to help lower demand charges. With grow operations typically running 24/7, avoiding daily on-peak pricing and lowering demand charges (which are utility fees based on your highest energy usage at any one point of time during a billing cycle) can reap major savings.

In 2017, for example, California-based grower Green Dragon worked with micro-grid company CleanSpark to drop its spiraling energy use. By combining solar, energy storage, and energy management, Green Dragon was able to cut its electricity bill by an astounding 82%. CleanSpark notes that, via its mPulse software, which helps businesses avoid expensive demand charges on utility bills, Green Dragon was able to drastically reduce its demand charges, which had previously accounted for close to 50% of its monthly electricity bill. It estimates that, by adopting the micro-grid, it will increase revenue by $660,000.

As legal cannabis production continues to spread and mature, the industry will undoubtedly work out best practices to minimize energy use and production costs. Proper lighting, ventilation, and AC design and installation will allow grow operations to drop energy use as much as possible from the get-go. And as solar and batteries continue to drop in price, we can expect cannabis cultivators – as well as other industries – to continue adoption.

Image Source: CC license via Flickr

The post Cannabis Growers Embracing Solar and Storage to Cut Energy Bills appeared first on Solar Tribune.

Researchers from MIT  shared their vision for the Utility of the Future, where a decentralized, “self healing” grid would replace the heap of old wires we have today. New business models would materialize if only regulators would accept total market transformation. These pronouncements fill the pages of Wired Magazine and give us something to chat about at cocktail parties, while the real future is quietly unfolding right under our noses in Colorado.

MIT’s Utility of the Future study, published in December 2016.

Tucked away in unexceptional office buildings and dated municipalities, Xcel Energy, a legacy utility with a boring dress code and a century old business model, is working alongside policy makers, public utility commissioners, and engaged stakeholders, to transform the State’s power grid. In an effort similar to Germany’s Energiewende, Colorado is on track to meet 55% of its electricity supply with renewable energy by 2026, and reduce CO₂ emissions by 60% below 2005 levels over the same period.  They are pulling this off without significant rate hikes to consumers or disruptions to reliability. This energy transition is challenging long standing assumptions on the economics and technical feasibility of a carbon free grid. Where it is headed offers a far more tangible carbon free energy future than any proclamation has yet offered.

Background on Colorado’s Energy Transition

Xcel Energy’s commitment to energy transition was not a unilateral proclamation. It came about as a response to customer demand. In 2011, residents of the City of Boulder voted in favor of a ballot to divorce itself from Xcel Energy and establish its own municipal utility. As one ballot supporter stated, “They [Xcel] don’t have our interests at heart,” referring to the portfolio of coal assets that Xcel continued to operate, and that comprised 57% of it’s portfolio at the time. This initiated a 6-year process of joint working-groups and often adversarial negotiations. Among the issues that needed to be resolved was the transfer of assets from Xcel to Boulder.

Throughout the rounds of negotiations, public hearings, PUC filings and even a lawsuit that proceed, the City of Boulder offered Xcel several opportunities to “partner” with the city, including asking that Xcel reduce the price of wind power for Boulder customers and remove a cap on wind generated south of Boulder.

Part of Xcel’s Cherokee Generating Station is a 928 MW Coal Plant outside of Denver.

Under the specter of more customers following Boulder’s lead, Xcel Energy submitted a new Electricity Resource Plan (EPC) in 2016, changing its posture, and adopting a commitment to “better serve our customers across the state…” by “keeping your energy costs low” and to “deliver increasingly cleaner energy…” In August 2016, CPUC approved a series of filings whereby Xcel would move forward with programs that offered customers greater resource diversity and access to renewables, while removing the transmission premiums that it had levied on renewable power. This met more customer demand for renewables, and it established conditions that would make municipalization an even less feasible option for customers seeking affordable, clean energy.

In 2017 Xcel unveiled its proposed Colorado Energy Plan (CEP), laying out a more defined roadmap to meet rising energy demand with more renewable energy and lower carbon emissions, at rates that still undercut the national average. Xcel laid identified three clear goals: 1) increase total production to meet growing demand; 2) meet 55% of its total supply with renewable energy by 2026; 3) reduce emissions to 60% below 2005 levels, also by 2026. To get there, Xcel plans on cutting its coal power supply by 30% and reducing 50% of it’s natural gas generation. As a first step, the CEP requested approval to retire place 700 MW of coal powered generation in early retirement, and replace that capacity with wind and solar power. As additional coal plant move to retirement beyond 2026, Xcel believes that it will be on the road to achieve a zero carbon portfolio.

