If you have your fingers on the pulse of the solar industry, you’re probably hearing a lot about energy storage. It’s considered by many to be the link between existing renewable technologies, and the 100% renewable energy grid of tomorrow. An energy storage system (ESS) can refer to chemical batteries or the storage of kinetic energy. They can be massive in scale, such as a pumped hydro station, where excess electricity runs a pump that pushes water up a hill to a reservoir. This converts the electricity into kinetic energy. When we need to convert that stored energy back into electricity, the water is released from the high reservoir, passing through turbines as it flows downhill. Energy storage can also be small in scale, like the battery attached to your cell phone that’s probably in your pocket right now. For this post, we’re going to focus on residential energy storage: batteries in your house that can supply energy to the loads in the home.
No matter the scale of energy storage, the driving purpose is the same: we want access to power right when we need to use it. With our cell phone batteries, we draw energy each night from the power grid and sequester it into our futuristic glass rectangles, where the power sits politely so we can use it throughout the day whenever we need it. However, the grid works in a different way. The electricity in the grid does not just sit in the power lines above our homes, waiting until we flip our light switches. In fact, electricity is in a constant state of movement around the grid. The utility company must run complex equations to balance the amount of power they produce, with the amount that’s demanded by consumers. This system usually works reasonably well, but sometimes it can be quite expensive and difficult for utilities to make sure that balance is maintained. That’s why energy storage can be so useful: it can make it much easier to ensure that we’ll have power where we need it and when we need it.
Solar power is an excellent way to generate clean, renewable electricity. The problem is that the sun doesn’t shine 24 hours a day. The solar system can only produce energy in daylight hours. From the perspective of a solar customer, this fact actually doesn’t matter much. Thanks to net metering, solar customers can generate excess power during the day to feedback into the grid. They get credits for the power they feed back into the grid, and they can trade those credits in at night to receive power from the utility. In this way, a solar customer can still offset 100% of their usage, even though not all of their usage occurs in the day time.
So, solar is great during the day… but what about evenings and nights? In order to provide the power needed during peak usage times like the evenings, utilities have to fire up “peaker plants” which are power plants designed to ramp up production quickly and provide extra electricity during a key window. It’s typically much more expensive for utilities to use peaker plants compared with their more stable baseload generators. Some utilities actually charge more for power delivered during peak usage times, so homes with batteries can, therefore, insulate themselves from those peak charges by using stored power instead of drawing from the grid. We also need some energy at night, and solar panels can’t help us with that. Wind energy can be a good solution for night-time power, as the wind often blows more strongly at night than during the day. However, there’s still an important need to keep electricity readily available around the clock, and without energy storage, it’s unlikely that renewables would ever be able to provide that.
This fact is sometimes used as a knock against solar power, and renewables in general. Some people say that the grid could never be supplied entirely from renewables like wind and solar, because there would always need to be traditional power sources for night-time power, and peaker plants that can be switched on and off quickly depending on demand. This is where energy storage can be the key to creating a gird powered entirely by renewables. If we can produce enough extra electricity with renewable sources, and store that electricity for use in peak times or at night…. Then there would be no need for traditional fossil fuel-burning power plants.
Of course, we would need a high penetration of energy storage to achieve this goal. Residential energy storage is a very important piece of this puzzle because it would allow for a distributed network of energy storage systems. Together, these systems could have a major impact on the electricity sector. A new study from the University of Michigan found that by pairing energy storage with renewable energy sources like wind and solar, we could theoretically reduce greenhouse gas emissions by up to 90%.
Another reason that residential energy storage systems have increased in popularity is because of the energy security they offer. Take for example a grid blackout. With a standard solar system, the equipment is designed to shut off in the event of a grid outage. This is a strategy to protect any utility line-men from unexpected surges when they’re working on downed power lines. Therefore, if you have a standard grid-connected PV system, your panels will not operate in the event of a grid outage. With ESS’s, however, loads can be wire directly to the storage system so that they remain electrified during the blackout. In order to remain economically efficient, most ESS customers choose only to back up their most crucial loads like lighting, medical equipment, and refrigeration. As disastrous weather events seem to be increasing in frequency in the US, more and more homeowners are turning to energy storage so they don’t get left in the dark.
