Energy Storage Could be a Gold Mine for Utility Customers. What’s Holding it Back?

Solar-plus-storage can be a gold mine for residential, commercial and industrial utility customers, says Christopher LaForge, co-instructor of HeatSpring’s 35-Hour NABCEP Advanced Solar Plus Storage: Proposals and Planning course.

But right now, the customers face obstruction from utilities that are intent on retaining old-fashioned utility models, says LaForge, CEO of Great Northern Solar.

Often, the conflict between the two interests plays out at the Public Utility Commissions, says LaForge, the Interstate Renewable Energy Council’s 2016 Master Trainer of the Year.

How Energy Storage is Democratizing

“The trend of development has been a push-pull between utility interests and the interests of commercial, industrial and residential customers. The customers want to save money. Utilities want to dominate through monopolies,” says LaForge, who has been creating renewable energy systems for both grid interactive and off-grid markets for over 30 years. 

One of the most important money makers for utility customers is energy storage, he says. “It’s democratizing to use batteries. The benefits of PV by itself have been multiplied many times by energy storage.”

Frequency Regulation Yields Income

The most lucrative way to use energy storage is by selling frequency regulation into markets like the Regional Greenhouse Gas Initiative, he says.

Frequency regulation involves ramping generation assets up and down to keep frequency on the grid within an acceptable range, according to the Energy Storage Association. However, different resources can do this faster than others. 

“Electricity storage has the capability for doing the job in milliseconds, and Pacific Northwest Laboratory (PNNL) has suggested millisecond electricity storage should have a value of at least twice that of 20-minute assets,” says ESA, which has been pushing for fair compensation for energy storage.

“They buy capacity to meet the requirements of keeping frequency around 60 hertz,” says LaForge. “It’s the biggest money maker around now.” 

Shaving Peak Demand for Dollars

Another way to reap benefits with energy storage is for utility customers to shave peak demand using a smart battery system, which can reduce or eliminate high demand charges from utilities.

“This is a disruptive technology,” says LaForge. “Big utilities have been pushing back and trying to maintain control.”

Another advantage of storage: It can provide resiliency. With PV alone, customers can reduce their energy costs. With PV and energy storage, they can continue to operate when the grid goes down.

Gold Miners Rush to California

“The commercial and industrial side of this is a a gold mine and the gold miners are rushing to California,” LaForge says. That’s because California in 2010 created the first energy storage goal in the nation when it passed AB 2514, which established a target of 1,325 MW of energy storage by 2020 for the state’s three investor-owned utilities, according to Utility Dive. In 2016, under AB 2868, the state added an additional target of 500 MW of behind-the-meter storage, which amounts to 166.6 MW for each investor-owned utility. 

California also created the Self-Generation Incentive Program, which provides incentives for investing in storage. 

However, the advantages for the commercial and industrial customers create disruption for utilities, which lose kilowatt-hour sales and demand-charge income. In addition, they have to grapple with interconnecting the solar and storage to the grid. They’re used to the centralized grid, and many–except for a few exceptions–are slow to change.

“Right now, these systems are penciling out for commercial and industrial clients in a big way and utilities will hurt,” says LaForge.  “There will, however, be ways to create win-win markets for all of these innovations.”

Approved for NABCEP Credit

Mr. LaForge teaches HeatSpring’s 35-Hour NABCEP Advanced Solar Plus Storage: Proposals and Planning course along with co-instructor Chris Brown. The course was recently approved for Advanced PV Hours and CEUs through NABCEP and counts towards all of the NABCEP PV Certifications and CEUs necessary for continuing education re-certification for multiple NABCEP PV Design and Installation Certifications.