Source: Western Resource Advocates

In early 2018, Xcel received 350 proposals for solar and wind projects, many of which included energy storage. The median prices offered for wind, solar, and combined storage projects all fell sharply below the lowest documented prices previously offered anywhere else in the US, and they significantly undercut coal and natural gas.

This past August, CPUC gave final approval for Xcel’s CEP. In moving forward with its plan, Xcel will move to invest $2.5 billion to add over 1,100 megawatts of wind generation, more than 700 megawatts of solar generation, and 275 megawatts of battery storage onto Colorado’s grid. Xcel will also retire the Comanche 1 and 2 coal plants, comprising 700 MW of existing capacity, a decade early. Despite this lofty investment, Xcel is promising to save money for the rate payers. The CEP outlines $200 Million in anticipated savings for Colorado ratepayers. Decommissioning coal plants and operating lower cost resources offsets the burden of the associated capital investment. Furthermore, Xcel anticipates that it will drive further savings by avoiding compliance costs for anticipated emissions regulations as it moves to downsize its coal fleet.

Xcel Energy’s phased plan to increase resource diversity and lower carbon in its generation portfolio.

As Xcel Energy takes on bold moves for a regulated utility, Colorado’s biggest cities and counties are upping the ante even higher. At least ten of the state’s most populous and prominent regions have set 100% renewable energy goals, most of which are set to be achieved by 2030, and none of them any later than 2035. As one executive from excel put it, “We will eventually have a zero carbon power grid. Xcel would rather lead in that direction, than get dragged there.” With so much customer demand, Colorado provides a unique foothold for Xcel to assume that leadership.

Turning Customers into Allies and Taking Advantage of the Stakeholder Brain Trust

During the rounds of public hearings and back room meetings between Xcel Energy and the City of Boulder, the latter gained volunteer support from a team of experts, including researchers from National Renewable Energy Laboratory (NREL) and University of Colorado. These experts assisted Boulder in assessing the cost and technical feasibility of various generation portfolios. The team, referred to as “RenewablesYES!”, provided Boulder with a roadmap to double its renewable energy supply, halve its carbon intensity and “greatly reduce other forms of fossil fuel-related pollution at rates that would meet or beat Xcel’s.”

Through ongoing rounds of negotiation, public hearings, a lawsuit, and PUC filings, citizen leadership in the technical review process influenced Xcel’s process of evaluating its own portfolio. This helped Xcel fuel its own effort to devise a more ambitious renewable energy roadmap, and likely contributed to the partnerships that it formed with renewable energy and environmental advocacy groups. These many of these groups aided Xcel in formulating the CEP, and that have been strong supporters of Xcel’s efforts in front of CPUC.

Xcel intelligently turned its proceedings with Boulder into an opportunity to draw a new relationship with the stakeholder groups that would be difficult opposition if they were not key allies. In its 2017 CEP filing, Xcel listed numerous renewable energy coalitions, consumer advocacy groupd, and even energy think tanks that participated in the plan formulation. The Western Resources Advocates was one of the major partners.

Cities and counties across Colorado are seeking to go 100% renewable.

Firm Renewable Power Beats Natural Gas

In January 2018, Xcel released the results of the All-Sources-Solicitation that it issued in late 2017. The response was striking. In contrast to the 55 responses that Xcel had received in its 2013 solicitation, this time around 430 bids were submitted, 350 of which were for solar and wind projects comprising 100 GW of total capacity. Over 100 of these proposed renewable projects included battery storage, comprising 27 GW of total capacity. In other words Xcel was looking at 27 GW of firm renewable energy, with the same dispatchability and load control as the traditional fossil fuel resources.

If that is not astounding enough, the game changer was in the costs that were proposed for these projects relative to Colorado’s existing fossil fuel resources. The median price offered for Solar + Storage came out to $36/MWh while Wind + Storage was offered at a median cost of $21.50/MWh. With natural gas selling at $40 – $60/MWh and the state’s coal power supply selling for even higher, Colorado is seeing a new reality unfold where renewable energy, made firm and dispatchable with battery storage, is technically and economically scalable, even in the most competitive power markets.

The Vertically Integrated Utility-of-the-People

Xcel’s guiding principles to working with partners such as municipalities and coops. Xcel has taken a tone that utilities operate best when planning is a multi-lateral activity taking place outside of formal regulatory hearings.

