Energy storage aggregation unlocks benefits for homeowners, grid operators, and installers

Rooftop solar energy is instrumental in the grid’s evolution towards a decarbonized, reliable structure that is beneficial to all.

The time mismatch between peak solar production and residential peak energy demand has driven a need for distributed energy storage units to smooth the peak and more efficiently respond to demand.

Residential solar companies like Sunrun and now researchers in New Zealand are learning that the benefit of storage can be improved when storage units are used collectively, meaning batteries store and discharge power from the grid based on times of peak production or peak demand. And the gain in value is shared between solar companies, homeowners, and grid operators alike.

In a recent report published by the University of Otago in New Zealand, researchers took a demand-driven approach, analyzing a per-minute resolution time series of individual household demand over several neighborhoods that contained these distributed assets. A trial led by Aurora Energy and SolarZero in southern New Zealand provided data on the efficacy of this collective battery use method.

The results found that the collective use of batteries had dramatic effects on both load smoothing and peak demand shaving. Aggregation of smart storage led to a reduction in per-house battery requirements by 50% for load-smoothing needs and by 90%  or peak shaving.

The researchers said the results make a case for coordinated battery deployment at the street or building level for multiple economic benefits. These benefits include the potential reduction in energy storage cost for homeowners (who could buy a smaller unit), benefits to the grid in easing demand and load related strains, and benefits to solar developers who can add another value chain to their operations by facilitating these grid services.

As an example, if peak shaving occurred for demand above 3 kW per house, deploying batteries individually for 20 houses would require 120 kWh of storage.  By contrast, deploying batteries collectively would only require 7 kWh, the researchers said. Sharing batteries or having one battery per 20 houses would be a less expensive approach to providing these services, they said.

Battery aggregation

In the U.S., Sunrun has been a pioneer in aggregating batteries. In 2019, the residential installer secured a 20 MW bid to participate in New England’s ISO 2022-2023 forward capacity market, one of the first contracts of this type in the United States.

As part of the bid, Sunrun said it would deploy distributed solar and battery storage to about 5,000 customers in Massachusetts. It will be required to offer the grid 20 MW of power, 24 hours a day for the one-year period. In return, Sunrun will be paid $3.80/kW/month, representing a $912,000 total contract value. Homeowners who signed up for the program agree to allow their battery to be discharged overnight. In exchange, they receive an upfront cash incentive as either a payment or a reduction in the upfront cost of their system.

Sunrun has another project with a different strategy, where it is partnering with East Bay Community Energy (EBCE) near Oakland, California, to offer battery storage to low-income multifamily customers. The San Francisco-based installer will deploy solar-plus-storage on more than 500 low-income housing units by 2022. The energy storage units will deliver 500 kW of grid reliability capacity to EBCE, and homeowners will receive financial incentives for their participation in the program.

Homeowners needs, grid requirements, and policy environments vary widely across the country. Sunrun also has launched bring-your-own-device programs, virtual power plants, and non-wires alternatives, finding success in creating value propositions that share benefits among the homeowner, grid operator, and the solar installer.