Hurricane Maria created immense devastation in Puerto Rico, leaving the island and its people facing a long recovery process. Crucially, its electric grid suffered such widespread damage that, a month after the storm, 75 percent of the island remains without electricity, and it could take up to six months before all the power is restored.

There is little the average resident can do but wait. While thousands of diesel powered generators have been delivered to the island, only the wealthy can afford to purchase and operate them. Fuel is in short supply, and the units are the target of thieves, as they have been in the wake of earlier Caribbean hurricanes.

Regardless of its location, no city is immune from large scale outages like this. In May, a distribution substation caught fire in San Francisco, leaving 90,000 PG&E customers without power for as long as seven hours. (One of those customers was my sons’ elementary school, which was hosting hundreds of elderly visitors for annual Grandparents Day. Without power for the elevators, wheelchair-bound and walker-dependent guests had to be carried on numerous flights of darkened stairs.)

In the midst of these outages, there are pockets of self-created resiliency.

Last year, Fidencio Aldamuy, a customer and solar installer for New Energy Puerto Rico installed solar panels and a 19.4 kWh Sunverge One energy storage system at his home. It replaced a fossil-fuel powered generator for which he would now not be able to obtain fuel. Amazingly, his rooftop solar panels survived the storm, and he has not only been able to maintain power at his home on the island, but also to share that power with a neighbor. Likewise, Tesla Powerwall customers in Florida also report having power following recent hurricanes.

Highly Resilient City of the Future

Imagine what might happen if such distributed power was installed at publicly owned facilities and resources. Every school, every police and fire station, along with critical intersections, could be equipped with an uninterruptable power supply in the form of PV panels and lithium-ion-based energy storage systems. Public spaces, critical street lights and businesses would remain illuminated. These fleets of batteries would be controlled via a virtual network operating center that would ensure the batteries are fully charged during the day and powering critical infrastructure during the night.

This highly resilient city of the future would never need to “refuel” individual generators, field complaints from neighbors about the noisy, fume spewing diesel generators or worry about thieves. When these batteries aren’t providing backup power, they can be aggregated to create a virtual power plant, reduce peak load on the local distribution feeder and provide other grid services. This could provide considerable energy resources for the grid: For example, there are more than 670,000 street lights alone in PG&E’s territory. Add to that traffic signals and public facilities, and there would be millions of distributed units available for highly flexible aggregation.

Electric Utilities and Cities Plan for Storage

Several electric utilities and city planners are already thinking about the important role storage can play in making their cities more energy efficient and resilient to power outages.  A large city in California is actively installing distributed energy storage systems in police and fire stations to provide an uninterrupted power supply during extended outages. The city planners are also exploring the possibility of equipping public restrooms in parks and other common areas with solar and storage to improve safety and the facility’s usefulness during outages.

Hartley Nature Center, which serves more than 25,000 visitors a year, in Duluth, Minnesota, partnered with the Clean Energy Group and Minnesota Power to install a Sunverge One to provide reliable backup power to meet operational needs during power outages. Storing power from the center’s solar panels, this installation—the first of its kind in the state — ensures vital Center operations never miss a beat, even when the grid goes down. The Sunverge One also allows the Center to serve as a community charging resource during times of disaster, keeping citizens connected with the people they need to contact.

Another application for distributed energy storage is gas stations. A large percentage of the 114,000 gas stations in the US have electric fuel pumps, so when the grid goes down, the pumps are inoperable. Earlier this year, the Massachusetts Clean Energy Center (MassCEC) issued a request for ideas to make local gas stations more resilient during grid outages. By outfitting each station with solar and storage, the lights and pumps keep working when the grid goes down. Following Hurricane Sandy in 2012, New York went a step further and now requires gas stations in critical areas to have backup electricity.

Importance of resiliency when 1 in 3 cars is electric

In twenty years, BNEF estimates 54 percent of new car sales and 33 percent of the global car fleet will be electric. While EV sales to 2025 will remain relatively low, BNEF analysts expect an inflection point in adoption between 2025 and 2030 as EVs become economical on an unsubsidized total cost of ownership basis across mass-market vehicle classes. This kind of EV growth could add 11,000 GWh of new load to the US grid according to researchers at the Rocky Mountain Institute (RMI). Reliable backup power will become increasingly critical when our transportation depends on it. Several states are taking advantage of Volkswagen’s $3 billion environmental mitigation trust to build out EV charging infrastructure, including pairing solar and storage on charge stations. The trust, which was created as part of Volkswagen’s settlement with the US government for use of emissions testing defeat devices, is intended to fund State projects that mitigate effects of higher emission levels.

Given the demonstrated lack of resiliency in the grid today, and the inevitability of more and more severe outages, the need to deploy distributed energy resources exists today. As we move into the future, with even more complex energy demands, we’ll need that resilient city of the future.