Energy market deregulation was intended to establish competitive markets that would stabilize, if not lower costs for rate-payers, while creating greater transparency. The data on whether or not deregulation helped achieve these goals is inconclusive. Natural gas has been a major factor in driving down the cost of electricity since 2005. The same market construct that enabled the rapid expansion of natural gas generation led to rapid growth in wind and solar power in these markets. That same mechanism, however, limits their continued scalability. As fossil fuels comprise a smaller portion of the resource mix, renewable energy generators must rely more and more on long term power-purchase-agreements to ensure that they will achieve a viable return. But wholesale markets are not going away any time soon, and a 10-year power purchase agreement does not make sense to most customers. The answer to this challenge falls back to benefits of regulation.

These truths lead to difficult questions about the chances of achieving grid transformation in deregulated markets. Colorado would not be on track to deliver on its 2026 goals were it not for the centralization of accountability and oversight that can only be promised by a vertically integrated utility. But owning the entire energy value stream is not enough. The challenges of energy transition require significant changes to the governance and planning culture of most regulated utilities in the US today. Again, Colorado is charging ahead to create this future.

Xcel took many lessons away from its experience with Boulder, and the utility institutionalized the way it works with cities, municipalities, and other governance organizations as a result. As cities like Denver, Longmont, Pueblo and Fort Collins have approved county-wide RPSs of 100% renewable energy by anywhere from 2020 to 2035, Xcel has opted to partner with them in achieving these goals, maintaining its role as their utility. According to Jaren Luner, a public policy analyst at Xcel Energy, when cities approach Xcel with a plan to meet 100% of their demand with renewables, “’No that’s now how it works’ isn’t an answer that is acceptable to our cities. We need to incorporate their goals into our resource planning.”

Why Look to Colorado?

Colorado is not the only state that set ambitious clean energy goals. California and Hawaii have both committed to achieve 100% renewable energy by 2045. They are seeing rapid growth in their renewable portfolios. In both states, however, rate payers are seeing their energy bills escalate to over 50% above the national average. In contrast, Xcel Energy met 28% of its Colorado energy supply with renewables last year. Its customers’ paid energy bills were an average of 33% below the national benchmark. The Colorado Energy Plan estimates that customers will continue to see savings, and by 2030, Colorado rate payers will save as much as $200 million.

An energy transition similar to Colorado, is necessary if we are going to collectively meet the emergent challenges of climate change, resource scarcity and infrastructure vulnerability. On the face of it, the US power grid is a regulatory jungle of balkanized markets and aging infrastructure, making massive transformation almost impossible. At closer look, Colorado may be the oracle that can providing a roadmap for other states to follow. What might that energy future look like?

The post Utility of the Future: Insights from Colorado’s Energy Transition appeared first on Solar Tribune.

The UN  and the World Bank both estimate that 1.1 billion people lack access to electricity. This points to significant progress over the last 2 decades. In 2000, the estimate was 1.7 billion people. However, it has only been in the last few years that real strides have been made towards addressing some of the endemic challenges that are leaving almost 15% of the world’s population in the dark. The rapid maturity of Solar PV technology, advancements in energy storage, and the adoption of new business models are the primary catalysts for recent progress in energy access.

Reliable, Affordable, and Clean Energy for All

Energy access has long been a major development challenge. In 2015, the UN’s 193 member-states ratified the Sustainable Development Goals (SDGs), defining 17 measurable objectives to eradicate poverty by 2030. Goal 7 aims to provide universal access to affordable, reliable, and clean energy. As the International Energy Agency (IEA) stated in its assessment of progress along this goal, “Energy is not only a global goal in its own right but is at the heart of the sustainable development agenda…”

“Goal 7: As Seen Through the Eyes of Children” by Margreet De Heer.

Since 2000, the total number of people living without access to affordable, reliable energy has dropped by 35%. The World Bank reports that since 2012, access to energy has expanded by an average of 118 Million people per year. Over half of that need has been met by off-grid solar (OGS) projects, which have enabled countries to address some of the biggest challenges in supplying reliable energy to remote populations and has been an affordable alternative for impoverished populations. This has fueled massive growth in off-grid solar, with global capacity tripling over the last decade.

These are promising indicators, but the progress is not evenly distributed. Over half of the 1 billion people who lack access to energy live in Sub-Saharan Africa, while the remainder live predominantly in Asia. However, less than 30% of new OGS capacity since 2008 has benefited Africa. Asia, on the other hand claims 67% of new OGS capacity over the same period.

