Sunrun partners with startup to manage virtual power plants

Sunrun, a leading residential solar and energy storage provider, announced it has appointed Lunar Energy as manager of its national virtual power plant (VPP) division. The solar installer currently has VPP operations in New England, New York, California, Arizona, and Hawaii, with plans to expand into more states and territories.

“A VPP is a virtual aggregation of distributed energy resources like PV, energy storage, EV chargers and demand-responsive devices (such as water heaters, thermostats, and appliances),” said Jigar Shah, director, U.S. Department of Energy Loan Programs Office in a previous Op-Ed provided to pv magazine.

Sunrun will make use of Lunar Gridshare software, an energy management system that currently manages over 35,000 home batteries in Japan and 1,600 in Europe. The new partnership will add tens of thousands of batteries aggregated in Lunar’s network, said the company. Lunar said it is also developing its own residential battery storage product, which will be available in the coming months.

“VPPs do more than provide decarbonization and grid services – they increasingly give grid operators a large-scale and utility-grade alternative to new generation and system buildout through automated efficiency, capacity support, and non-wire alternatives,” said Shah. “By deploying grid assets more efficiently, an aggregation of distributed resources lowers the cost of power for everybody, especially VPP participants.”

A case study submitted to pv magazine on the potential of homes with solar-plus-storage as VPP participants can be found here. 

Mary Powell, CEO of Sunrun, celebrated Lunar Gridshare’s ability to manage multiple devices from several different manufacturers at the same time, calling it a “game changer” for the company.

“To build the grid of the future, it is so powerful to be able to flawlessly orchestrate all the various distributed energy technologies in our customers’ homes,” said Powell.

Sunrun has been a pioneer in aggregating batteries in the U.S. 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.

In November, Sunrun was selected by the Puerto Rico Electric Power Authority (PREPA) to deploy a 17 MW network of solar-plus-storage virtual power plants (VPP) across the Caribbean island.  The VPP network marks the first large-scale distributed storage program on the island to date.

Prone to repeat hurricanes over the past few years, Puerto Rico’s VPP network will harden the island’s power grid by networking more than 7,000 Sunrun residential solar plus energy storage systems.

“We’re solving energy insecurity on the island by switching the model so that solar energy is generated on rooftops and stored in batteries to power each home, and then shared with neighbors, creating a clean shared energy economy,” said Mary Powell, Sunrun CEO.

More than 3 million Puerto Rico residents were without power following the Hurricane Fiona landfall on Puerto Rico on September 17, while Sunrun customers on the island were able to use power through extended outages, providing more than 350,000 hours of backup power to thousands of homes.

Grid services

In a report published by the University of Otago in New Zealand, researchers found that that the collective use of batteries had dramatic effects on both load smoothing and peak demand shaving, two important services in a stable and efficient grid.

Aggregation of smart storage led to a reduction in per-house battery requirements by 50% for load-smoothing needs and by 90% for 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.