Sarah Singleton is senior vice president of marketing and regulatory affairs at San Francisco-based Sunverge Energy, a leading provider of software for managing energy storage systems and other distributed energy resources. Sunverge enables homeowners and small businesses to efficiently manage their own renewable energy generation and helps utilities, retailers and solar power providers aggregate those renewable power sources into virtual power plants across neighborhoods, communities and entire service areas.

The post originally published on meetingoftheminds.com, a platform that brings together urban sustainability and technology leaders to share knowledge and build lasting alliances.

Earlier this summer, Rocky Mountain Institute issued a report called Pathways For Innovation: The Role of Pilots and Demonstrations in Reinventing the Utility Business Model. The report outlines five macro themes that are emerging in demonstration projects around the country, as utilities adapt to growing DER penetrations.

As a provider of distributed storage solutions to electric utility companies, Sunverge has worked on demonstration projects with dozens of utilities in Australia, North America, and Japan. In some instances we’ve deployed single units for R&D testing in laboratory environments. In other cases, we’ve helped our partners develop models to scale up battery storage offerings to larger populations with the overarching goals of improving the utility’s relationship with their customer and operating the distributed batteries as a Virtual Power Plant (VPP). With this real-world experience managing distributed storage demonstrations on different grids, under different tariff structures and with different business goals, we’ve gained valuable insight into what leads to a successful distributed storage demonstration.

In short, a successful demonstration project around distributed storage should be designed to achieve three objectives:

  1. Define the customer value proposition(s) for distributed storage.
  2. Define the benefit of distributed storage to the grid.
  3. Define a business model that achieves the mutual benefit between the utility and customer.

This is part 2 of 3 articles that will unpack these topic areas. In part 1, we discussed the customer value proposition. The second area of focus that utilities should tackle in a demonstration is valuing the different services that distributed storage can provide, and mapping out the operational requirements—and constraints—necessary to realize that full value.

There is now mounting, independently verified evidence that the theoretical benefits of distributed energy storage—which are well-understood at this stage in the industry’s maturity—can in fact be realized in practice. In 2016, Sunverge, in partnership with Alectra Utilities, Navigant, the IESO, and others, proved the technical feasibility of a number of different grid services that can be provided by distributed batteries when controlled through software as an aggregate fleet. These services include demand response, frequency regulation, operating reserve, flexible ramping, PV time shifting, peak reduction, and voltage support (Time-Of-Use shifting and backup power were also tested; we covered these in part 1).

The definitions of these services may vary between markets and ISOs, and the unique combination of services that will create value for utilities will vary from one utility service territory to the next. Current ISO market rules allow the participation of DERs in a limited number of instances, although this may change as the Federal Energy Regulatory Commission advances its 2016 NOPR on DERs.

A demonstration project can help a utility to understand which of these value streams can be “stacked” to improve the economics of their storage appliances, given the utility’s own technical and business needs. According to research from the Brattle Group, “accounting for the ‘stacked’ benefits of battery storage by optimizing its dispatch across all analyzed value streams significantly increases the total value of the battery relative to any individual value stream (by a factor of 2x to 3x over individual use cases).”

A few examples help illustrate what this looks like in practice. Xcel Energy focused their demonstration on a single feeder line in a development east of Denver that is hosting a high penetration of rooftop solar. In addition to testing the consumer value proposition, Xcel was interested in investigating how batteries could help mitigate reverse power flow issues that pose a threat to the integrity of equipment further upstream on their distribution grid. The Sunverge batteries address this issue by limiting the export of PV during certain times of the day when the resource would otherwise be feeding onto this equipment.

Demonstrations of storage that target specific areas of a distribution grid in this fashion can help inform distribution planning. They provide real-world evidence to substantiate locational-benefits analyses—which seek to value optimized DERs as an alternative to traditional upgrades—and help inform hosting capacity analyses, which evaluate the extent to which certain nodes of the grid can accommodate the interconnection of distributed generation.

Smaller utilities have found interesting use cases of distributed storage associated with hedging against coincident peak charges from a larger wholesale supplier. Glasgow Electric Plant Board (EPB), for example, signals its VPP of 165 distributed batteries in anticipation of its system coincident peaks—the times of month when its utility system demand is the highest. By lowering these peaks, Glasgow lowers its forward transmission charges from the Tennessee Valley Authority, and passes on those savings to its customers. Glasgow EPB does not pair its storage with solar, highlighting the fact that creative uses of energy storage are often found in unusual places. A fleet of dispatchable resources at customer sites can provide a meaningful safeguard against price or supply volatility in wholesale markets, which smaller utilities may often be subject to. As markets for VPPs mature, actors in organized wholesale electricity markets may use a similar set of tools and dispatch their VPP fleet to offset energy required to be procured in the energy market, either for the day-ahead spot market, hour-ahead market, or real-time market.