Project Require Strong Fundamentals and Rule of Law

The disparity in new capacity reflects broader regional issues beyond technical project feasibility. In a report on the African energy problem, The Independent pointed to a range of factors from poor management of utilities, to misappropriation of funds and political corruption.

“But it’s also because utilities are vehicles for political patronage and, in some cases, institutionalised theft. US $120m went missing from the Tanzanian state power utility last year though a complex web of off-shore companies.”

The majority of OGS projects over the last decade have resulted from public-private-partnerships (PPP), or multilateral collaborations where, ultimately, a commercial provider takes on the long-term management of decentralized assets. Many of these projects are funded through matching agency funds from international development agencies or NGOs. Under the Power Africa Program, for example, USAID is providing technical assistance to expand energy access in Sub-Saharan Africa, but it will only support initiatives when there is active cooperation and participation from the host country government. Third party implementation partners typically face numerous challenges that USAID is unable to address. Lack of steady Government involvement, weak institutions, and corruption have been major barriers to projects moving beyond exploratory stages.

This 500-watt PV system, installed by SolarNow and financed by Power Africa partner SunFunder, provides clean power for a home, a public broadcasting system, a barbershop and a video hall in a rural village in Uganda. / Sameer Halai, SunFunder

Other OGS projects obtain more traditional development financing from institutions such as the World Bank, regional development banks and the International Finance Corporation (IFC). IFC upholds commercial feasibility standards, like those of a conventional commercial bank, but tailored to the conditions of development projects. In these projects too, host government cooperation is key, and without sufficient regulatory clarity, they lack the assurances that implementation partners need to take on the long-term risks associated with operating distributed generation assets.  As the World Bank stated in an issue brief:

“…the biggest challenges are poor policies, inadequate regulations, lack of planning and institutional support…successful countries have also balanced the objective of the financial viability of electricity suppliers with the need to keep consumer prices affordable…”

Achieving this balance requires the type regulatory clarity and market market reciprocity that can only be achieved through stable institutions of governance.

OGS and the Path Forward to 2030

A range of factors are contributing to the continued rise of decentralize solar PV, and OGS is projected to make up an even larger proportion of new generation projects over the next decade. IEA points to cost as a primary advantage of OGS in closing the energy-poverty gap. The price of solar today is lower than natural gas and coal, making it more affordable than any other generation resource on the market. According to IEA, “To deliver universal energy access by 2030, decentralized options are the least-cost option for 60 per cent of people currently lacking access.”

There is evidence that prices could continue to drop. London based Crown Agents released a report that found that the installed cost of solar plus storage in developing countries may be as much as 80% lower than most project developers are currently estimating on their early stage proformas. One area, where the report noted cost discrepancies, was in the way proformas typically estimate energy storage costs. The cost assumption for energy storage are often still based on outdated lead-acid technology verses the lithium ion batteries that are now the prevalent form of storage. When accounting for lower installation and encasement costs for these batteries, the total cost of storage comes down considerably. Project estimates often use other outdated cost assumptions on panels and balance-of-system components as well, leading to inaccurate phase 1 proformas that render potentially viable projects unfeasible on paper.

Better technology also enables these projects to perform better financially when they are operational. The move towards microinverters enables commercial suppliers to obtain better real time analytics on system performance, minimizing downtime, and maximizing productive return from these projects.

Mobile payment technology, termed Pay-as-you-Go (PAYGO), has enabled a secure and consistent flow of revenue from customers to solar power providers, increasing the the accessibility of these projects for customers. This is particularly relevant in Sub-Saharan Africa where mobile payment has given many customers access to digital currency for the first time. By not having to collect cash payments from customers distributed across large regions, projects cost less to manage and operate. Customers can quickly connect to new systems and access energy, and they have more real time visibility how much they’re consuming through their mobile phone payments. Nearly $800 million has been invested in mobile money systems over the last 6 years. West African markets are seeing significant growth in PAYGO traction, and CGAP estimates that as much as 50% of new accounts in the region (outside of Kenya) are created to pay for electricity. PAYGO may eliminate one of the key challenges to electrifying Sub-Saharan Africa. But without stronger regulatory institutions, it will still be difficult to attract outside partners necessary to build capacity and deliver technology.