Residential energy storage is still a relatively new market, and each utility sets its own rules about how customers can use their storage systems. If you’re considering adding a storage system to your home, be sure to consult with an energy professional to make sure you get the maximum benefit from your system. Just like a residential solar system, a storage system needs to be designed specifically for each home. When designed properly, storage systems provide an option for savings and security that’s unmatched by any other technology.
The United States has the biggest economy in the world in terms of GDP (gross domestic product). We produce the most influential companies in the world, whose names become ubiquitous in languages across the globe. By many standards, America is a global leader, and it stands to reason that we should also lead the world in commercial wind and solar. Companies like Apple, Google, Facebook, and Amazon have all ramped up their procurement of renewables in recent years. However, even with this tremendous growth, the market is so enormous that we’re nowhere near our capacity. If we wish to maintain our economic dominance, businesses should seize control of their energy futures so they can focus on growth.
A recent report from Wood Mackenzie and the American Wind Energy Association (AWEA) illustrates the potential for the commercial renewables market in the United States. The report looks specifically at the electricity consumption of the Fortune 1,000 companies in order to encompass a large share of the US economy. Of all the electricity used by these companies, only around 5% was generated by renewable sources. That means that the corporate renewables market could still expand by 20 times or more. The report forecasts approximately 85 gigawatts of potential renewable energy demand over the next ten years. For perspective, the demand from these 1,000 companies is more than the sum of all existing residential, commercial, and utility-scale solar currently installed in the US.
The corporate world is one where economics is paramount. That makes it a fantastic fit for renewable energy. As corporations forecast their growth into the coming years, they must consider their energy use as a part of the equation. Energy can be a big expense for corporations, and it’s one that’s traditionally difficult to forecast based on unstable electricity rates.
There’s not a person or group in the world that can predict with accuracy what traditional energy rates will look like in the future because public utility commissions can vote to raise rates at any time. A finite supply of fossil fuels means that prices will rise in an inverse relationship with availability, but that’s not the only thing driving up energy prices. Utilities must repair and maintain a vast transmission and distribution network to deliver power from the place where it’s produced to the place where it’s needed. Power companies have no way to recoup these costs other than by raising electricity prices for their customers, and the unfortunate truth is that the grid is aging and in need of some serious investment.
Take for example the largest utility in the country, Pacific Gas and Electric of California. A spark from a faulty transmission wire in Northern California was the cause of the devastating Camp Fire in 2018, in which 85 people lost their lives. The fire torched a bewildering 153,336 acres of land and left thousands of homes and businesses in ashes. The financial burden PG&E incurred because of this tragedy left the company unable to move forward, and so with very little warning, America’s biggest utility filed for bankruptcy.
Volatility like this is just one reason why businesses are turning towards renewable energy sources. While there is often still a utility surcharge to connect to the electricity grid, companies are able to insulate their energy costs from unexpected turbulence in the conventional electricity market. Most renewable energy purchases or power purchase agreements are predictably structured and are therefore more valuable when predicting future energy costs.
An investment in renewables not only stabilizes electricity costs, but it also helps companies brand themselves as forward-thinking and conscientious. If we take America’s largest companies as examples, it’s clear that this image is a desirable trait as far as consumers are concerned. With so much room to grow, and so much incentive to do so, the commercial solar and wind markets should continue to pick up momentum in the coming years.
When most people think about renewable energy, the first thing that comes to mind is environmentalism. It’s true that renewable electricity generators like wind and solar produce no toxic emissions or water contamination, but that’s just one factor that has spurred growth in the renewable sector.
For folks who know a little more about the subject, the next thing to come up might be economics. Since our fossil fuel resources are finite, it’s only logical that traditional power prices will rise in conjunction with fuel scarcity. Therefore, it makes economic sense to invest in renewable generation that requires no traditional fuel input.
These are both great reasons for us to build out our clean power infrastructure, but there’s one more advantage to renewable generation that’s not often discussed: National Security. Electricity has become a crucial element in just about everything we do. It’s essential for communication, food storage, healthcare, and a whole lot more. Without a steady supply of electricity, things could devolve very quickly into chaos. That’s why it’s imperative to have a dependable electricity system, and renewables can help us achieve that.
