Every new home in California is going solar by 2020. If solar-energy companies have their way, those homes also will come with batteries.
Companies like Tesla and SunRun are starting to bid on utility contracts that would allow them to string together dozens or hundreds of systems that act as an enormous reserve to balance the flow of electricity on the grid. Doing so would accelerate the grid’s transformation from 20th century hub-and-spoke architecture to a transmission network moving electricity among thousands or millions of customers who generate and store their own power. “It’s less like broadcast and more like the internet,” says Haresh Kamath at the Electric Power Research Institute (EPRI).
In theory, networked home-solar-and-battery systems, acting in coordination over a single geographical area, could replace things like natural gas “peaker” plants need to help support the grid on a moment’s notice. But it’s an open question whether it makes financial sense.
California, New York, and Puerto Rico are all in the process of soliciting unconventional grid solutions to “defer or avoid conventional infrastructure investments.” An unconventional method has yet to be done at scale, however, and Federal regulators have declined to sign off, citing the need to study the issue further.
Kamath says renewable mandates could keep home solar-storage solutions for the grid going for a while, but the idea will have to prove itself on the market, perhaps by aggregating large areas, if it wants to seriously compete with existing energy assets.
One of the first tests of that is Vermont’s Green Mountain Power utility, which working with Tesla software to deploy up to 2,000 Powerwall batteries in homes. Customers paying $15 a month (or $1,300 upfront) receive backup power for 10 years, while Green Mountain Power supplies services such as grid stability and extra capacity sold on wholesale electricity markets to reduce customers’ rates. Yet the program has struggled to scale beyond a few users: just 3% of GMP’s customers are using its distributed energy offerings, reports the Rocky Mountain Institute.
A second test is joint effort by SunRun and the British utility National Grid to utilize 200 MW of home storage capacity. SunRun CEO Lynn Jurich says the project will help iron out the right regulatory framework for integrating homeowners’ battery systems with the grid en masse. The company is now bidding on contracts against companies like Tesla in multiple US states for voltage support and ancillary services (although it wouldn’t say for which projects).
SunRun told investors in 2017 that its pilot programs suggest it could competitively generate $2,000 worth of services by managing electricity flow back to the grid. The company has recently dropped its combative stance with utilities dragging their feet on accepting home solar. Instead, it’s pursuing cooperation with the utilities now, in hopes of selling them home-based power. That would allow it grab a chunk of the billions being spent on modernizing the grid. “We don’t want to be in a position of building two competing infrastructures,” SunRun’s Jurich said.
The prospect could prove attractive to utilities interesting in a more cost-efficient distributed power solution that avoids unnecessary transmission and infrastructure. Investment in grid modernization has surged from $8 billion per year to more than $21 billion in the last decade. But with technology changing so fast, regulators and policymakers are worried about investing in the wrong assets. Some US states are slowing or halting programs to reassess. “[Utilities] are very careful about investments these days,” said EPRI’s Kamath . “Agencies want to make sure that’s really needed.”