If you've had your head in - or really anywhere around - renewable energy news as of late, you've likely come across a lot of battery storage talk. Much of the discussion has centered around the utility grid being able (or unable) to package the massive amounts of energy being produced by solar and wind farms for later use. However, an increasingly popular trend we are seeing is battery storage in the home or business. Here we break down why consumers are moving in this direction at this stage of the game and, in turn, why storage might be the next step in conscious consumerism for you.
1. People are moving to Solar + Storage to curb the effects of newly-implemented TOU rates.
One of the things I (DJ) do around here at Sunrise 805 is generate electrical bills for commercial tenants based off of submeter readings. We install the submeters - think, electrical meters but more compact and more numerous - at strategic locations around a facility (typically near a main electrical panel or other sub-panels), collect their data at a central information hub, and push those recordings online where we can monitor them remotely and generate bills on a monthly basis. Before sending these bills to their respective tenants, however, the factor we must always double-check is whether or not the energy utility's time-of-use (TOU) rates have increased since the last time we generated a bill. Throughout the process, I've gotten a front row seat to watching these rates slowly, subtly climb over the past year or so. Almost all sources indicate that this isn't a trend we should expect to stop any time soon.
In fact, time-of-use rates are making their way into the residential world as well. (Learn more about SCE's residential TOU rate plans here.) In March of 2018, SCE randomly selected 10% of its customer base (400,000-or-so people) to transition into a TOU rate structure. SCE has stated that this is just the pilot project. By 2020, the remaining 90% will be on TOU rate plans.
Why?, one might be asking. Along with other utility companies that serve densely populated areas, SCE has found that the strain on the grid is simply becoming too great to manage at certain times of the week, particularly weekday evenings, when most of the working force gets home and turns on energy-consuming devices. The TOU rate structures thus reflect this strain. During summer, for instance, the price per kilowatt-hour jumps up a whole 20 cents between the hours of 2pm and 8pm. The price jumps are meant to incentivize energy consumers to shift their lifestyle habits so that electricity is being used more broadly throughout the day, rather than the surges of use we are seeing currently.
Meanwhile, solar, on its own, does not necessarily solve this issue. Yes, a solarized home is producing its own energy throughout the day, but the peak hours of production happen when the sun is highest in the sky, from 11am-3pm, roughly. Thus peak energy production has little-to-no overlap with peak energy consumption. Put most simply, you aren't making energy at the same time you're using energy. A solar battery allows you to capture some of that energy produced from your solar panels throughout the day and store it until you need it most - your hours of peak consumption - likely when you get home in the evening. When someone in the energy world is talking about "peak shaving" this is what (s)he is referring to. A battery has the potential to "shave the peak" off of your energy consumption, and therefore significantly lower your electricity costs at the end of the month.
2. People are moving to Solar + Storage because Net Energy Metering (NEM) does not have the same financial benefit it once did.
Since well before the storage craze came around, the utility companies have been offering their energy-producing customers Net Energy Metering (NEM). NEM was a program designed to compensate you, in the form of credit, for the excess energy the solar panels on your roof produce. The utility, with the meter on your home or business, tracks your energy production compared to your energy consumption and, provided the number is a positive one, sends you a "true-up" statement at the end of the year.
In effect, then, NEM has acted something like a battery before home and business battery storage was even around. Excess energy production is "stored" through interconnection to the grid and you are properly rewarded for the otherwise "wasted" energy your solar system produces throughout the day.
That is until a TOU rate plan comes into play. While TOU rates mandate a massive $0.48/kWh charge between the summer hours of 2pm and 8pm, NEM compensates you a meager flat-rate $0.08 for each excess kWh your solar panels produce. Though you might see some credit on that end-of-the-year true-up statement from your utility, it is unlikely it will make up for the peak-hour charges you have already been paying on a month-by-month basis, even with solar on your roof. Conscious consumers are looking at batteries as the more cost-effective option between NEM and storage.
3. People are moving to Solar + Storage because they are looking for a reliable means of energy backup.
Solar, on its own, is, functionally-speaking, a generator. It converts the sun's rays into usable packages of energy. Of course, as previously discussed, solar cannot be considered an on-demand generator. Its use is limited to the hours of sunlight on a given day. You cannot pull electricity from your solar panels on a stormy night when the grid has shut down. (In fact, a solar system cannot produce emergency electricity for a building during a grid blackout unless it has been engineered and installed specifically to be an off-grid system. Back to the point.)
The natural solution to this limitation, then, is to find a means by which you can store that produced energy from your solar panels until you find yourself in a situation when the grid is down and you need energy. You guessed it. Batteries.
In an age when emergency lines of communication and basic household appliances (i.e. stovetops and ovens) increasingly depend on electricity, solar + storage ensures that essential human needs can be met even when the grid cannot provide the energy you need. As we continue to see more unpredictable, more violent storms and other natural disasters, many see the advances in battery storage as a more sustainable, cost-effective way to maintain the functioning and safety of their home or business.
Bonus: pEOPLE ARE MOVING TO SOLAR + sTORAGE BECAUSE THE INCENTIVES HAVE A LIMITED LIFESPAN.
The news has been out for a long time about solar - the federal Investment Tax Credit begins phasing out from 30% next year (2019) to, eventually, just 10% come 2022 for commercial systems and 0% for residential systems. As it turns out, batteries fall under the exact same ITC phaseout structure as their solar counterparts. Assuming 1) they will be charged by a renewable energy generator (i.e. solar panels) and 2) they are owned by the customer, batteries are currently eligible for the 30% ITC, whether or not they are bought in conjunction with the solar system. That changes, however, as soon as 2020, when the ITC falls to 26%.
Additionally, knowing that removing more of the burden off the grid is good for everyone, California currently offers the Self-Generation Incentive Program (SGIP). Under this rebate initiative, customers of both SCE and PG&E are eligible for up to $400/kWh for the first 10kW of the system and then $200/kWh thereafter. Thus a battery with a 10kWh capacity is eligible to receive a $4,000 in rebate. With a battery of this size typically running around $5,500, that's a hefty chunk off the final price! It sends a strong message from California that early solar + storage adopters will be rewarded for their pioneering efforts.
We saw a similar program for solar with California's New Solar Homes Partnership (NSHP) program. The state set apart rebate funds specifically for NSHP incentives back in 2015, but this year (2018), just three years later, marked the program's end with the drying up of all funds. SGIP shares the same structure as NSHP, and with little over $1 million left in the bucket (as of July 2018), we shouldn't expect the incentive program to last much longer. People are sensing the urgency of the situation and buying storage now while they can still reap the existing incentives.
With proven experience in both the ITC and NSHP programs (over $250k of rebate incentive money secured in 2017), Sunrise 805 has positioned itself well to partner with its customers in making sure they benefit from the full reward of adopting solar + storage early. Additionally, with a NABCEP-certified installation team, Sunrise 805 can ensure the solar-battery system will be engineered and implemented flawlessly. Surely, the technology will continue to be refined. But at this price point, with these incentives still in play, it is hard to imagine a more cost-effective point in time to transition into solar + storage.
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