President Barak Obama looks at a Pay-as-you-Go solar power exhibit during a 2015 Power Africa Innovation Fair in Kenya. (Credit: AP Images)

The UN’s goal-setting strategy has enabled a multi-lateral suite of players, from Governments and NGOs, to banking institutions to establish a common understanding of the biggest barriers to universal access, and a shared timeline to closing that gap. However, despite current progress, the 2030 goal will not be met if new generation cannot be accelerated further. With many lessons learned under their belts, development agencies and financing arms are getting more rigorous in their vetting standards. For Asia, there is still a tall mountain to climb. Regions such as Myanmar are still in early stages of development and conflict has made it nearly impossible to reach the most remote populations. In Sub-Saharan Africa recent successes in Ethiopia, Zambia, and Ghana may be signs that energy access is accelerating. But the largest populations without access to electricity are those in the areas with the weakest institutions. Off grid solar offers the greatest hope for rapid scalability of access to energy. Technologies such as PAYGO systems enable providers and customers to get around market inefficiencies, and all indications are that these contribute to increased living standards. However, stable institutions are the only mechanism that will convert these short term achievements into long term long term solutions.

Case Studies

The following two case studies provide a glimpse into the factors discussed above. The Paluan project illustrates how lower system costs are leading to rapid acceleration of access in the Philippines. In the case of the Bangladesh Solar-Home-Systems program, this program provides an example of how customer side financing innovations are facilitating major changes.

Paluan, Philippines: Solar-Battery Storage Microgrid

Brownouts are a common occurrence across the Philippines, affecting as much as 70% of the country’s population. Approximately 25% of the population lack access to electricity at all or only have access to sporadic, unreliable supply. To address this issue, and to close key vulnerabilities that the country faces as a result of climate change, President Duterte has been a strong proponent of decentralizing the nation’s energy supply, liberalizing energy markets, and transiting to more sustainable energy sources. His administration has set a goal to end energy-poverty by 2022.

It is against the backdrop of this national agenda, that Solar Philippines, a 4-year old company that has quickly accelerated to become one of the largest solar providers in Southeast Asia, recently completed Southeast Asia’s largest Solar PV – Storage Microgrids.

Last December, Solar Philippines completed construction and began operations on a 2 MW Solar PV facility. Combined with 2 MW of Tesla Power Pack battery storage, and a diesel generator for backup supply, this system has enabled the Paluan to benefit from 24/7 electricity service for this first time. Prior to the launch of this project, Paluan’s 16,000 residents frequently experienced brownouts. Napocor, the national utility, limited supply to 16 hours per day, and prior to 2014, village was served by a regional co-op that delivered 4 hours per day and eventually ceased operations.

Residents from the Town of Paluan hold a banner that reads “No More Brownouts” next to the Solar Philippines 2 MW Solar-Storage facility that serves their town with uninterrupted, affordable power. (Credit: Philstar)

According to the Philippine Star, Solar Philippines has reduced the electricity rate for Paluan residents by 50% and enabled them to eliminate the $550,000/year subsidy that the town previously consumed to afford Napocor’s rates.

This Project’s success has led to follow on projects. In June 2018, Solar Philippines flipped the switch on 3 more solar-storage microgrids serving towns in the province of Masbate. The company’s CEO announced plans to deploy a dozen more microgrids serving 500,000 people, all without taking grant or subsidies.

Bangladesh Solar Home Systems (SHS) Program

Bangladesh has seen the sharpest increase in energy access of any country. With a per capita annual income of $1,010, and 60% of its population living in remote areas or areas that need to be accessed via narrow waterways, Bangladesh has not been able to carve a feasible path to supplying electricity to majority of its citizens. Since 2009, Bangladesh has increased access from less than 50% of its population to 76% at the end of 2016. Almost half of this new generation capacity has been met with Solar Home Systems (SHS), stand-alone, turnkey systems that provide direct power to individual homes and businesses.

In 2002, the national government set a goal to achieve full electrification by 2020. In support of this goal, the Infrastructure Development Company Limited (IDCOL), a state-owned financial institution, launched the SHS program to provide cost-effective electricity to the country’s rural population. With subsidies from several international agencies, the SHS program partnered with Participating Organizations (POs) to reach customers in the country’s most remote regions, sell subsidized SHS to those customers, and enter into payment arrangements with those customers. IDCOL arranged the subsidy structure and provides backing for the credit that the POs extend to customers.

POs are responsible for purchasing the systems directly from suppliers. Because of the strong backing of the Government, suppliers have been accommodating and agreed to differed payment from the POs. While the POs are responsible for upfront costs, the majority of the capital was initially funded through international agency grants managed by IDCOL.

