Software can drastically improve the economics of commercial solar

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Commercial solar has always been the weak sister in the U.S. solar market — but Extensible Energy, a Berkeley startup, believes its software can drastically improve the economics of commercial installations.

Residential solar had a record 712 MW third quarter in the U.S and the contracted utility-scale solar pipeline is about 45 GW, the highest U.S. total ever, according to Wood Mackenzie.

Languishing in the middle is the commercial sector, which actually contracted in 2018 and 2019, due to unfavorable rate structures and incentives in states like California, Massachusetts, Minnesota and New York.

Historic remedies to improve the lot of commercial solar attempted to reduce transaction costs and speed up development timelines — but that’s proven less than effective. Commercial PV will never be a standardized install.

“Commercial solar is always a heavy lift”

“Commercial solar developers are having a hard time,” said John Powers, the founder and CEO of Extensible Energy and self-described “country economist,” software entrepreneur and utility-rate expert.

“We want to make sure commercial solar pulls its weight over the next decade. One of the key reasons that commercial solar hasn’t done well is because solar power saves energy but not demand.”

He noted, “Up to half of a commercial electric bill can be the demand charge. Solar is only saving on the energy half.”

Acting as a “virtual battery,” the startup’s software assesses building usage patterns and past bills, including demand charges. It forecasts weather, solar production, utility rates, and electricity usage. The software controls the building’s flexible loads to optimize demand charge and time-of-use savings — helping facility managers avoid making expensive mistakes.

The company targets office buildings, stand-alone retail, community centers, schools, air-conditioned warehouses, or industrial facilities with flexibility in their usage, but “Buildings where most electrical loads are critical to operations or individually controlled, such as hospitals, apartment buildings, hotels, and food service are not ideal candidates,” according to the company website.

“Load flexibility is the giant issue nobody is talking about”

The typical flexible load (and energy hog) is the HVAC system — but other flexible loads include EV charging, pumps and battery storage.

The CEO explains, “Let’s say we see a cloud coming – we can pre-cool the building with solar and we can let the temperature drift back up. No one notices the temperature change and we smooth out a big spike in demand.”

The CEO told pv magazine, “Churches are great applications. They peak so severely during services. Churches can save 35% to 40% on their demand charges A retail site or office can save 20% to 35% on its demand.”

Jigar Shah, Co-Founder at Generate provides a testimonial: “Load flexibility is the giant issue nobody is talking about…Extensible Energy’s load-flexibility software is a win-win for the solar contractor and the building owner. Building owners get a higher ROI and faster payback time, and the solar contractor can offer an easy-install demand charge solution with or without batteries.”

Unlike Stem or Demand Energy which include batteries in their product, Extensible’s CEO emphasizes, “We are just a software company. We talk to what’s already in the building.”

Batteries are great, but…

“Batteries are great,” said the CEO, “utilities are deploying batteries on the grid. But a 20 kw-hr battery in a commercial building is large, complicated and requires fire suppression. The installed cost is many times the cost of the battery itself.”

“Our software can be used to decrease the cost and size of energy storage. If you’re buying the battery for resilience, we can use half of the battery for demand charge management. The cost of our software is one-tenth or one-twentieth the cost for installing a big battery in cost per kw-hr.”

Extensible operates on a software-as a-service-model with costs depending on the size and complexity of the building. “Most commercial buildings can expect set up and five years of service for between $10,000 – $20,000,” according to the company.

The CEO notes that the startup is 100% partner-driven. “We go through energy development partners – almost exclusively solar development partners.”

Early funding came from a DOE SBIR phase 1 and phase 2 grant that yielded a field-tested prototype. Further funding has come from the CEO with capital from the earlier sale of a software company to ABB. The company currently has ten employees.

“Everyone in this industry is hardware-happy but there are some really good software alternatives. This makes a commercial deal pay off much faster.”