July 8, 2015

Opportunities and Challenges for Solar+Storage Markets

By Sarah Galbraith

Solar power plus storage is a technology marriage that can work and is working already. Take Puerto Rico, for example, where the power utility installed 10MW of solar power coupled with 1260 kWh of storage. It’s a smart solution for an island with a relatively small power grid, said Ray Hudson, Director of the Solar Segment at DNV GL, during a recent webinar, titled, “Solar + Storage: Capturing Opportunities and Overcoming Challenges.”

The presenters in this webinar pointed to other possible uses of solar+storage, such as a school in California that is seeking to avoid expensive demand charges, or a densely settled solar-powered neighborhood at the end of a long feeder line that uses battery storage to smooth voltage fluctuations and improve power quality, or an industrial plant using battery storage in combination with solar for ramp rate control.

In fact, among all renewable energy technologies, solar+storage is the one with the most activity globally, according to the presenters. They said several application types are pushing sales:

  • The residential market is looking for backup power for critical household loads during a power outage. There is also an emotional component to the residential market as solar power and battery storage are well liked and coveted due to the appeal of energy independence.
  • Commercial applications on the customer side are often driven by demand charge reductions and load shifting for customers under time-of-use rate structures. Islanding capability to keep operations running when the grid goes down and microgrids are emerging as an interest among this market as well.
  • Utilities are increasingly seeing storage as a good thing for themselves and are looking at it as a grid asset as it allows them greater participation in the distributed generation market. Utilities and developers can also benefit from ancillary services provided by storage and capacity deferral through peak load shifting.

Solar+storage is not without challenge, however. Hudson explained that the deployment of solar power and storage would be accelerated by addressing the risks, like a concerns for safety in installations, reliability and performance, and costs of operation and maintenance.

Hudson noted a challenge for financing, specifically: While solar power is a mature technology that is regularly commercially financed, storage is not as mature. Financiers do not yet believe the promises being made by this technology. Independent third-party reviews and high-level reviews of energy storage companies will help boost this confidence, with reliability of the technology being the most critical factor among several listed.

Testing of installed systems is also important to verify performance and standardize safety protocols. There is currently no comprehensive standard for energy storage systems and the majority of tests do not happen at the system level.

These challenges are being addressed, though, through a number of efforts. For example, the work of the Energy Storage Safety Working Group at U.S. DOE is addressing three areas of concern for energy storage: safety validation and risk assessment, codes and standards, and safety outreach and incident response. The testing is being performed at Sandia National Labs and at Pacific Northwest National Labs.

The Electric Power Research Institute hosts the Energy Storage Integration Council, a forum for stakeholders to work together to develop energy storage options for utilities. Safety testing is being conducted by UL and by the National Electrical Manufacturers Association.

Another important market driver is the increasing need for resilient power systems at critical facilities in communities. At Clean Energy Group, its Resilient Power Project is working with states and municipalities to build energy systems that can reliably withstand damaging power outages from increasingly extreme weather events, and solar+storage is an important technology for achieving this goal.

Clean Energy Group’s recent report, “What States Should Do: A Guide to Resilient Power Programs and Policy,” by Project Director Todd Olinsky-Paul, profiles the leading state resilient power programs in California, New Jersey, Connecticut, and Florida, among others. The lessons learned by these state resilient power initiatives offer key recommendations for other states looking to create resilient power programs and projects. These state programs demonstrate that, when properly designed, the combination of energy storage and renewables offers not only environmental and economic benefits, but can also save lives and protect vulnerable populations.

The report also gives the opportunity to look at the big picture created by this first-ever compilation of these program results. In the two and a half years since Superstorm Sandy, for example, Northeastern states have collectively dedicated more than $400 million to resilient power projects, and have leveraged hundreds of millions more in private funds. As a result, in the coming year, more than 90 critical facilities in the northeast, like emergency shelters and wastewater treatment plants, will have resilient electrical systems in development to improve emergency response. These technology options are becoming more competitive in the marketplace and are proving to be cost-effective in parts of the Northeast and across the country.

The key takeaways from the Clean Energy Group report will be discussed during an upcoming webinar on July 14 at 2-3:30 pm ET. Todd Olinsky-Paul will be joined by program staff from Massachusetts Department of Energy Resources and Oregon Department of Energy to summarize the leading state resilient power programs, explore policy and program tools for states to use in supporting resilient power deployment, and make recommendations based on lessons learned from the first years of state resilient power programs.

As solar+storage technology achieves greater adoption, the work of state resilient power programs across the country will serve as a framework to deploy this technology combination in more communities and will help to provide their populations with greater energy security, along with environmental and economic benefits.

Photo Credit


Associated CEG Initiative(s)

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