The fuel for renewables is wind, sunshine, or any other type of energy that’s already present here on Earth. Since the fuel already exists where it’s needed, there’s no need to spend any time or resources collecting or transporting it. There’s also less possibility of an interruption in the supply chain. Take natural gas for instance. Before use in a power plant, that natural gas has to be extracted and shipped to its final destination. If there was a disruption at any point in that supply chain (like a problem with the extraction machinery, or a leak in the transport phase), it could mean that the power plant isn’t able to operate as usual.
In addition to vulnerable supply chains, traditional power generators are also vulnerable to extreme weather or sinister actions. Because the generators are enormous and vital to the power system, taking one offline could mean big problems for the grid. One risk is that the transmission infrastructure around the power plant could be destroyed in an earthquake or other catastrophic events. There’s also a very real risk of terrorists targeting our power supply to cause mass chaos. Because renewable assets tend to be smaller and more widely distributed, the system becomes stronger and more difficult to disrupt.
Another potential risk to our power grid is hacking. Because most of the control systems for power plants were designed before cyber-security became a focal point, they can be vulnerable to malicious actors hacking in and taking control. Renewable energy is less susceptible to these kinds of attacks because the technology is much newer and harder to manipulate. Another benefit is the decentralized nature of renewables, as described in the previous paragraph.
To further illustrate the ways in which renewable energy improves National Security, let’s take the US Department of Defense as an example. The DOD is the single largest user of energy on the planet. That energy is crucial to the purpose of the DOD, which is outlined in their mission statement: “…to provide the military forces needed to deter war and to protect the security of our country.” The DOD turned to renewables early on, due to their flexible and resilient nature. For many military applications, bases are set up in remote or hostile locations where a traditional power supply is not available. Therefore all electricity has to be produced by portable generators, which require a continuous supply of combustible fuel. According to a DOD study in Afghanistan in 2007, 1 in 24 of these fuel convoys resulted in an American casualty. When renewable generators are used in place of traditional ones, the frequency of such fuel convoys can be reduced. As put by Michael McGhee, the Executive Director of U.S. Army Office of Energy Initiatives, “What we are looking at when we see renewables is a self-resupplying power source.” In this way, the deployment of renewable energy makes our troops safer in combat zones.
While renewable energy is certainly helping to increase our national security, there is still much work to be done to fortify our electricity system. In addition to the increased deployment of renewable energy technologies, we also need to address our aging grid infrastructure. By investing in both of these things, we could bolster our energy security and help to protect ourselves from chaotic power outages.
So you’ve gone solar. Congratulations! You’re standing on the sidewalk, arms folded, surveying the new solar panels on your home with quiet approval. You think proudly about the meaningful step you’re taking to fight climate change (not to mention the money you’ll save on your utility bill). Feels pretty good, right? But what happens when you’re ready to move on to your next home? In this article, we’ll discuss your options.
In the US, the average family owns a home for 13.3 years. Some families may own the same homes for generations, while others move around every 2–3 years. Moving is simply a part of life, and that’s why Poly Energy helps make it easy to sell your home with solar. Depending on the ownership agreement on your system, there are a few options you’ll want to consider.
Purchase: You bought the system outright, or got a solar loan to buy the system.
Option 1: Most homeowners simply roll any remaining costs for the system into the sale price of the home. This is attractive to buyers because their new home will include a solar system with no monthly payments. Depending on the system size and the home’s usage, this can often mean no electricity payments at all.
Option 2: You can transfer your solar loan directly to the new home buyers. They’ll assume the monthly loan payments and benefit from a fixed payment structure for their electricity. Some buyers may prefer this option because it keeps the sale price of the home down, and still allows them to budget their electricity costs over a longer period of time.
Option 3: It’s your system. If you want to, you can keep it! Of course, there are charges to remove and reinstall the system, along with any roof repairs that might be needed. However, if you bought the system outright or you’re close to paying it off, this might be an economically sound choice.
Lease/PPA: You pay a monthly bill for the power the equipment produces.