Different financing mechanisms have been used by the POs. Grameen Shakti, the largest PO responsible for 50% of the SHS installations, provided customers with a system ownership structure, rather than a pay-for-service arrangement. Customers were offered microfinancing arrangements, paying 15% up front, and the remaining balance over 12, 24 or 36 months. Average payments are around $17/month which is less than the cost to run a generator, and once the system is all paid off, Grameen Shakti continues to provide annual system checks for free.

The SHS program was just the beginning of Bangladesh’s rapid electrification process. But it illustrates the critical importance of devising financing mechanisms tailored to customers in the developing world, and it shows how strong regulatory institutions with active government involvement attract international development agency funding.

The post Off-Grid Solar and the Path to Universal Access appeared first on Solar Tribune.

In September, Puerto Rico was devastated by Hurricane Maria, one of the most intense tropical storms on record. As of this writing, there are 64 confirmed deaths, over 100 still missing, and FEMA spending has topped $1 Billon. The damage across the island is estimated at over $95 Billion, and in the wake of the storm 3.4 Million people were without electricity. Although 65% of electrical generation has been restored, it is unclear how many people that power is actually reaching, because the power grid on the island was virtually wiped out. More than 140,000 residents have fled the island because of the conditions. Without electricity, proper sanitation and climate control are impossible, and even after the storm itself is long past, death rates on the island are up over 40% on a day-to-day due to the horrible conditions brought on by lack of electricity.

Utility workers from all over the U.S. are aiding in the efforts to get the grid back up and running, but for many parts of Puerto Rico, it may literally be years before life can return to normal. Meanwhile, forward-thinking energy experts are calling for rebuilding the Puerto Rican energy infrastructure with a new, more robust and resilient power transmission network based on distributed solar-powered microgrids. Solar companies from across the globe are rising to the challenge, shipping in solar panels and battery storage equipment and flying in teams of highly-skilled installers to bring emergency facilities back on line while attempts to get the nations antiquated infrastructure back up move as quickly as possible.

Here is a rundown of some of the most significant solar projects taking place on the island, and those that have been announced and are in the works:

German battery giant Sonnen installs microgrids

German battery manufacturer Sonnen and their Puerto Rican installation partner Pura Energia have installed six microgrids and have plans for nine more. The completed projects include:

• Three solar microgrids in La Perla (8kW power / 16kWh capacity), Loiza (4kw / 8kWh) and Morovis (8kW / 16kWh) used to power community washing machines, refrigerators and some basic electrical outlets.
• “Proyecto Apoyo Mutuo Mariana” is a village community center that was converted into a food shelter to feed its residents. The Sonnen eco16 (8kW / 16kWh) works with a solar array to provide refrigeration and meal preparation for up to 500 individuals per day, in addition to clean water storage and basic electricity used to power Wi-Fi communications.
• A Sonnen eco8 (4kW / 8kWh) storage system combined with solar panels provides lights, refrigeration, microwaves and fans for a school that provides psychological services for children with behavioral and developmental disabilities in Aguadilla. The ability to power basic necessities for the school enables it to remain open.
• Two Sonnen eco8 (4kW / 8kWh) systems plus solar are powering refrigerators, lights, cellular router and other power services for a shelter housing 45 residents in an isolated mountain town that will likely be without power for many months.

“The vision of sonnen is aligned with the commitment of Gov. Ricardo Rosello’s administration in rebuilding a solid electrical infrastructure based on different alternative energy sources,” said Manual Laboy, Secretary of Economic Development and Commerce. “We thank sonnen and its local distributor, Pura Energia, for their efforts and commitment to the people of Puerto Rico, and we hope that this will be the beginning of a long-term relationship between Sonnen and Puerto Rico.”

Telsa to power remote island communities

Hospital del Niño is first of many solar+storage projects going live. Grateful to support the recovery of Puerto Rico with @ricardorossello pic.twitter.com/JfAu11UBYg

— Tesla (@Tesla) October 24, 2017

Tesla was one of the first solar companies to hit the ground in Puerto Rico, installing 250kW of solar and for Tesla Powerwalls at  Hospital del Niño, a children’s hospital in San Juan in mid-October.

More recently, the governor of It has now been announced that Tesla will be bringing power to the islands of Vieques and Culebra, just off the coast. The battery systems are being deployed at the Arcadia water pumping station, the Ciudad Dorada elderly community, the Susan Centeno hospital, the Boys and Girls Club of Vieques and the water treatment plant.

