Solar Energy Storage: Page 8 of 14

Emerging Technologies, Markets and Applications

What markets and applications currently provide an optimal value proposition for PV systems with integrated storage? How do you see this evolving over time?

Solar-plus-storage systems add value to traditional solar arrays by enabling benefits such as emergency power, peak-demand reduction, improved power quality, ramp-rate control, load shifting and grid services. Optimizing a system’s capability depends on what market you’re in. California, for example, has high-demand charges that storage can mitigate, and PJM Interconnection’s ancillary-services market provides a premium for the fast-reacting power that batteries can provide. Many states are exploring what they can do to encourage distributed storage, and we expect opportunities to sprout up in these areas as well. Because solar plus storage is such a flexible asset, it will be well positioned to optimize value as the regulatory, utility and financial environments evolve over the next few years.

What is the unique value proposition of the Solar Grid Storage PowerFactor system?

The company has developed a business model that allows batteries to be added to commercial PV installations while lowering costs and adding benefits. Our PowerFactor systems perform all standard PV functions while enabling innovative uses of solar energy, such as delivering emergency power during outages, reducing demand charges and helping grid operators balance power. We either sell our inverter/storage assets to the system owner or finance them separately, providing the inverter as a service. In both cases, Solar Grid Storage operates and maintains the system.

What policy shifts or utility cost-structure changes will significantly impact the growth of storage systems in the US?

FERC Orders 755 and 784 require grid operators and utilities to develop programs aimed at delivering fast-reacting services that help balance and stabilize the grid. The orders establish an equitable framework for on-grid energy storage to participate in the open-energy market. They outline compensation guidelines and evaluation strategies for independent system operators [ISOs], implementing technologies that balance the grid, stabilize power and improve resiliency. They also address market inequities that often favor older methods of balancing demand and mandate that ISOs and utilities take into account speed and accuracy when evaluating grid stabilization technologies.

Solar Grid Storage is advocating for other accommodating policies such as financial incentives for solar plus storage. We believe there is a good case to be made for regulated utilities to invest in solar-ready inverter/storage systems, which would allow the solar industry to plug into systems already paid for and interconnected by the utility.

What are the major obstacles to the expansion of the sales and deployment of solar storage systems in the US?

Many of the historic barriers to adding storage to solar are crumbling. The public’s keen interest in electric vehicles and the accompanying demand for robust, energy-dense and less expensive batteries is driving growth in battery sales and bringing the cost down. Add to that the emerging market in grid-level storage, and you have the conditions for profitable, rapid growth for battery suppliers. As we’ve seen in the solar industry, as costs go down, deployment goes up. Competition forces suppliers to produce better storage technologies that will last longer and cost less.

Barriers to large-scale deployment remain. While FERC is clearing the way on the grid-services regulatory front, local regulations can still prevent the solar-plus-storage connection. For example, there is some confusion about net metering with solar storage systems, particularly when a system also provides grid services. A bad interpretation of the codes could hold up revenue for underwriting the additional storage component of PV projects.

The final barriers to innovation are market based. How do you get the valuable new benefits of solar plus storage deployed cost effectively? The answer from our perspective is combining flexible technology with business models that find ways to monetize multiple benefits. This requires regulatory flexibility for sure, but also financial mechanisms that can attract capital at reasonable rates, even if the technology combinations are relatively new and untested. We believe the prospects for solar plus storage will improve with good operational experience, enabling funding sources to grow more comfortable with this new asset class.

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