For these contract types, the agreement is fully transferable to the new homeowner. They’ll get all the benefits of solar energy without having to pay any additional money towards the house. At the end of the agreement, they’ll have the option to renew, purchase the system for fair market value, or have the solar company remove the system at no cost.
When it comes to home value, it’s been shown that a solar system increases the sale price of a home by an average of $15,000. The study, from Berkeley Lawrence National Laboratory, looked at 22,000 home sales across 8 states, making this the most comprehensive study of its kind. In addition to the increased sale value, a solar system can also impact homes desirability. A solar system reduces or eliminates electricity costs for the building, and that’s something no other home feature can do.
Apple has surpassed Amazon as the leader in installed commercial solar capacity, according to the 2018 Solar Means Business report from the Solar Energy Industries Association (SEIA). Apple now commands 393.3 MW of installed commercial solar assets. When the same report was released for the 2017 calendar year, Apple’s capacity was 263.3 MW. That means that Apple added an impressive 130 MW in one year. For reference, the state of South Carolina’s total installed commercial solar capacity is about 100 MW. 2018 was also the year in which Apple declared that 100% of its global business is now powered by renewable electricity generation.
There are several reasons why a company like Apple would choose to go 100% renewable. First and foremost let’s look at the most important thing to a corporation: Money. In many places throughout the US, renewable energy is already a more cost-effective bet for companies than drifting along with conventional energy fuel costs. No one knows the future cost curves of coal, natural gas, and oil, but one thing is certain: The price is not coming down. Any Economics 101 class will teach you that a limited resource in high demand will go up in price. Over the long run, that’s certain to be the case with conventional energy production. Renewables, on the other hand, can provide business with predictable electricity costs for years to come. Whether a business purchases the systems themselves or enrolls in a solar lease or loan program, they can effectively hedge their bets against rising energy costs.
Part of the reason for the newfound economic viability of solar is the drop in equipment cost and installation cost. In the last ten years, the cost associated with an on-site commercial solar system has dropped by 63%. The average system size is also trending upwards during that period. The average commercial solar system was just under 117 MW in 2009. In 2015, the average size was 153.6 MW. Now, the latest recorded total shows the average commercial solar system at just over 200 MW per project. As cost goes down and system size goes up, commercial solar will continue to represent an increasingly larger slice of the corporate energy pie.
Another reason businesses are investing in renewable energy is linked to altruistism (or at least, the perception of altruism). Some business have sincere motives to preserve the environment and help fight climate change. Many others simply wish to appear caring and conscious to their customers. It’s also worth noting that businesses like these see themselves as generational brands, who will still be in business many years into the future. Many companies just want to be on the right side of history.
Corporations recognize that climate consciousness is important to their customer bases, so they want to be a part of that movement. Whether the intentions are sincere, or just bets on effective marketing practice, can be tough to discern. Either way, the result is more companies investing in renewables… and it’s been having an impact. In 2018, the electricity generated by commercial solar systems offset 7.5 million metric tons of carbon dioxide that would have been released through conventional generation sources. That’s about the same amount as 1.6 million cars would emit in one year.
The idea of “100% Renewable Energy” for an entire nation is often viewed as something that’s currently unattainable for the electricity grid as a whole. The accuracy of that notion can be debated. On the one hand, there are some difficult problems involving energy storage and the demand curve that make that idea seem impossible. Renewables are dependable generation assets over the long run, but conventional generation is still very much a part of the puzzle. For example, when it comes to ramping up to supply peak demand, natural gas plants are often still the preferred generators. On the other hand, with stronger government support and wider corporate adoption, we can deploy existing technology more widely in pursuit of a 100% renewable target. If storage costs continue to drop, can deploy more batteries to capture power in times of excess generation. With enough batteries, we could supply power whenever it’s needed. When considered in this light, the problem does not seem insurmountable.
For corporations, however, a 100% renewable energy offset target is already possible. Apple, for instance, likely still draws power from the grid. That power can come from any power source. The company offsets that power with renewable generation, thus achieving a net result of 100% renewable power. As the commercial solar market continues to soar, we are likely to see even more companies follow suit with Apple, Amazon, Target, and Walmart.