What’s all this Hype about Solar + Storage?

Combining solar and energy storage can generate significant value for commercial energy customers. Due to technology improvements and cost reductions, installing storage with solar can maximize energy savings potential and, with innovative financing solutions, it can be accomplished without using valuable capex dollars. That’s why REC Solar and Duke Energy recently entered into a partnership with Green Charge Networks to provide commercial energy customers the highest-value and most comprehensive storage and energy management solutions.

Combining solar and energy storage can generate significant value for commercial energy customers. Due to technology improvements and cost reductions, installing storage with solar can maximize energy savings potential and, with innovative financing solutions, it can be accomplished without using valuable capex dollars. That’s why REC Solar and Duke Energy recently entered into a partnership with Green Charge Networks to provide commercial energy customers the highest-value and most comprehensive storage and energy management solutions.

The old thinking on solar + storage

In the past, energy storage (a.k.a. batteries) were seen as expensive and non-essential add-ons to solar installations. They required significant maintenance and rarely generated positive cash flow.  Historically, the only reason for paying extra for onsite energy storage was to provide back-up power during blackouts or other unexpected electricity outages. Therefore, for most companies, energy storage was seen as an expensive investment for something that might be used once a year—or even less.

The new thinking on solar + storage

Today, it’s a new story. First, storage solutions have dropped in price thanks to new battery innovations that store more energy for less. Along with battery cost declines, advanced energy management software can now analyze a business’ electricity usage and draw energy from the least expensive source at any given point in time.

For example, at high noon when the sun is shining, the facility’s energy could be drawn directly from the solar panels and energy storage system, reducing a company’s peak usage when energy is most costly and recharging the battery during the morning or late evening when energy is less costly.  Ultimately, by combining solar and energy storage a building can use energy smarter and the net cost to operate a building decreases.

Top peak shaving benefit: Reducing high demand charges

Most significantly, commercial solar plus storage can dramatically reduce costly demand charges, which can often make up half of a commercial or industrial company’s electric bill.

When a factory or business first turns on machines or a thermostat turns on heating and cooling systems, power usage surges to a level that’s higher than normal. Even if the power spike lasts just a few minutes, the utility will typically charge customers an additional monthly fee based on the peak kilowatt (kW) of power reached at that moment. Their reasoning is that they have to compensate for these surges by maintaining surplus power capacity, and they’re passing those costs on to the consumer.

To avoid these monthly demand charges, companies have to eliminate power consumption surges. That’s where solar with energy storage can help both customers and utilities. Energy management software can anticipate these power surges and draw energy from the building’s batteries, thus eliminating surges, helping balance the grid—and reducing expensive demand charges for a commercial or industrial facility.

Solar Plus Energy Storage Financing

The last element that’s getting companies excited about adding energy storage to solar systems is the new era of solar financing. Several years ago, solar and storage systems had to be purchased with cash or loans. Today, solar power purchase agreements (solar PPAs) allow companies to install solar and storage systems with little to no upfront costs. The PPA typically provides a business with lower electric rates than the local utility.

In addition, solar PPAs provide predictable, below market energy costs over the life of the energy sale contract. REC Solar’s PPA is backed by Duke Energy, the largest energy company in the United States, providing customers with even greater confidence in our long-term agreements.

The hype about solar and energy storage is real, and since the 30% investment tax credit (ITC) for solar has been extended five more years, the time is now to enjoy some of the best financial returns possible.  With solar plus storage, your company could discover significant savings, all while doing your part to reduce the negative effects of excess carbon in our atmosphere. Our oceans and all the creatures that live and depend on them will thank you. Give us a call and let us evaluate what Solar + Storage can do for your company.

 

What You Need to Know about Solar, Storage, and Microgrids

EC Solar recently participated in a webinar onRenewable Energy World that invited several experts to discuss the U.S. landscape for solar PV with microgrids, and energy storage for business.

REC Solar recently participated in a webinar onRenewable Energy World that invited several experts to discuss the U.S. landscape for solar PV with microgrids, and energy storage for business.

The panelists included:

Peter H. Asmus, Principal Research Analyst at Navigant Research. Peter is a leading global expert on microgrids and virtual power plants and the author of four books on energy and environmental issues.

Ben Peters, who serves as Director of Solar Finance & Policy at REC Solar. Ben provides strategic guidance on the commercial and utility sector, and he also manages REC’s economic analysis group, which helps REC customers to develop projects based on relevant regulatory and policy changes.