Once a utility has identified a handful of use cases that it intends to pursue using distributed batteries, a decision often remains about how best to operate the systems. Though many of Sunverge’s customers begin by controlling their fleets through the Sunverge user interface, many customers intend from the outset to dispatch their fleet through some other type of utility enterprise system. Examples of these include Supervisory Control and Data Acquisition (SCADA) systems, Demand Response Management System (DRMS), or emerging technologies like as Advanced Distribution Management Systems (ADMS) or Distributed Energy Resource Management Systems (DERMS). By aligning the value stream sought in a project to the communication pathway and architecture, utilities can leverage a demonstration to understand how these enterprise systems map to the DER controls performing semi-autonomous actions at each individual customer site, while also gaining visibility into the edges of the grid.

There is no question that customers are adopting DERs en masse: Navigant Research predicts that 288 GW of DER will be installed in the US by 2024, up from 22 GW today. It remains to be seen how utilities will take advantage of these resources. Testing the value through a demonstration project is a good way to find out.

 

 

 

 

 

 

 

 

Earlier this summer, Rocky Mountain Institute issued a report called Pathways For Innovation: The Role of Pilots and Demonstrations in Reinventing the Utility Business Model. The report outlines five macro themes that are emerging in demonstration projects around the country, as utilities adapt to growing DER penetrations.

As a provider of distributed storage solutions to electric utility companies, Sunverge has worked on demonstration projects with dozens of utilities in Australia, North America, and Japan. In some instances we’ve deployed single units for R&D testing in laboratory environments. In other cases, we’ve helped our partners develop models to scale up battery storage offerings to larger populations with the overarching goals of improving the utility’s relationship with their customer and operating the distributed batteries as a Virtual Power Plant. With this real-world experience managing distributed storage demonstrations on different grids, under different tariff structures and with different business goals, we’ve gained valuable insight into what leads to a successful distributed storage demonstration.

In short, a successful demonstration project around distributed storage should be designed to achieve three objectives:

  1. Define the customer value proposition(s) for distributed storage.
  2. Define the benefit of distributed storage to the grid.
  3. Define a business model that achieves the mutual benefit between the utility and customer.

This is part 1 of 3 articles that will unpack these topic areas.

The first, and in our opinion, most critical area of focus for an operational demonstration is the customer experience. This is central to the 21st century utility and the grid of the future, as customers take greater control of their energy generation and consumption. Energy storage, more than any other DER, has the potential to change the way customers participate in the electricity system. It is therefore critical that utilities make the customer experience a central focus of a behind-the-meter storage demonstration.

According to Pew Research, four percent of homeowners in the U.S. have installed solar and 40 percent are considering using rooftop solar. And Deloitte reports that 45 percent of those who don’t have solar panels on their primary residence said they would be more interested in installing solar panels if they could combine them with a home battery storage unit.

For consumers, there are three simple value propositions tied to their battery storage system: energy security, energy independence, and energy savings. Utilities are well positioned to provide these value streams.

Energy Security

Energy security is the idea that customers have stored energy available during grid interruptions; in other words, backup power. As providers of reliability, utilities can and should see a battery backup system as a natural extension of their obligation to provide reliable power. Many customers already pay between $2,000-$6,000 for backup gensets. The challenge for utilities lies in gauging the value of backup power and pricing it appropriately. Lawrence Berkeley National Laboratory provides a good framework for evaluating the cost of outages to residential customers, noting that costs vary by time of day, season, duration, and other factors.

A demonstration provides data that helps inform how different customer segments in a specific utility service territory value backup power. First, utilities can test how to frame different types of customer offerings. For example, the utility may elect to discount the price of the battery backup system to reduce the upfront cost to the customer, require the customer to pay a monthly fee on their bill for the value of backup, or a combination of the two. Second, utilities can gather valuable information about the value of backup during the system installation. Typically, when a battery storage unit is installed, the electrician will install a dedicated “Critical Load Panel” (CLP), which ensures that certain circuits in the home are powered during an outage. Homeowners can exercise choice over which circuits, and which appliances by extension, are connected to the CLP.

Capturing this information not only informs how different customer segments value backup, but also how customers are thinking about their energy consuming appliances more broadly. With visibility into where these customers’ energy storage systems are located on the grid, utilities can marry this customer information with information about outages across their network, and substantiate their methodologies for pricing backup power into their energy storage offerings.

