Electrochemical batteries have been around for more than 100 years and solar photovoltaic (PV) panels have been in use for half a century. During the early days of solar, users deployed PV panels to charge batteries in places far from a power line or gas station. Those batteries powered things like satellites, weather stations and remote homes. Around the turn of the century, people began connecting PV systems directly to the electrical grid.
At first, the grid connection was for purely scientific or ideological reasons, and, as regions and businesses offered incentives and PV sped down the cost curve, people used PV to save money on electricity. In 2004, PV systems installed without batteries outnumbered battery-based systems for the first time – by 2010, solar-plus-storage systems were relegated to a small niche of the booming solar industry. But now the industry is coming full circle.
In October of 2015, Hawaii’s public utilities commission became the first in the U.S. to start limiting grid-direct PV installations due to impacts on local grids from midday power exports. New systems would not be allowed to send surplus power back to the grid indiscriminately. Thanks to a small but thriving number of businesses that still installed off-grid and backup systems, many Hawaiian solar customers deployed batteries to ensure their PV output was stored for nighttime use rather than pushed back to the grid. The writing was on the wall: PV and batteries were not as separable as we thought.
Since then, utility rates in several more states have been made more sophisticated, in part to discourage the export of solar PV power onto the grid at inopportune times. The industry is responding by making batteries available to most new solar customers. While the added cost of the batteries can make the financial payback of these PV systems less lucrative than the direct grid models, batteries provide additional resilience and control for the system owner – which is increasingly important to consumers and businesses alike. All of the industry signs are clear: storage is going to be part of most solar PV systems going forward.
Sign one: Everybody’s got a battery to sell
While long-standing off-grid and PV backup suppliers have quietly supported solar-plus-storage applications all along, the nation’s largest solar PV installers like Sunrun, SunPower and Tesla started offering battery products to their customers in the last several years. The companies continue to report dramatic growth in the share of battery sales to their traditional PV-only offerings. The advent of well-packaged, long-life lithium-ion batteries has made energy storage more appealing to consumers.
When the biggest names in solar get behind batteries, their marketing, messaging and political influence increases awareness among consumers, businesses, and governments alike. Their smaller competitors also take up the cause so that they don’t get left behind.
Sign two: utilities and policymakers see the benefits
Ever since utilities in California published the infamous “Duck Curve” showing the growing impact of high solar PV penetration on the grid, batteries have stood out as a potential solution. But it wasn’t until some industry pundits analyzed a proposed gas peaker plant in Oxnard, California compared to an energy storage-based solution that utilities and regulators realized batteries were cost-effective at the scale needed to offset the intermittency of renewable generation sources. Today, many state and local governments incentivize energy storage on both sides of the meter with programs like California’s self generation incentive program (SGIP) and New York’s bulk storage incentives.
Incentives like these have direct and indirect impacts on demand. Much like government incentives for energy technologies going back to the industrial revolution, they signal that businesses and consumers should embrace the technology – and they usually work.
Sign three: Safety is standardized
One of the surest signs batteries in homes and businesses are now mainstream is their inclusion in the latest codes and standards. Building and electrical codes published in 2017 and 2018 acknowledged batteries, but rarely went beyond insisting compliance with the then-new UL 9540 safety testing standard.
The definitive battery safety standard, National Fire Protection Association (NFPA) 855, was published in late 2019 after a productive engagement between industry representatives and the NFPA – a principal developer of national safety codes. The next round of codes, starting with the 2020 National Electrical Code, has been or will be harmonized with NFPA 855 to provide the same level of guidance to inspectors and building officials that they have for things like HVAC, water heaters and windows.
In addition to ensuring safe installations, these standardized requirements help building officials and inspectors consistently enforce safety requirements – which makes them more comfortable dealing with batteries and related equipment. As inspectors and officials develop routines for permitting and approving battery installations, the risk and time associated with those critical steps decrease, leading to shorter project timelines, lower cost and better customer experience. Like the previous indicators, it is a positive reinforcing cycle that continues to drive growth in the rapidly maturing solar-plus-storage segment.
What comes next
As more batteries join the electric grid, many exciting applications are possible. Several virtual power plant (VPP) type programs were recently established on both coasts, which enable homes and businesses to leverage their profitable battery systems to offer essential services that keep the grid stable.
Utilities continue to push the envelope with increasingly sophisticated rate structures that more accurately reflect their costs and environmental impacts of delivering power in real-time. Customers increasingly need energy storage to keep electric bills under control. And as climate change leads to more extreme weather and related outages, backup and resilience only grows in value and importance. The cycle continues to accelerate and reinforce itself along the way.