John Wood, Chief Executive Officer of Ecoult, an energy storage solution company. John first joined the energy storage community in 2008, having previously launched technologies globally in security, identity, payment technology, and telecommunications.

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The Growing Demand for Solar Microgrids

Peter Asmus began the webinar with a brief description of solar power microgrids and their advantages, including the ability to “island” (produce energy independently of the grid) during any kind of blackout or natural disaster. They’re also an economic advantage over fossil fuel-based generators in isolated areas, such as Hawaii and Puerto Rico, where most fuel for the grid is imported.

Peter also touched on the fact that energy markets and policies are rapidly changing and moving favorably toward renewable energy. States are implementing mandates and incentives that make solar energy competitive with fossil fuels. In some states like California, solar is already at grid parity without incentives, and storage costs are also rapidly declining.

The U.S. military is also noting the potential benefits of microgrids, both in the field, as well as adding to the security of a base’s infrastructure in case of attack or a natural disaster.

Another reason why the U.S. is getting more interested is climate change. The grid is getting less reliable thanks to the increasing number of super storms and extreme weather, both hot and cold. Peter’s graph on slide 10 shows how the number of power outages are increasing throughout the U.S.

Of course, there are also challenges to solar micrgrid growth, and Peter mentioned several. For one, utilities are putting up obstacles to  these types of complex grid integrations, not understanding their technology and questioning their benefit to the larger grid—as well as to their bottom line.

Given all of the above, Navigant is now forecasting a conservative estimate of 4000 MW of installed microgrids by 2020 in North America, and may be as high as nearly 8000 MW. Asia and the East may install even more, and Europe is also strong.

 

The U.S. Market for Solar Market Grids: Venues, Regulations, and Business Models

REC’s Ben Peters was next on the panel and began by highlighting all of the potential venues of microgrids, such as off grid applications for villages and island nations, as well as systems that might be integrated with military bases, universities, and research centers.

Ben then moved on to discussing the ideal physical and economic environment for an interconnected solar microgrid. With certain state incentives, many businesses and landowners might benefit from installing a microgrid to simply profit from providing solar electricity and grid storage directly to their local utility. This is known as a “front of the meter” business model scenario.

In the “behind the meter” scenario, the solar microgrid would be installed on site and feed solar electricity to the actual business or institution, thus reducing its energy costs and utility demand charges while also providing some backup power in case of a grid outage.

Beyond your potential business model, Ben talked about the physical and financing challenges of implemention. Typically, microgrids are financed, so an institution needs to be approved by a lender or financier experienced with these types of energy infrastructure projects.  Moreover, engineers have to be able to physically interconnect the project with the overall grid, and in some cases, that may not be possible due to the need for expensive grid upgrades.

In terms of markets, Ben displayed a map of the different solar microgrid markets that exist in the U.S.  today. The map reveals that most projects are being installed in areas of California, Arizona, New Mexico, Texas, Florida, North Carolina, Michigan, and New Jersey. Other states, especially in the Midwest, are installing them too, but these are smaller projects and fewer in number.

 

Solar with Storage and Microgrids and Their Applications

The last speaker, John Wood, focused his presentation on the storage component of solar microgrids. John really dives into the details of solar storage applications and the advantages of energy storage today when combined with renewables and fuel-based microgrids, especially for islanding.

In particular, John highlights storage as a solution for grid variability, especially for wind smoothing and solar shifting, which help balance the grid from these renewable energy sources that can fluctuate and surge by the minute.

He also discusses how battery storage can be added to existing diesel microgrids to increase efficiency, reduce the fuel costs, and of course reduce emissions.

Finally, John outlines the technology and advantages of his Ecoult UltraBattery lead acid-based battery solution, which combines diesel generation with renewables and battery storage. John discusses how this hybrid energy combination can be a cost-effective, efficient, and reliable solution for existing fossil fuel-based microgrids.

Those are the highlights of our webinar. You can see the entire webinar, as well as the post-webinar Q&A that dives deeper into costs, on RenewableEnergyWorld.com. (Click “Register” fill out the form, and the webinar will be replayed.) You can also view or download the PDF slides of the presentation here:

Of course, if you have any questions about this presentation or about solar economics for your facility’s operations, please contact us.

Is the Solar Microgrid Future Already Here?

Yes, we live in a utility grid dominant world right now that is mainly powered by fossil fuels and nuclear power. And yet, more and more microgrids powered by solar and other renewable technologies are coming on line or are under development today. In fact, Navigant Research recently stated that the microgrid is moving into full-scale commercialization and that the global microgrid market will grow from $10 billion in 2013 to more than $40 billion annually by 2020.