Consider a real world example of good execution in this realm. One of Sunverge’s utility partners, Alectra, decided to market an offering where 50% of each battery was reserved at all times for outage protection, in exchange for the customer’s participation in a Virtual Power Plant (VPP). To sign on, the customer was required to pay an upfront payment plus an ongoing monthly fee that was offset by the bill savings generated by their solar and storage system. Through town-hall style meetings, direct mail, social media, referrals and word of mouth our utility partner was able to fully subscribe their demonstration in 30 days. In the process of choosing customers, the utility partner was extremely thorough in evaluating attributes that may impact the customer experience. Factors like roof-space, internet connection, location relative to specific feeders, and income levels were all taken into consideration when targeting ideal customers for the offering. As a result, they were able to realize shared value.

Energy Independence

Energy independence refers to the desire to take control of or even directly own one’s energy production. This is one of the core elements of the residential rooftop solar pitch. Battery storage is an extension of the same narrative. With storage, homeowners retain more of their day-time solar production for use at night. In areas where exporting solar is discouraged or even prohibited, the objective function of the energy storage system is to maximize solar self consumption. In most areas in North America these conditions don’t yet exist; therefore this argument appeals more to consumer preference than to economic necessity.

The most groundbreaking difference between solar and storage, as opposed to solar-only, is the transformation of distributed solar into an asset that can be used as a VPP to deliver ancillary services to the wholesale market or peak reduction to the distribution grid. (We cover these and other use cases in detail in part 2 of this series). Because utilities are uniquely positioned to unlock this value, they have the ability to turn their solar-plus-storage customers into energy market participants, and ultimately deliver the energy independence narrative to a mass audience. Utility programs can leverage messaging that frames customer participation in DR events as “selling” or “contributing” their own assets to benefit the grid. Demonstration projects provide a unique opportunity for utilities to develop messaging along these lines that is specific to the local regulatory constraints and customer base.

Energy savings are achieved when rate structures incentivize the storage of solar energy for use or export during certain times of day or season. Time of Use Rates, Critical Peak Pricing rates, and residential demand charges all incentivize the strategic use of stored energy to help the customer maximize their consumption offset—and thereby save on their electricity bills—during the expensive time periods. Sunverge’s algorithms are designed to automatically maximize bill savings under such rate structures without compromising customer comfort. While most utilities offer residential time-of-use rates and demand charges, very few customers take advantage of them because they require consequential behavioral changes. This is changing, however. In the aforementioned Deloitte survey, 47 percent of millennials indicated TOU rates are extremely/very motivating, which isn’t surprising considering the popularity of services that use surge pricing, like Uber.

A growing number of utilities are using demonstration projects that leverage distributed storage and other connected DERs to help inform rate design, especially in areas where regulators aim to promote greater adoption of these technologies through price signals. Two of Sunverge’s vertically integrated utility partners are evaluating the impacts of dynamic rates on solar and storage system sizes and customer types.

This type of analysis also helps inform utilities which customers are likely to recognize economic benefits from solar and storage. For example, customers located on constrained areas of the grid will likely recognize more value from their investment in solar plus storage than customers in highly reliable portions of the grid. With this type of information, utilities can develop appropriate assumptions around customer adoption. One of Sunverge’s utility partners used this information to develop a “payback acceptance curve.” The curve estimated solar+storage adoption levels for a given number of “payback” years. Their analysis estimated that if paybacks were as low as 5 years, they could sell their offering to 33% of all technically eligible customers.

One of the keys to success in a demonstration project is setting appropriate expectations for the scale of economic returns that solar and storage can generate for customers. The sobering spoiler here is that economic benefits will vary by customer. As one of our utility partners told us, “expectations need to be tempered, [the offering] may have created too much excitement.” Clear, consistent communication is key.

A positive customer experience will provide a good foothold to evaluate how to operate the customers’ batteries as a VPP, and what ownership options to consider. We cover these areas in more detail in parts two and three of this series.

For years, software has made businesses smarter and more productive. Today, software is making our homes smarter, too: Nearly ten percent of North American households are equipped with some type of “smart home” technology. Last year consumers worldwide spent an estimated $76 billion on smart home hardware, services and installation to make their homes more energy efficient and comfortable.

All those smart refrigerators, water heaters, cooling systems and such can deliver some energy savings and added convenience operating as separate devices. Pair them in a home that also has an intelligent energy storage system, and those benefits can easily multiply.

Most homeowners buy storage systems for the added reliability they provide, supplying instant backup power when grid power goes out. Yet, the software that manages an advanced energy storage system can make the entire home even smarter, more comfortable, and even help toward significantly lowering electric bills.

Here’s how it works. The software estimates a home’s load and solar generation capacity throughout the day, based on historic usage patterns in its memory, along with data gathered in real time from smart devices in the home as well as real-time data about overall demand and strain on the grid. It’s even possible to add weather forecasts to the mix to predict when the skies will be clear and what the outside temperature will be. All this allows the software to predict, with a high degree of accuracy, everything from a home’s expected consumption throughout the day, to how much power will be generated by the solar panels on the roof.

