AES Storage's SDG&E project is the world's largest lithium-ion battery storage facility.
Advanced energy is on the march, and nowhere is that more obvious than in the energy storage market. From providing flexibility and ancillary services to the grid to ensuring reliability for utilities and back up for electricity customers, energy storage is on the rise everywhere – as seen in headlines all over this week and last. From a study that takes issue with the economics of installing residential solar-plus-storage to a family Down Under that has done just that, to more and better batteries being built across the nation. Charge up and read on!
Last week, Utility Dive reported on a study from Eric Hittinger and Jawad Siddiqui for the Rochester Institute of Technology, which “throws cold water on residential solar-plus-storage economics.” The technology duo that combines the generation of rooftop solar with the storage capacity of a residential-scale battery, has been heralded by many as the next big thing. The economics of such a system, which is to say the price of buying the equipment and hooking it up versus the savings on electricity bills, have been in dispute since before Tesla announced the Powerwall in 2015. Back then, people cautioned that the Powerwall just didn’t make sense for consumers’ bottom lines, to which Elon Musk gave a very Musk-like response: “That doesn’t mean people won’t buy it.”
The most recent study, published earlier this month in Utilities Policy, modeled one year of electricity use for 1,020 simulated houses (with simulated pre-existing solar rooftop arrays) all across the United States to assess off-grid vs. grid-tied economics. The study’s authors took advantage of weather data from the National Renewable Energy Laboratory and demand data from the U.S. Department of Energy and modeled solar-plus-storage systems that would be able to meet the demands of those houses. Peter Maloney, writing in Utility Dive, explains:
It became apparent in setting up the models that the solar-plus-storage system of the off-grid house would have to be significantly overbuilt to meet 100% of energy demand, resulting in high costs. So the researchers assumed a 25% reduction in energy usage for households wanting to go off grid. The 25% reduction could bring down costs by as much as 50%. For parity in the comparisons, they also assumed a 25% reduction in demand for the grid-tied houses.
Overall, Hittinger and Siddiqui conclude that “grid defection is generally an inefficient use of resources” in the United States. For most solar customers, staying connected to the grid (and using it as de facto off-site storage) is still the most cost-effective practice, especially if the area allows for net metering. In most places, Hittinger said, a grid-tied rooftop solar system can use the grid as “an infinitely large battery.”
But what about elsewhere? Choice, the Australian equivalent of Consumer Reports in the U.S., reports on an Australian family that purchased the first Powerwall battery sold in Australia. Last January, the Pfitzner family bought the Tesla Powerwall, along with a 5-kW solar array, a SolarEdge inverter, and a Reposit monitoring system for their home in New South Wales. The entire system cost about $16,790 Australian, which is about $12,800 USD.
Over the past year, the electric system has saved the family 92% on its electricity bill, down from $2,289 in 2015 to $178.71 Australian. Originally, Pfitzner expected the system to pay for itself in a decade and a half, anywhere from 14-18 years. “If it saved me 80% of my power bill, [I thought] it would be pretty good,” Nick Pfitzner said to Choice. At this rate, Pfitzner could pay it off within eight years.
The price of the batteries themselves is expected to drop as well, with AEE member Tesla’s Nevada Gigafactory spinning up production. Also, never one to do things halfway, CNN reported that Tesla is planning to build at least three more Gigafactories in addition to the Sparks, Nev., and Buffalo, N.Y., campuses, to be finalized this year. Of course, the company has given no indication what these other Gigafactories will produce (Gigafactory 1, in Nevada, produces batteries; Gigafactory 2, in New York, will produce solar panels once production starts up later this year) or where they will be located.
Luckily, though, Tesla’s not the only company getting in on the energy storage action. AEE member Alevo announced this week that it would expand its Concord, N.C., production plant. Originally a Philip Morris cigarette factory, the Alevo factory has been operating since late 2014. The expansion will add 200 new jobs to the area and represents a $251 million investment. Alevo plans to work with the North Carolina Works Career Center and the Rowan-Cabarrus Community College to train new workers necessary to run the plant.
Tesla and Alevo aren’t the only AEE members making waves in energy storage. Literally called the “Texas Waves” projects, AEE member E.ON is building more than 20 MW of storage at two of its wind farms in West Texas. AES Storage’s project for San Diego Gas & Electric, which we reported on last month, is now officially open. It is the world’s largest battery storage project, capable of storing up to 120 MWh of electricity.
Elsewhere, other AEE members are also changing the way we generate electricity as well. Midwest Energy News this week reports on the nation’s first “integrated” wind and solar hybrid project. AEE member Juhl Energy developed the Red Lake Falls Project to combine the power of two GE wind turbines (GE is also an AEE member) and a solar PV installation. This wind integrated solar energy (WiSE for short) project allows the two technologies to share a converter. Dan Juhl, founder of Juhl Energy, said that the savings are substantial.
“It reduces the capital costs because you don’t have to have duplicates,” he said. “People have done wind and solar before but you have to have separate converters for them. That means additional capital costs, additional maintenance, additional monitoring systems.”
Between creating new and more cost-effective ways to store electricity, plus creating new and more cost-effective ways to generate electricity, AEE members are at the forefront of the transformation of our electricity grid into one that is more clean, secure, and affordable. To keep up to date on this transformation, be sure to subscribe to AEE Weekly, available for free at the link below:
