Early adopters of solar-plus-storage have their eye on “stacking” the benefits of storage, which would allow for storage owners to be compensated by utilities or regional transmission organizations for more than one benefit, says Wes Kennedy, instructor of HeatSpring’s Comprehensive Solar-Plus-Storage course.
While it’s not easy right now for storage owners to get compensated for multiple benefits–peak shaving, demand response, frequency regulation and other capabilities–it’s a goal of the storage industry. And it’s becoming more and more possible.
California regulators recently were the first to pave the way for multiple revenue streams for storage, according to Utility Dive.
Storage makes more economic sense if stacking is possible, says Kennedy.
“Generally, you can help get people thinking about storage as a resiliency or backup play, but more and more, it’s purely a commercial play.” A business may want to use storage to shave peaks and avoid high demand charges, for example, he says. “It’s rare that any one feature makes the business case worth it. It’s about adding potential other revenues streams and throwing in the possibility of resiliency. All that bundled makes projects pencil out.”
The Growing Importance of Energy Resilience
Stacking the benefits of storage would be beneficial to microgrid owners, says Kennedy. He has added microgrids to his course because they’re getting a lot of buzz right now–even though they don’t always pencil out.
A microgrid is generally a group of interconnected loads and distributed energy resources that serve a community, utility, business or home. Microgrids can island from the utility, providing resilience, an important feature given that the U.S. is experiencing more storms that knock out power. Microgrids are capable of providing services to the grid–peak shaving and frequency regulation, for example.
“In the course, I talk about the different types of microgrids,” says Kennedy. “In general, they are island capable and interactive with the grid. The microgrid brings a resiliency aspect that plays well. That can tip a project into the ‘yes’ pile.”
Incentives Driving the Solar-Plus-Storage Market
In addition to energy resilience, incentives are pushing the market forward, says Kennedy.
For example, on the federal level, installing storage with solar at a certain ratio allows storage owners to qualify for the 30 percent investment tax credit available to solar, says Kennedy. “That’s a big driver,” he says.
Also driving the market is a California mandate requiring utilities to acquire 1,900 MW of energy storage, he says. The state also has in place the Self-Generation Incentive Program, which provides incentives aimed at supporting emerging distributed energy resources–especially storage.
Moving Toward the Prosumer Model
What’s more, real-time pricing by utilities can give the market a boost, says Kennedy. It would provide clearer signals about when and how energy storage can benefit the grid. Real-time pricing allows owners of solar and storage systems to know, in real time, a utility’s true costs of producing energy.
Overall, solar-plus-storage promises to help revolutionize how homes and businesses use energy, and help them become “prosumers” who own renewable energy and storage resources that help support the grid.
“The promise of where this is going: There will be a battery in your house, about the same size as your washing machine. You’ll have a smartphone app and get real-time market signals, Everyone will interact with the grid,” says Kennedy. “That’s the prosumer model, and it will be the norm in 10 years,” he says.