Because it is getting data in real time, the program continuously adapts to respond to variations in predicted load or solar generation. It “learns” as it goes, refining its historical patterns with new data. If you now add in data on  utility rates, the software can make decisions about when to power a home from its solar panels, from the grid or from the storage system to achieve the greatest energy efficiency while also lowering cost.

For example, the software can predict that there will be high demand on the grid late on a hot afternoon (and in some places, higher time of use rates). It would then switch on the air conditioning earlier in the day to “pre-cool” a home using solar energy (or grid power at a lower rate). When the peak demand hits toward evening, when high pricing is in force and solar energy generation low, the system would switch to running the home on stored power. The result: the house stays cool and comfortable, while making the best use of available energy – all without any work or oversight from a homeowner.

This coordinated approach to managing all a home’s energy can add up to some significant savings on utility bills. Depending on how local rates are structured, it’s even possible for homeowners with intelligent storage to find that in some months they have negative electric bills. That’s less money out of a homeowner’s pocket and a faster payback time on the investment in storage and smart home technology – a big reason Sunverge has invested in developing predictive analytics in its energy storage control software.

There’s also long-term value in using intelligent energy storage to build a “smarter” home: Experience in Australia suggests that energy efficiency increases a home’s resale value. In Australia, which is a world leader in the use of intelligent storage, buyers are beginning to consider the energy efficiency rating of a home as an important purchase criteria. Over time, it is expected to become a widespread consideration for buyers – much as fuel efficiency ratings are for gasoline-powered cars.

When we consider the reliability and resiliency distributed storage brings to the grid, we usually think in the context of outages caused by severe weather, or perhaps extreme demand during a heat wave that overwhelms power lines.

Yet we may not be moving half as fast as we need, given an even more serious threat to the stability of the grid: its growing vulnerability to hackers and malicious software.

As the grid has become dependent on computers to manage its moment-by-moment dynamics, it also has become increasingly tied to the Internet. This is what makes it possible to do everything from activating peaker plants to connecting with the nearly 65 million smart meters installed in the US to manage smart devices in the home. This also is what exposes the grid to attack by hackers.

On-line merchants have suffered cyberattacks for years, as have numerous other businesses, costing them big money and exposing the personal information of customers. More recently, however, government agencies and even health care facilities have come under attack, putting national security and lives at risk. The most recent example is the widespread “WannaCry” attack this spring, when a stolen US-developed cyber weapon not only locked up computers at thousands of companies worldwide to the tune of as estimated $1 billion in losses, it also shut down the UK’s National Health service.

Now imagine how tempting it is for a hacker – or even a rogue state – to try shutting down the grid in a major city, or even an entire state or region. In fact, the U.S. Department of Energy’s quadrennial energy review released in January noted that “[r]eliability of the grid is a growing and essential component of national security” and that “the U.S. grid faces imminent danger from cyberattacks.”

Coordinated cyberattacks from Russia that targeted the electric grid in Ukraine two years ago are what many experts consider a “dry run” for a broader attack that could target the US. It’s really not a matter of if, but when.

A little further in the DoE report, however, is this declaration: “The loss of significant economic value from even short power outages places a very high premium on customer as opposed to system reliability” (emphasis from the report itself). Customer reliability is precisely the role DERs can play in the defense of the grid and protecting us not only from the effects of a hurricane or heat wave, but also from the worst effects of a cyberattack.

Just the economic effects alone would be tremendous. In a survey of businesses by  Dimensional Research, half the participants said their business would be negatively affected by a mere 15 minutes or less of IT downtime. Then there’s the fact that more people than ever work from home – the federal Bureau of Labor Statistics says 24 percent of employed people “did some or all of their work at home” in 2015.

At the same time, fewer than six percent of U.S. homes have backup generators – even in the wake of disasters like Hurricane Sandy in 2013, which created the biggest surge ever in generator sales according to generator maker Generac Power Systems. Just this April, a single substation fire in San Francisco left 88,000 customers across a huge swath of the city without power for seven hours – again, most of those homes and businesses lacked any kind of self-sufficiency in electric power. It’s clear we’re not moving fast enough.

It’s also highly unlikely for generators to be a viable solution in urban areas, where it would require the storage of massive amounts of flammable fuel on every block, and spew fumes into dense neighborhoods, all for a few hours of electricity. They also are unwieldy in more remote areas where fuel delivery is difficult and costly. Plus, they are investments that don’t pay back until and unless there’s an outage.

