Energy Storage + Solar = A Game Changer

March 10, 2014

Key factor seems to be that we expect “grid parity”, the point where solar+storage costs undercut the cost of utility power, – to come within the 30 year lifetime of conventional power plants being built today.

That means potential huge stranded assets for utilities and their shareholders, unless plans are made for a smooth transition to new technology. Based on the record of technological innovation in recent decades, I’d bet that grid-parity will come sooner, rather than later, than projections.

Bloomberg:

The rapid development of rooftop solar and battery storage technology could be as transformative to the economy and modern life as the U.S. oil and gas boom, Energy Secretary Ernest Moniz said.

“It’s pretty dramatic,” Moniz said yesterday in an interview with Bloomberg News at the IHS CERAWeek conference in Houston. “They are growing very, very fast.”

Batteries allow customers with solar panels to store energy during the day and then tap the excess overnight when the sun goes down. The widespread use of electric vehicles could reshape the development of cities, and applying the same battery storage technology to transform the U.S. energy system has “huge potential,” Moniz said.

Battery storage advances could threaten the 100-year-old monopoly utility business model that books about $360 billion in annual power sales. An increasing number of customers are reducing their dependence on the grid, turning to solar panels and battery storage as a way to reduce their bills.

“Storage is a huge deal,” Moniz said.

 MarketWatch:

In the future, we may all be a utility of one.

The demise of the traditional business model of power companies could happen sooner than expected, as solar power plus power storage will combine to make the electrical grid optional for many customers — especially for commercial operations and people in states where electricity costs are high, according to a recent study led by the Rocky Mountain Institute.

“Equipped with a solar-plus-battery system, customers can take or leave traditional utility service with what amounts to a ‘utility in a box,’” the study said. And that would be achieved without decreased reliability or higher prices, a “real, near, and present” threat for utilities.

So far, most alternatives to the good ol’ grid still involve some degree of utility dependance. With improved battery storage in the mix, however, customers could cut the cord entirely.
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In some areas, such as New York and California, commercial customers would reach grid parity sooner. Grid parity would also arrive sooner than predicted depending on further technology improvements, demand-side improvements, and other factors, the study said.

Utilities are, of course, aware of the threat. Some believe that is part of the reason they’ve pushed for fees and other charges to solar customers, as it has happened in Arizona. (The companies contend that all customers, including solar customers, should pitch in to keep grid infrastructure in good shape as a matter of fairness.)

Even before a “mass defection” point, the growing number of early adopters would hurt electricity sales and, in turn, trigger higher electricity prices for those who remain connected to the grid, which would, of course, make cutting the cord even more attractive.

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21 Responses to “Energy Storage + Solar = A Game Changer”


  1. The utility death spiral and solar plus storage at an Economist forum. Check out the answer on reliability at 13:07 and then advice at 15:07.


  2. Storage is only one of many ways to balance the grid.

    -storage
    -demand response with smart grid
    -diversity over large area
    -throttle CCGT, hybrid
    -grid oversight and forecasting
    -V2G

    Some of these can be used on a local basis, local grids and residences can do demand management much more easily.

    Hey! I’ve heard of that guy. Peter Sinclair, right?


  3. The largest market for storage is in peak demand displacement and energy services. One enterprising business found a market for solar plus storage in of all places, the Midwest, by supplying frequency regulation and other valuable services. Balqon and Solar City both supply energy storage. Nissan supplies V2X and has experimented with peak demand shaving. Given that heavy solar penetration depresses daytime demand usage and value, peak time of use shaving needs to be smart. Here is such an example:
    http://cleantechnica.com/2014/03/11/next-wave-utility-innovation/
    Nissan V2X:
    http://green.autoblog.com/2012/05/30/nissan-latest-vehicle-to-grid-leaf-test-supplies-peak-hour-elect/


  4. Balqon energy storage, 34kwhr, 11,950 USD, complete system, 3000 cycles min. That comes out to 11.76c/kwhr over 3000 cycles, no time value of money applied. A more thorough analysis is needed for long term finance with interest and payback. This analysis assumes high number of cycles over short period relative to interest. A point here is that current peak charges in California are 29c/kwhr during 1 to 7PM. That is in addition to pier rates which are much higher going from 13c/kwhr Tier 1 to 32c/kwhr Tier 4 and beyond. Rates can go as higher. Purchasing night rate power or absorbing solar or wind can shift payback to lucrative peak hours. The spread of costs is greater than the storage cost/kwhr. With smart systems the cost effectiveness can be achieved in todays economics and only increases over time.
    http://www.balqon.com/store-2/#!/~/category/id=2860254&offset=0&sort=priceAsc
    Solar City provides a similar unit. With cost decreases due to EV volume, economics will improve greatly.
    http://www.solarcity.com/residential/energy-storage.aspx


  5. Take a look at this article on storage replacing peaker plants. Besides the review of two methods of responding to variable renewables, these are notable because the comments section is a near mirror of comments experience on CC. Here is a comment about solar and peak demand.

    ” Ask one of the GTM analysts how much PV is expected to roll into California over the next 5 years. Should be enough new peak energy to cover what SONGS provided and then some.”
    http://www.greentechmedia.com/articles/read/dueling-charts-of-the-day-peaker-plants-vs.-green-power
    This reference about solar is notable because the topic quickly becomes storage.
    http://www.greentechmedia.com/articles/read/u.s.-solar-market-grows-41-has-record-year-in-2013
    Bob_Wallace David D • 19 hours ago
    I suppose I look at what is happening and see something different.

    First efficiency. We’re dropping demand. And we are likely to be more aggressive along those lines. There is a lot of new technology in the pipeline that will roll out over the next few years.

    Second, even higher rates of wind and solar installation. Plot wind and solar and you see exponential growth. Follow the news and you constantly read about improvements in efficiency and drops in cost. Cheaper = faster installation rates.

    Third, the emergence of storage. It looks like we may already have storage coming on line that will take peaking away from NG. GTM has a story up today.


  6. […] 2014/03/10: PSinclair: Energy Storage + Solar = A Game Changer […]


  7. Reblogged this on Wired Industry and commented:
    Uncontrolled and unmitigated rising costs of solar panels are the greatest obstacle towards its development.

  8. prkralex Says:

    Open water heat pump technology, described as ‘a game changer’ by UK Cabinet Minister Ed Davey, creates heat using abundant solar energy stored in rivers, lakes, reservoirs and the sea. UK has set example creating this on the banks of river Thames.


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