Puerto Rico’s governor, Rosselló Nevares, commented on the announcement (via local radio 1320):

“Due to the limited access to the Municipality Islands, and the importance of the sanitary sewer processing systems and their direct relationship with the health and the environment, we understand the need to provide energy options to improve the capacity for recovery after an interruption of the network. These projects are part of the measures we are taking to build a better Puerto Rico after the passage of Hurricane Maria and ensure a reliable service for the benefit of the citizens who reside here.”

Plans are being discussed for having Tesla provide permanent generation solutions in other remote areas.

Roddenberry Foundation funds solar water purification

Photo: Lorenzo Moscia

According to MIT News, the non-profit foundation named for Star Trek creator Gene Roddenberry has funded a recent project by MIT Lincoln Laboratory and Infinitum Humanitarian Systems (IHS) to install a solar-powered water purification system in the Puerto Rican town of Loíza.

The system, powered completely by the sun, now converts 850 gallons of polluted municipal water into safe drinking water each day. Rooftop rain barrels provide a backup water source if municipal water stops flowing. The system is called the Water Aid and Renewable Power (WARP) system and provides water to public taps outside the Boys and Girls Club in Loíza.

Dominion and Strata Solar provide energy “Oases.”

Dominion Energy has announced that the company is shipping donated solar panels to communities in Puerto Rico still lacking power after Hurricane Maria.

The 50 kilowatts of solar panels, donated by Strata Solar, will be installed at schools and churches to serve as temporary “Energy Oases.” They hope to create 15 microgrids that will let community members do laundry and charge devices.

Dominion engineer and Puerto Rico-native Alexandra Garcia was the initial advocate for the project. Dominion says Garcia will leave for Puerto Rico on Thursday for six weeks to help her father — who runs a solar installation company on the island — with the installation and other volunteer efforts.

“To see all this movement from both Dominion and from Strata Solar, who was the one to come forward with the panel donations, is to see a whole level of human kindness,” Garcia told 8News.

AES: Puerto Rico’s energy innovator

Applied Energy Services (AES) is a multi-national energy services company that works around the globe. They also operate a coal-fired power plant and a solar farm in Puerto Rico. Despite the bankrupcy and near complete collapse of the corruption-riddled Puerto Rico Electric Power authority (PREPA) even BEFORE the hurricane, AES has been the sole bright spot in the islands energy industry, providing reliable and reasonably priced power generation and adding solar to the mix of unsustainable energy sources.

Chris Shelton,vice president and chief technology officer of The AES Corporation wrote an editorial addressing Puerto Rico’s energy future recently on thehill.com. He speaks out strongly for the need to move to a network of resilient microgrids as well as building a newer, stronger transmission system as well.

“This combination of technologies would offer Puerto Rico three crucial benefits. It would connect select existing low-cost generation to critical load centers near San Juan on the north side of the country. It would deliver clean energy across more of the day and night. Lastly, neighboring mini-grids would be connected, enabling Puerto Rico’s grid operator to pool resources and restore power faster in a crisis.”

From the Solar Saves Lives website:

In September 2017, Hurricanes Maria and Irma swept across Puerto Rico and the U.S. Virgin Islands, devastating the lives of 3.5 million American citizens. Several weeks after the storms, the islands remain in urgent need of reliable electricity, clean water, and food. Full restoration of the power grid is expected to take months. Remote and rural locations have been hit especially hard.

The American solar industry has a unique and immediate opportunity to help. Solar and solar + storage technologies can help communities restore electricity and provide essential services like lighting, refrigeration, and fresh water. This will help address immediate, short-term needs while building a more resilient electricity grid for the future.

Solar Saves Lives is an initiative led by The Solar Foundation to coordinate the delivery and installation of donated solar equipment to areas in need.

The post Update: Solar Recovery in Puerto Rico appeared first on Solar Tribune.

Primitive Batteries Jumpstart the Solar Movement

The solar revolution got its start in the 1970s when enthusiasts and “off-gridders,” spurred by the energy crises of the day, paired rooftop solar with old-school, lead-acid batteries. This state of affairs continued through the mid-1990s, when the spread of net metering made tying into the grid more attractive.

Lead-acid battery. Photo credit: Shaddack assumed (based on copyright claims). Public domain, via Wikimedia Commons.

Battery Adoption Sputters Amid Net Metering

Net metering appeared on the solar scene in the 1980s. The ability to sell excess energy to the utility solidified the economic case for residential solar but also reduced the need for personal storage. 

