Distributed Energy Storage Systems: Page 6 of 6

Daniel Sherwood
Director of product management, SolarBOS, solarbos.com

What products or services does SolarBOS offer for solar-plus-storage microgrids or distributed energy storage systems?
Until recently our focus was on the battery connection panels used to connect multiple storage batteries in parallel prior to an inverter. These connection panels are like giant combiner boxes, except instead of 15 A inputs they might have 1,500 A inputs. We are getting our feet wet with a few lithium storage battery projects where we integrate the battery cells, battery management system and a NEMA-rated enclosure for our customers. Recently, we built a 500 kWh storage battery that we installed in a 40-foot sea container and paired with a 1 MW grid-interactive inverter. That project was completed in partnership with Amperex Technology Limited (ATL), a global battery supplier entering the North American market.

What kind of battery technologies are you specifying in your energy storage systems?
Lithium iron phosphate is our chemistry of choice. We like the improved safety features: The battery won’t catch fire if you overcharge it or if a cell gets damaged in shipping.

What are the biggest challenges to the increased deployment and commercialization of distributed energy storage solutions?
The biggest hurdle is sticker shock. Our customers are used to the price of lead acid batteries, which are comparatively inexpensive—or at least seem to be at first. What customers need to realize is that lead acid batteries don’t hold up well if you deep-cycle them or if you allow them to sit at less than 100% state of charge. Lead acid batteries are also inefficient. If you put 10 kWh of energy into a lead acid battery, you get only about 7 kWh back out. Lithium batteries are more cost-effective than lead acid batteries over the life of a microgrid project, once you factor in efficiency improvements, dramatically longer battery life and reduced maintenance.

What can industry stakeholders do to improve cost recovery for distributed energy storage solutions?
Like PV projects, energy storage systems require a large up-front cash outlay that you recover over time. Part of the solution is to make storage batteries more bankable, which will increase financing availability and reduce financing costs. Independent system operators also need to open up more markets for grid services. Right now, unless I’m a large industrial user of power, I will pay about the same for 1 kWh at 4pm as I do at 4am. Energy costs should be higher when the grid is constrained, to create an incentive to reduce peak demand.

Phil Undercuffler
Director of strategic platforms, OutBack Power, outbackpower.com

How is the solar-plus-storage market in the US evolving?
We are entering the third wave of solar plus storage. In the first wave, systems were primarily off-grid, which constituted the majority of the market. The second wave consisted of grid-connected systems where the customer was willing to make the additional investment beyond the solar one to ensure reliability of service and resiliency; in effect, storage served as an insurance policy. In today’s third wave, storage is actively engaged in the daily energy cycle of the home or facility. Storage works to increase self-supply or decrease grid charges by addressing demand charges or other tariff-related levers, or it provides income streams via participation in demand response or other peak pricing programs. It may also provide ancillary grid services, such as frequency regulation and capacity markets.

What are the biggest challenges to the increased deployment and commercialization of utility-interactive distributed solar-plus-storage applications?
The primary challenge at the moment is not technical, but rather policy related. The many benefits of distributed storage are well understood, but leading states such as California, New York and Hawaii are still refining the tariff and interconnection structures to unlock its full potential. In addition, system integrators and designers do not yet fully understand storage. Unlike solar inverters, which convert photons to electrons based on the arc of the sun, storage systems need some level of market intelligence to determine when energy is most valuable and leverage storage energy to the best effect. The industry needs to develop tools and business models that will unlock the maximum value of energy storage systems.

Do you think that distributed solar plus storage is a threat to or an opportunity for utilities?
We stand at a fork in the road. Down one path, we have distributed energy storage working as a powerful asset for utilities—relieving congestion, balancing circuit loading, regulating voltage—and providing broad societal benefits. In this scenario, grid operators reward and encourage energy storage. We have true grid resiliency as a side benefit, in the same way the Internet is resilient by virtue of its distributed architecture. Down the other path, we have load defection and eventual grid defection as home and business owners realize that having their own power resource is less expensive and more reliable than buying energy. In this scenario, negative load growth coupled with the eventual impact of long-deferred infrastructure investments catches up with the utilities and creates the so-called utility death spiral. Utilities increase electric rates, assess meter fees and access charges for distributed generation, which exacerbates the negative load growth by increasing grid defection rates.

What can utility regulators do to improve interconnection of and cost recovery for solar plus storage?
One watt of non-exporting stand-alone storage faces greater fees and interconnection hassles than a megawatt of exporting PV. Regulatory bodies can clear the path to interconnection and provide cost certainty for developers and system owners, much as they have done for solar. Solar plus storage decreases circuit loading. It shouldn’t be held to a higher standard than solar, especially when it can address some of the negative issues stand-alone solar can present.

CONTACT:

David Brearley / SolarPro / Ashland, OR / solarprofessional.com

RESOURCES

Stanfield, Sky, and Amanda Vanega, “Deploying Distributed Energy Storage,” IREC, February 2015

US Energy Storage Monitor, GTM Research and the Energy Storage Association, February 2015

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