Yes, we live in a utility grid dominant world right now that is mainly powered by fossil fuels and nuclear power. And yet, more and more microgrids powered by solar and other renewable technologies are coming on line or are under development today. In fact, Navigant Research recently stated that the microgrid is moving into full-scale commercialization and that the global microgrid market will grow from $10 billion in 2013 to more than $40 billion annually by 2020.

As of the beginning of the second quarter 2014, Navigant has identified a total of 4,393 MW of total microgrid capacity throughout the world. As with the rise of solar PV installations in the United States, microgrids are heading into the mainstream, and both utilities and customers wanting more electricity independence and security will benefit.

What is a microgrid?

‘There are many technical definitions for a microgrid, but let’s just keep it simple: A microgrid independently generates electric power, 24/7, to a small community—as well as plugs into the utility grid. So it has the ability to “island” and be completely off grid, or it can integrate itself into the wider grid, if needed.

Today’s microgrids don’t have to include solar energy, but they often do. In fact, microgrids typically combine different sources of renewable energy with fossil fuel based generators and energy storage (batteries). That may seem like a lot to manage, but these microgrids are smart—unlike older utility power management infrastructure.

Microgrids use modern “smart grid” technology to know when to distribute each microgrid energy source and when to store it. Its smart grid technology can even automatically feed in or turn off connected energy sources by the minute or even by the second. That kind of energy versatility stabilizes the local microgrid and it helps balance out any renewable energy surges feeding into the utility grid.

Who benefits from the microgrid?

First, the community that hosts the solar microgrid benefits. That community may be a rural area, such as Borego Springs, California, where it’s expensive and technically difficult to build power lines and transmit power without energy loss. Or it could be a Hawaiian island owned by billionaire Larry Ellison, who wants to significantly decrease importing expensive fossil fuels to his island. More commonly, a large university campus, such as UC San Diego, can benefit by protecting its important 24/7 buildings and research facilities from blackouts and by reducing utility expenses:

 

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Moreover, entire states are now beginning to benefit from microgrids. The power outages caused by super storms Irene and Sandy have inspired the state of Connecticut government to implement a series of microgrids. Doing so will enable Connecticut cities to preserve essential services while downed power lines that are miles away are being repaired.

Similarly, military installations and other essential government facilities, such as the US Food and Drug Administration, benefit from the safety and security of an independent power source that is separate from an insecure and aging utility grid. And if you’re Google or Ebay with power hungry datacenters that need reliable power, rain or shine? They too will benefit from their own hands-on solar microgrid that includes non-fuel reliant renewable energy and batteries.

Although being an independent source of power may seem like a financial threat to the utilities, they can also benefit. Not only can utilities avoid building expensive infrastructure to support a rural community, they can also benefit from having an extra power source for peak times and for emergencies, such as hurricanes or other outages. Additionally, because microgrids often include renewable power sources like solar and wind, utilities can help meet their state mandated renewable energy portfolio standards.

Can microgrids save money?

As with all new technology, the initial price of microgrids is going to be expensive, but as they build to scale and the levelized cost of commercial solar, wind, and other renewables continue to fall, microgrids will become increasingly cost-effective as well as efficient.

According to the above UC San Diego video, their microgrid has already saved the university “millions of dollars.” With island nations that rely on a constant supply of expensive imported oil, gas, and propane, solar and wind and its unlimited non-polluting clean power can easily see an ROI over the 20 to 30 year life of the microgrid.

In addition, it’s the costs of not having a microgrid during blackouts and natural disasters that is making Connecticut, universities, and government facilities invest in microgrid infrastructure. As microgrids are tested in the coming years, it’s inevitable that studies will show their true cost-benefit. That being said, the fact that microgrid projects are projected to grow exponentially within the next 10 years indicates that microgrid customers are already projecting an ROI.

Current microgrid challenges

While microgrids are expected to grow in the next decade, it won’t be without challenges. Its new energy dynamic has to adapt and integrate with the existing grid. In addition, while the microgrid technology may prove to be sound, local regulations may prevent microgrids from competing with utilities that have state-mandated monopolies.

Nevertheless, as utilities see the smart grid benefits and eventual cost savings of microgrids, they’re likely to get behind changing the regulations and adjusting their business models.

If you’d like to know how solar can be integrated with the new age of microgrids,contact REC Solar for a free consultation.

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