• 1980: Utilities in Idaho begin to adopt net metering
• 1981: Utilities in Arizona begin to adopt net metering
• 1983: Minnesota passes the first statewide net metering law
• 1996: California passes its own law creating incentives for grid-tied solar

While the commercialization of lighter, more energy-dense lithium-ion batteries in the early 1990s represented a major advancement in storage, they were still too costly, complex, and impractical for widespread use. The Y2K scare temporarily spiked demand for storage systems, but interest dropped off after the supposed threat had passed. Batteries fell by the wayside as more and more states implemented net metering programs to incentivize solar uptake.

War on Net Metering Revives Interest in Battery Storage

Utilities have begun targeting net metering in recent years, charging that solar customers aren’t paying their fair share to use and maintain grid infrastructure. Some utilities have slapped new fees on solar, while others have sought to eviscerate state net metering programs altogether.

Net Metering Flip-Flops and Uncertainty in Nevada

Nevada is one example. Regulators there issued a decision to phase out net metering and increase fees on solar households in 2015. Following public outcry and legal action, the Public Utilities Commission of Nevada reinstated net metering the following year. Utility company NV Energy is challenging that decision.

Hawaii Halts Net Metering Program

Hawaii has experienced similar roadblocks. Abandoning the grid for solar with storage is a popular option in that state, where the need to import fossil fuels makes traditional energy 2-3 times more expensive. The state’s Public Utilities Commission ruled to close Hawaiian Electric Companies’ net metering program to new participants in 2015, accelerating battery adoption among solar customers.

Without net metering (or with additional fees), the savings from grid-tied solar are often anemic or nonexistent. The solar industry has taken a hit in states where utilities are pushing back against net metering as a result. By allowing solar customers to use their own excess energy instead of feeding it to the grid (and paying the utility for use of the infrastructure), affordable battery storage may salvage rooftop solar in those regions.

Battery Prices in Dramatic Decline

Recent improvements in battery technology have significantly trimmed the cost. Lithium-ion battery prices have fallen by nearly half since 2014 and by 11% from 2015 to 2016, largely due to the growing popularity of electric vehicles.

Musk Debuts the Tesla Powerwall and Powerpack

Storage finally became a reality for residential solar customers when Tesla announced the Powerwall and Powerpack in May 2015. Suddenly, home energy storage was affordable, simple, and sexy. The “star power” of Tesla CEO and serial entrepreneur Elon Musk was also instrumental in catapulting battery backup into the mainstream. The Powerwall sold out through the following year almost immediately. Sunrun, LG, Orison, Sunverge, Mercedes-Benz, German company Sonnen, and a handful of other companies currently offer comparable home battery storage units.

Gigafactories Driving Prices Down

Tesla’s gigafactory in Reno, Nevada—the world’s largest factory building—will been instrumental in scaling the technology and reducing prices further. While the factory only began producing battery cells for Powerwalls and Powerpacks in January 2017, Tesla already has plans to expand the facility. Once the factory is in full swing, Tesla expects production to drive down the per kilowatt hour cost of its battery pack by more than 30 percent.

In Tesla’s investor newsletter, Musk said: “This will allow us to achieve a major reduction in the cost of our battery packs and accelerate the pace of battery innovation. This will also allow us to address the solar power industry’s need for a massive volume of stationary battery packs.”

New Gigafactories on the Horizon

Earlier this year, Tesla said it plans to announce 2-4 new gigafactories in 2017, though it’s unclear whether they’ll produce solar panels, batteries, vehicle components, or a combination of those products to support their business plans. AES Corp. and Altagas Ltd. also opened their own battery factories in southern California in January. Unsurprising, that state is fully embracing battery technology; the government there has mandated that utilities add more than 1.32 gigawatts by 2020.

The well-timed drop in battery prices may be able to compensate for the loss of net metering, at least in part. Today, solar customers in areas fighting net metering can simply install one of several affordable home storage systems to provide their own backup and overnight power, bypassing the utility entirely.

One state is even encouraging residents to add battery storage. In a move to help homeowners cope with high energy costs, Maryland became the first state to pass a tax credit for installing energy storage in April 2017. If other states follow Maryland’s example, positive incentives may speed storage uptake.

The Future of Solar With Battery Storage

While battery storage has come a long way from its modest beginnings, the numbers still don’t add up for many businesses and homeowners. Its time is coming soon, however. The energy storage market will balloon to $250 billion by 2040, Bloomberg New Energy Finance (BNEF) predicts, and battery storage will automatically come with rooftop solar systems by the 2030s. When it does, solar may well become one of the dominant power sources in the global energy mix.

The post The Past and Future of Battery Storage appeared first on Solar Tribune.