By contrast, distributed storage can continue to generate and store clean, renewable energy indefinitely and can operate even if the grid’s digital controls don’t. (It’s no accident that the security researcher in Ukraine highlighted in the Wired story I linked to above had a battery backup at his home.) Sunverge’s fleet of energy storage systems delivered more than 20,000 hours of back-up power to home owners last year. Distributed storage also offers benefits during everyday operation, which is why so many states have enacted significant goals for storage deployment as part of their energy policies.

I’m not one to predict doomsday, but it is inevitable that we will see increasing incidents of grid failures from cyberattacks. It doesn’t matter whether it is deliberately launched by a hostile country, a terrorist cell, a lone hacker or even simply by accident as destructive code wanders the Internet on its own: The effect will be the same. Given the ever-present potential for those attacks, and the essential role DERs can play in maintaining grid-edge reliability, economic stability and even national security, we ought to be creating our policies to set targets much higher and deploy them much faster.

There’s a perception in some parts of the marketplace that distributed energy storage is a luxury item aimed at wealthy households. Call it the “Tesla Effect,” since that company’s batteries have been positioned largely as accessories to charge the company’s luxury EVs. If storage is an add-on to an $80,000 car, then it has to be aimed at the wealthy – even in a state like California, where the median household income is $65,000.

The reality is very much different for the 3.8 million low-income households in California. In fact, distributed storage can provide significant benefits to low-income residents, who spend a disproportionate amount of their income on energy from the grid. Far from being a luxury, in California storage should be considered a necessity, especially in light of recent changes in the structure of electric rates.

The outsized “energy burden” for low-income families is significant. US households with median incomes of $25,000 pay 7.2% of their income for energy, compared to just 2.3% for households with median incomes of $90,000, according to a study by Energy Efficiency for All and the American Council for an Energy-Efficient Economy.

As a result, California subsidized the installation of stand-alone PV installations on affordable dwellings across the state. Those systems have helped both the owners and the tenants of these buildings realize significant savings on their electric bills.

The new state rates, though, negate most of the savings, according to an important new study. According to a report from the Clean Energy Group, the changes will decrease the average savings for affordable housing owners by 56% to an average $3,320 a year. Tenants face a net economic loss of 29 percent as a result of this savings reduction.

The same study concluded, however, that adding “smart” energy storage to those PVs not only restores the original savings, but by offsetting higher rates and demand charges, can double or even triple the savings. It estimates that by adding a modest level of storage, affordable apartment buildings would save nearly $9,000 a year – more than the total solar savings before the rate changes. Add more storage capacity, enough to make it possible for the ratepayer to move to a lower rate tier – then storage could result in an annual savings of almost $28,000!

We’re seeing this kind of benefit already in places like the Hawaiian Gardens Apartments, a 280-unit, low-income complex in one of the most disadvantaged communities in Los Angeles County. By adding solar panels and Sunverge storage units, tenants have lower utility bills, while the owners have decreased tenant turnover.

Even better news for low-income households: California’s State Senate just passed SB700, which creates a separate program to help fund distributed energy storage through 2027. The bill, authored by State Sen. Scott Wiener (D-San Francisco), sets aside 30 percent of its funding for placing storage systems in low-income residential housing and disadvantaged communities, as well as for job training and workforce development.

At Sunverge, we have long believed that the intelligent storage future needs to be available to everyone. That’s why we see the “Tesla Effect” as so troubling. The reality is that storage can offer savings, reliability and clean energy whether you own a top-of-the-line EV – or can’t afford a car at all.

The decision by the Trump administration to withdraw the nation from the Paris climate accords was a disappointing one for me, and for all other advocates of distributed energy. In the face of both climate change and ever-increasing stress on the current electric grid, turning our backs on international cooperation on renewable energy is incredibly short-sighted and economically risky.

What’s most disappointing to me isn’t the potential economic impact on our industry, however, although that’s clearly a concern for anyone in the business. The real issue is the effect on American leadership when it comes to our national and global energy future.

With the US removing itself from this global agreement, we are effectively declaring a national policy that abandons that future in an attempt to delay an inevitable shift away from our energy past.

Coal and other fossil fuels are the energy sources of that past. They not only damage the environment, they also force the continuation of a grid structure designed around large, capital-intensive central generation facilities. With an aging infrastructure and rapidly shifting demand, that century-old grid design is highly stressed and often taxed beyond its ability to cope.

In addition, the sheer cost and complexity involved in siting and operating large-scale fossil generation plants means we’re unlikely to see many of these built. Indeed, many utilities are trying to figure out how to pay for and maintain their legacy power plants (nuclear as well as coal) in the face of systemic change.

It’s clear that our energy future will rely heavily on distributed energy resources. What will be centralized instead of generation are intelligence and control. That grid structure, as I’ve pointed out many times before, enables a much higher degree of energy efficiency, reduces cost for consumers, reduces capital costs for utilities, and creates a grid that is effectively a network based on services that provide value to users and new revenue streams to utilities. This future grid is already being developed in many places around the world, and the initial results are extremely positive.

