Solar + Batteries = MicroGrid
What is a MicroGrid?
Modern “MicroGrid” systems give you the ability to own your own power source just like the big nationwide grid but in this case it is in your possession and your control. In its simplest version, it is a big battery that can supply all your power needs for a short time or longer. In this case the battery is charged from the public grid.
MicroGrids can be powered by solar panels
The ideal MicroGrid is one that is independent of the public power grid – by being charged by solar panels that are mounted on your roof or your land. The primary advantage is to ensure local, reliable, and affordable energy.
During normal usage, or at times of the primary power grid failure, a microgrid can disconnect from the larger grid and isolate its power generating solar panels and power loads from disturbances on the larger grid. Microgrids can be set up to either be permanently off the public grid OR be on the public grid and be capable of feeding power back to the larger grid.
What is Net Metering?
When your MicroGrid is set up to feed power back to the public grid then the power company has the option to offer net metering – where the power that flows from the public grid turns the meter one way (the way that increases your power bill) and if the solar system pushes power back to the power company the meter turns reverse thus reversing the cost or giving you the NET cost of the power you really consume from the power company.
What is Peak Demand and How can You Avoid it?
Commercial utility customers pay monthly electricity demand charges based on their highest usage, or “peak demand,” within the billing cycle. Peak demand can account for as much as 60 percent of a business’s monthly utility bill.
In San Diego, peak demand drives energy costs from about $20 per kilowatt (kW) at low demand periods to $42 per kW during high demand periods. Energy storage can reduce expensive demand spikes by using energy already stored when needed and can provide reliable backup power during grid disruptions and blackouts.
NEW MANDATES FOR STORAGE
Recent state legislation sets specific goals for energy storage deployment. Generous state rebates are available for addition of energy storage. California is the first to mandate energy storage. Legislation passed in 2014 says 200 MW of the storage mandate is required to be installed “behind the meter” at customer sites.
INCENTIVE PROGRAM RENEWED IN CA
In June 2014 Governor Jerry Brown authorized renewal of the state’s Self-Generation Incentive Program (SGIP) through 2020. The extension authorizes $83 million per year for behind-the-meter generation technologies, including rebates of up to 60% for stand-alone storage systems and those paired with solar or other distributed generation systems.
STORAGE ABOUT THE SIZE OF A REFRIGERATOR
Energy storage systems are typically about the size of a refrigerator and use the latest technology in battery packs charged from on-site solar power or power purchased at nonpeak hours from the grid.
PAYBACK IN 3-5 YEARS
Costs for on-site energy storage systems start at tens of thousands of dollars and go up, but can achieve payback in as few as three to five years through California rebates, federal tax credits and utility savings achieved by time-shifting energy consumption and avoiding high peak demand charges.
Most suppliers also offer leases or power purchase agreements that avoid or lower up-front costs and provide monthly payments businesses can cover with utility bill savings. Recently, some companies have started offering to install, operate and maintain systems with a revenue-sharing agreement based on utility bill savings.
TEST IN SACRAMENTO
Sunverge’s first major test started last August in Sacramento at a small urban housing development called 2500 R Midtown. They outfitted 34 energy-efficient homes with individual 2-kilowatt solar systems connected to energy storage. Developer Pacific Housing and Sunverge have joined with the Sacramento Municipal Utility District to evaluate the benefits of solar energy storage systems.
TEST IN SAN DIEGO
Pacific Housing develops low-income housing throughout California. In San Diego, they contracted with Sunverge to install a solar energy storage system at the affordable apartment community Carlton Country Club Villas in Santee. A 3.2-kilowatt solar system combined with 4.5 kilowatts of energy storage serves the property’s office and outdoor common area lighting to help lower management costs.
The system maximizes savings by taking advantage of SDG&E’s small commercial time-of-use tariff to offset site demand during peak pricing periods with excess solar generation. Carlton Country Club Villas is saving about 20 percent annually on their common area utility bill after paying the lease for the system, which would have cost about $40,000 to purchase. Sunverge utilizes third-party lease financing, which allowed the project owner to receive a $10,800 rebate from the SGIP for the battery storage equipment and take advantage of the federal solar investment tax credit.
According to Rebecca Feuerlicht, SGIP manager in San Diego, some $415 million of rebate funds are available from the program through 2020. For energy storage systems less than 30 kilowatts, incentives are paid up front, while those over 30 kilowatts are paid half up front and half based on performance over five years. Currently rebates are $1.46 per watt based on a two-hour rating for batteries. A 20-kilowatt-hour battery system discharged over two hours would yield a 10-kilowatt rating times $1.46 for a $14,600 rebate.