Americans Move to Generate, Store Energy

February 21, 2022

Utilities beware – your monopoly model may not be viable in a decade. With rising tensions in Europe, Americans just got new incentive to invest in self generation and storage of electricity.

Wall Street Journal:

As the American electric grid becomes less dependable, a growing number of businesses and homeowners are buying their own power systems to protect themselves from being left in the dark.

Twenty years ago, only 0.57% of U.S. homes worth $150,000 or more had installed backup generators, mainly along hurricane-prone coastlines, according to backup-power provider Generac Holdings Inc.GNRC -2.66% Now the number is 5.75%, a 10-fold increase.

Manufacturers delivered more than 143,000 generators last year in North America, up from 138,778 in 2015, despite pandemic-related supply-chain logjams, said Lucrecia Gomez, a research director at consulting firm Frost & Sullivan. Microgrids, which can create islands of power for campuses, businesses or neighborhoods amid a blackout, grew more than sevenfold between 2010 and 2019, according to the industry group Edison Electric Institute.

Many entrepreneurs now consider secondary power systems to be a necessary cost of doing business. Steve Peterson, who owns Hungry Howie’s Pizza franchises in Michigan, learned their value in 2003, when a massive blackout knocked out power to much of the Midwest and Northeast. Mr. Peterson had invested in backup generation—and said he had lines of people who wanted a hot meal stretching 200 to 300 feet out the door.

“It was like people were waiting in line for concert tickets,” Mr. Peterson said, adding that the generators paid for themselves in a few days. Since then he has grown from about four locations to 15 in Michigan, all with backup power. 

New systems cost around $25,000 per location, he said, but help avoid the seven to eight power outages each year that would otherwise cause him to throw out food. “You can sleep at night,” he said.

Reliability isn’t the only driver of the power-independence trend. The cost of renewables have fallen enough that some companies are adding on-site renewable energy to reduce their use of power from the electric grid or to meet corporate sustainability goals.

Whirlpool Corp. installed wind turbines near a dishwasher factory in Findlay, Ohio, where a large share of electricity generation comes from coal, after it started tracking its greenhouse gas emissions. The turbines don’t supply all of the factory’s power, but provide electricity at a locked-in price for 20 years. 

“It’s not just green,” said Ron Voglewede, global sustainability lead at Whirlpool. “It’s also just cheaper.”

The ability to add battery systems to homes to store large amounts of power is a relatively new market, tied to the rise in solar-panel installation. While battery costs have plummeted, adding them often extends the time it takes for home solar to pay off, said Chloe Holden, an analyst with Wood Mackenzie. People are installing them nonetheless.

“Residential energy storage deployment in the U.S. is driven by concerns about power outages,” Ms. Holden said. “That’s usually what drives people to get batteries.”

Houston Chronicle:

Bryan is among thousands of Texans who have turned to solar power and battery storage, creating so-called microgrids, as a solution to blackouts. With a venture creating the same little power plants for apartment buildings, Texas has become a national leader in residential solar power installations.

From 2019 to 2020, small-scale solar capacity in Texas grew by 63 percent, to 1,093 megawatts from 670 megawatts, according to the Energy Information Administration. In the first three quarters of 2021, another 250 megawatts of residential solar were installed in the state, according to the Solar Energy Industries Association. In last year’s third quarter alone, Texas ranked second behind California in the amount of power from new installations during the period, the industry’s Washington, D.C. trade group said.

Surging demand for residential solar power in Texas after the February 2021 freeze put pressure on installers to keep up, said Abigail Hopper, president and CEO of the association. The race to buy new rooftop panels has slowed some, she said, but Texas remains among the top three states for new installations. And the shrinking price of solar cells will help support its growing popularity, Hopper said.

“I think as more and more Americans really struggle with the impact of severe weather — everything from fires, the cold, hurricanes, droughts — and see the impacts on power and power outages, you’re going to continue to see folks looking for resiliency,” Hopper said.

Rooftop solar systems and other residential generators like those powered by diesel or batteries can create microgrids to power an individual house or be linked to others in a neighborhood. They can operate as part of the main power grid — like the one managed by the Electric Reliability Council of Texas that almost collapsed last year — or they can disconnect and be managed autonomously during a power outage.

The flip of a switch can disconnect a microgrid from the larger utility, says Stephen Bayne, department chair of electrical and computer engineering at Texas Tech University. It can be as simple as a breaker in a garage or a computer system that automatically disconnects from the grid when there’s a disruption. More advanced microgrid systems, sometimes known as virtual power plants, can track usage, generation and battery storage across multiple buildings. It also prevents the microgrid’s power from flowing to the wider grid during emergencies.

“So let’s say the grid has to turn off for some reason, say in Houston you had flooding and part of grid is underwater, but not a certain community,” Bayne said. “That area could still lose power for days, but if the community had a microgrid, it could disconnect and use a diesel generator, battery storage, solar — it could keep grid going, or at least keep critical loads going for a while.”

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