It’s also clear that the next-generation grid will depend on the widespread inclusion of storage in order to provide maximum flexibility, resilience and value. That’s why so many significant projects are underway in the US, Canada, Australia, Japan and elsewhere to catalyze the mainstreaming of storage. Our rejection of the Paris accords sends a strong signal that the US isn’t interested in remaining at the forefront of this shift, which inevitably hands the baton to other nations.

That’s ironic, considering that one of the supposed reasons for the administration’s decision is to protect American jobs and our economy. We are right now one of a handful of nations leading the innovation race in distributed energy and storage, and it has become a national economic force.

There are 3.3 million Americans at work in advanced energy jobs, many of them in manufacturing, and the number is growing. In Wyoming, coal miners are being retrained to be wind farmers. Our company has brought new job opportunities to Stockton, California. The same benefits are happening all over the country.

Renewables and storage are also creating economic benefits for consumers and businesses in state after state, including ones where coal once played an outsized economic role. A Kentucky coal company is replacing a coal mine with the state’s largest solar array. Kansas tripled its renewables generation capacity in the space of three years, the highest rate in the country. North Dakota is no. 1 in wind energy per capita (creating work for wind turbine service technicians, which the federal Bureau of Labor Statistics lists as the fastest growing occupation through 2024).

The storage products our workers make lower energy bills for residents of affordable housing in Sacramento and other communities. In Kentucky, Sunverge is working with innovative utilities like the Glasgow Electric Plant Board on pilot projects for storage to increase reliability and lower bills for its residents.

This isn’t just the view of my company, my industry or even the majority of the energy sector. Even Lloyd Blankfein of Goldman Sachs has labelled this decision as short-sighted for the economy overall.

Fortunately, there is widespread understanding across the country that both renewable energy and distributed storage are not blue state or red state issues, but the American future. In fact, there are 30 states that have or are considering legislation and utility rate structures that support this modernization of the grid. Since utilities are regulated at the state level, as well as municipally owned in many cases, it’s likely that efforts in grid modernization, distributed storage installation and supportive tariffs will continue at a strong pace.

So I remain both hopeful and confident that we’ll continue to make strides and innovate because the marketplace itself is demanding it. Both American consumers and state lawmakers understand the need and are driving us toward the future. We will make the transition, along with the rest of the world. Given that, we ought to be asserting our global leadership, not abandoning it.

Analysts forecast that nearly 200,000 California homes will add rooftop solar Photovoltaic (PV) systems next year, and all of these new solar customers will be on the Net Energy Metering Utility Tariff (NEM 2.0) and Time-of-Use Electricity Rates. In January 2016, the California Public Utilities Commission approved new net metering rules, outlining how a utility company is required to credit their customers with rooftop solar installations. This affects the three major California investor-owned utilities: PG&E, SCE, and SDG&E (with over 10 Million California residents). With a Time-of-Use rate, the cost of electricity delivered by the utility to the home varies over the course of the day, and the utility charges a customer more for electricity during times when local demand is high. (For a little bit of background on the concept of “Net Energy Metering”, check out this recent podcast.)

NEM 2.0 – What’s Different?

The value of energy produced by new PV systems will be comparable to the value under current NEM 1.0 rules; however, new solar customers (and over half a million California residents who already have solar) will see their electricity savings impacted in a few major ways:

Another implication for new solar customers is a fee paid by the solar installer to interconnect their solar system to the utility grid under NEM 2.0. This adds between $132 and $145 to the overall cost.

Despite these changes, the benefits to system economics that preserve the full retail rate for solar exported to the grid with NEM 2.0, combined with Time-of-Use electricity pricing increases the average annual savings of a home solar system that includes intelligent energy storage.

A recent Sunverge analysis shows that a rooftop solar system in San Francisco, California paired with energy storage enabled by software can be 10-30% more valuable than under the current rate structure. The average California home could save around $1,100 more than if the current PG&E rate plan continued.

Solar Self Consumption and “Non-Bypassable Charges”

With new non-bypassable charges under NEM 2.0, intelligent energy storage systems can be used to self-consume solar in a way that autonomously optimizes energy consumption at the individual home level. Sunverge algorithms, for example, are already programmed to optimize home solar production to maximize the stored solar power for homeowners.

Electricity Pricing models like these have been implemented by utilities for years, where energy storage can be used as a key mechanism for optimizing solar production. The battery systems are programmed to extract higher value from the Time-of-Use Rates for homeowners by controlling the charge and discharge of the battery to respond in real time to differences in local electricity demand. Sacramento Municipal Utility District (SMUD) used critical peak pricing as a lever in Summer 2015, testing Sunverge algorithms to optimize a zero-net energy community of 34 homes. Customers with energy storage saved 15% more by arbitraging energy during peak times to maximize stored solar power and net energy metering benefits.