Paul Dailey is director of product and market strategy at OutBack Power Technologies, an EnerSys Company.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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Electric utilities have been crying since 2007, when they finally realized solar PV on residential roofs was a (real) threat to their operating bottom line and operations management. By the time the grid hit somewhere around 5% solar PV penetration, the utilities started crying about the “duck curve” and losing revenues by having to pay another utility entity to take over generation to keep the grid stable during over generation. Then the ISO’s got involved and it seems currently, it is O.K. to “curtail” solar PV or wind generation, then contract on the spot market for fueled generation to ramp around grid demands. All along the way the “low hanging” fruit of CEO excuses: “When your neighbor installs solar PV on their home, it will cost you more for electricity.” “Your neighbor has solar PV and “they” don’t pay their “fair share” of O&M costs”. Really cheesy, take a half-truth, make it “sound like” the truth and fill in the operational gaps with B.S.. Most IOU utilities around the country are allowed rate cases that will raise rates on services due to “lost revenues” when the utility doesn’t sell as much product as they used to. Solar PV is blamed often, but the utility has in the past and will in the future file a rate case for raising rates, with or without the solar PV excuse.
Utilities are allowed this excuse by way of the “duck curve” during solar PV peak generation times of the day, usually from 10 AM to 2 PM. Then the rallying cry is “curtail” non-fueled generation so “we” don’t lose money. After about 3 PM to 9 PM every night, we need more fueled generation resources online and “we need” to spike electricity rates during the TOU time to “recover costs”. IF there was just this thing, I’d call it an Energy Storage System. It would be used to store non-fueled energy over generation during the day from solar PV and perhaps from wind generation at night. That way the utility would not have to contract with fueled generation resources on the spot market for premium prices that is passed along in the TOU rate period.
The electric utilities understand Energy Storage can be used like a stacked revenues asset and can be used for grid services without a “power supply” that is specialized. Things like gas fired heat exchange generation facilities to meet emissions standards, waste remediation standards, then need a natural gas Peaker plant for fast reacting generation to put online for short peak demand periods on the grid. A properly designed Energy Storage System can be designed to generate power for hours or with enough energy storage could be used to generate power for days. Energy Storage Systems pay for themselves in a few years, instead of a few ‘decades’ like the old mechanical fueled generation assets.
As technology rolls along, more and more industries adopt the technology (batteries) in this case the economies of scale will drive down the costs of energy storage to the point of individuals installing enough energy storage to take care of their daily energy needs and use the utility as a back up power source. This time in history is the “cross roads” of electricity generation, storage and use, the utility will do (IT) or the individual will do (IT), the momentum of the technology is rolling along with or without the utility’s blessings.
The last paragraph sums up the entire process. The Utilities will ultimately have to “partner” with many distributed energy generation resources with many of them using their own energy storage or continue in their insistence of a uni-directional grid provider or become partners in a bi-directional distributed grid system. Insistence of a continued uni-directional grid will be the continuation of the death spiral of the electric utility in this country.
In order for solar PV to be a real player isn’t it obvious that it needs storage? You can have a hundred solar panels but they won’t be much use when you try to turn on the lights at midnight. Solar’s need for storage ( and for grid modifications to enable it) was never really talked about for home scale solar PV. Of course you get a free “storage system” when you net meter. And that brings up the question: should only those people with solar PV pay for the batteries?
It can be considered a net metered “free energy storage”, but the actual cost to the utility is an avoided cost. No, buying property, getting a right of way, getting loans or floating and administering bonds, purchasing the system, installing, maintaining, repairing or insuring the system. Avoiding these costs does have worth, also not taken into consideration, a distributed non-fueled generation system that does not stress the grid and is more efficient than the end to end grid. Solar PV excess generation is already at the proper voltage for the house next door to use without transformer step losses. Battery storage can make for a better self consumption system. If the battery is oversized, one could contract with the local utility as a energy storage and FCAS asset, for a reasonable price per kWh. With the utility “program” games going on right now, tiered block electricity rates, demand charges or TOU rate spiking. There may become a time to think smart Energy Storage System installed first, solar PV can be installed at a later date for self consumption. With a large enough battery and something like an 8kW inverter, you could run less energy cost by charging the ESS at late night early morning and using the battery and inverter from say 7AM to 9AM, then use the so called “solar duck curve” from 10AM to 3PM and then switch power from the ESS from 4PM to 9PM to erase the rate spiking during the TOU times.
My utility company, National Grid, is a distribution company only. They pass through transmission and generation costs and add their distribution costs. I have not paid N Grid a penny for years now for my net metered solar PV, yet they have removed trees, replaced wire, repaired storm damage so my power will not be interrupted. I have little mid day load and at my peak loads, morning and evening/night, my solar is underproducing or not producing at all. My excess solar generation may be going to my nearby neighbor but my morning and night power comes from a hydro, nuke, or nat gas powerplant miles away, enabled by N Grid’s distribution system. How does my net metering produce an avoided cost to this utility?
Modern EVs will have around 60 kWh of storage. Two or three-car households would present 120-180 kWh of storage. Ideally this would be matched with a 10-15 kWh stationary battery for when all vehicles are away from the home at the same time. EV chemistries currently don’t have the available cycles to make this reality, but we are on the cusp of this changing. Furthermore, mobile storage can go and get more electrons when needed if the utilities don’t want to play nice. Expect to hear leading-edge information from Tesla in June. Others will follow and utilities will never be the same again. Utilities will exist but they will lose the monopolistic edge they have held for decades.
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