Renewables have gained strong market penetration in recent years. So much so that the Trump Administration’s love affair with coal and other fossil fuels will not slow down the momentum. Cities and businesses are adopting aggressive goals to achieve 100% renewables. Furthermore, renewable energy is good business. It is an expanding industry that employs nearly 3.5 million Americans.
Solar is popular on both the consumer and utility side of the meter, while wind remains more of a utility scale resource. According to the Solar Energy Industry Association, solar has experienced an annual average growth rate of 68% during the last decade. Energy storage is growing in popularity on both sides of the meter.
According to Greentech Media and the Energy Storage Association, 41.8 megawatts of energy storage were deployed across the U.S. in the third quarter of 2017. This represents 46 percent year-over-year growth, and 10 percent growth over the second quarter of 2017¹. Greentech Media expects the U.S. energy storage market to grow to roughly 2.6 gigawatts by 2022, almost 12 times the size of the 2016 market.
Incentives and rebates have certainly helped spur growth. Solar continues to enjoy a 30% federal tax investment credit through 2019 and energy storage that charges directly from solar is eligible for the same tax credit. Any home or business owner with a tax appetite can get 30% off the total cost of their solar plus storage system.
How does storage work? Energy storage captures sun power from solar panels during their limited production hours, so it can be used later in the day when the sun is not shining, and the grid is stressed by heavy evening use. This strategy is known as Solar Self-Supply. Other strategies include:
Renewable Energy Smoothing – storage brings predictability to intermittent renewables such as solar and wind.
Demand Charge reduction – Commercial & Industrial (C&I) facilities often see a large portion of their bill (40-50%) in the form of demand charges. Demand is a surcharge based on the 15 to 60 minutes of highest intensity energy use during a billing cycle. Discharging batteries during times of peak demand targets one of the most expensive charges C&I customers face.
Energy storage can also keep solar operating during an extended power outage, providing much needed resiliency. We need look no further than last hurricane season in the Southeast, Puerto Rico and the Caribbean to appreciate the need for resiliency.
In normal operations, energy storage can be tied to charge off the grid, or directly from solar panels. By having the capability to switch over to a Microgrid capability during a power outage, solar can continue to generate clean energy and provide back-up power through the use of batteries and in some cases, generators. This approach works for homeowners as well as C&I facilities that lose millions of dollars in production during an extended outage.
Keeping essential facilities like hospitals, nursing homes and community shelters is crucial during a natural disaster such as a hurricane, tornado, earthquake or other cataclysmic event. Properly designed energy storage systems with intelligent optimization software can do just that.
How to size an energy storage system
Depending on the desired strategy, energy storage can be sized first by looking at the building consumption patterns, the tariff structure and the ongoing energy use profile. If resiliency is a key objective, it is important to determine the size of critical loads that must remain operational during a disaster. This approach can be used for modeling back-up loads for businesses or individual homes. Intelligent software can model a range of scenarios.
Ellen Murray Howe is a Solar plus Storage Sales and Project Development Leader at JLM Energy Inc., a California-based energy technology company. JLM develops proprietary software and energy storage technology designed to meet the objectives described here. For more information visit https://jlmenergyinc.com/