With NEM 2.0, California residents have a new, even better opportunity to save with a solar and energy storage system at their home.

 

Every year, distributed energy resources (DERs) become a more significant component of the energy network. Utilities, customers and regulators all recognize the essential role storage plays in modernizing the grid and ensuring resiliency.

It’s an environment that’s highly favorable for adding distributed storage, as that recognition shifts into actual programs that benefit storage customers.

Let’s start with the fact that there are now a record 30 different energy storage bills before various state legislatures in the US. The legislation is about evenly split between measures that would provide or increase the financial resources available for storage, or that create mandates for dramatically increasing the amount of distributed and other storage. Half these measures have been introduced in three states that have served as bellwethers for DERs all along: California, Hawaii and Massachusetts.

Beyond the statehouse, two dozen states, along with their utilities, are taking concrete steps toward grid modernization, and these plans often include distributed storage. Rhode Island’s grid modernization proceeding is one such effort; in almost every case, concerns about resiliency from threats old (weather) and new (cyberattack) are leading directly to discussions about the need for storage. With customer expectations higher than ever, utilities are giving greater thought to the ways storage can mitigate these concerns by stabilizing the grid during extreme events to minimize the duration of unplanned outages.

In many cases, utilities aren’t waiting for policy makers to make a major push to add DERs with storage to the local grid. According to UtilityDive’s “2016 State of the Electrical Utility Survey,” which included responses from 515 US utility executives, 40% are pursuing distributed storage projects and see this as a potential new revenue stream – among the top five areas they are considering for the future. And in terms of their own investment, nearly two-thirds of US utilities believe they should increase their investment in storage – more than any other category.

If those mega-trends aren’t enough, just consider a more practical issue: We’re heading into summer, the time when resiliency in the grid gets its toughest test. Long, hot days drive up demand as air conditioning kicks in; thunderstorms and other severe weather events can take large sections of the grid down. As climate change becomes a more significant factor, these weather events are becoming more frequent and stronger, which means power will be out more often and for longer periods.

All these factors help explain why 76% of solar installers currently offer storage installation (or will in the next year), a higher proportion than those who offer solar maintenance. In fact, according to the EnergySage 2016 Solar Installer Survey, storage is the number one new offering for installers this year – “no other new product or service was nearly as popular,” it said.

This is why we expect to see storage added to a large number of the one million US homes that had solar installations as of last year, according to GTM and SEIA. By 2020, if the OneMillionStrong effort succeeds, there will be four million solar-equipped homes in the US – and I’m confident the majority will have integrated storage with intelligent utility management.

By Ken Munson, CEO of Sunvege Energy

Headline Source: Navigant Research

How about “solar eclipse?”

That’s how important solar generation has become in the state: Utilities and CAISO are preparing to handle fluctuations in generation and demand during a partial eclipse this summer.

For 82 minutes on the morning of August 21, the moon will move across the path of the sun. Sunny California will be a lot less so as the moon blocks 76% of the sun in Northern California, and 62% in the Southland. Besides the rare spectacle, it also means a significant reduction in the power available from solar plants for about two hours of the business morning.

In fact, CAISO forecasts a 64 percent reduction in power from commercial solar facilities at the deepest portion of the eclipse. That’s highly significant in a state that will have 10,000 MWs of installed commercial solar capacity by August.

Of course, residential solar installations will be affected, too – and they account for 65% of the 5,800 MW of rooftop solar power. That’s a lot of power that will be unavailable – the projection is that other grid-based supplies will have to make up 1,365 MW during the event. (The forecast also assumes a drop in wind power at the same time, based on the experience in Europe during an eclipse in 2015.)

Eclipses don’t happen every day and they are predictable to the minute and to a precise “shadow,” unlike heavy fog or other weather-related reductions in solar energy. Utilities have plenty of time to plan for this event, and to observe the effects on the grid from such a dramatic loss of renewable power.

There is one group of people who don’t have to worry, though: Homeowners who have storage connected to their solar panels. Not only will they have plenty of reserve power to see them through the “dark hours” of August 21, their increased demand won’t draw on the grid.

The CAISO plan already calls for studying the effect of rooftop solar on the load forecast during the eclipse. It also provides an ideal opportunity for CAISO and California utilities to observe the way in which storage contributes to the resiliency of the grid when mean solar production is reduced.

Of course, installing local storage to prepare for an eclipse isn’t the most efficient plan — the next solar eclipse visible in California occurs in October 2023. But it does get foggy, and summer loads do stress the grid, and as California becomes more dependent on solar, it will become more dependent on storage as well.