Tesla-led battery storage set to boost renewable energy, efficiency, reduce costs

The business of solar energy steadily expands, spurred by improved technology, and creating a race to design the most-efficient battery for storing excess power, enabling consumers to spread demand and defray costs.

Capacious and reliable storage of solar-generated power, whether utility- or home-scale, smooths out weather-related and overnight disruptions, and reduces vulnerability to grid outages, meaning it also provides a measure of “grid stabilization.” Storage can also speed payback periods for array owners and mitigate exposure to price fluctuations in a volatile energy market.

Storage is largely accomplished through serially linked batteries, increasingly made of lithium ion. Technology has rapidly shrunk and streamlined the units, enabling easier handling and better retention.

Developers have created fiendishly clever alternatives, however, simply based on the idea of converting potential energy into kinetic energy. One example is ice storage, whereby excess solar energy generated during the day freezes tanks of water, which slowly melts overnight, cooling the refrigerant in air-conditioning systems, reducing demand for power from the grid.

Equally, wind power generated by commercial installations overnight – when few consumers use it – can freeze tanks of water to reduce daytime air-conditioning loads.

Some ice-based energy-storage units boast a 20-year life and operate at less than half the cost of battery storage.

Alternatively, engineers in Denmark’s Faroe Islands pump water into a hilltop reservoir overnight, then during the day drain it through a series of pipes and pumps back to sea level, powering turbines and transformers.

Locally, James Whittaker, founder of solar designer and installer GreenTech Solar, and chairman of the Cayman Renewable Energy Association, says storage has only recently become practical for small-array owners.

“Pricing-wise, energy storage has become viable in terms of being affordable, reliable – with 10-year type warranties – within the last two years,” he says.

Most storage systems, he says, are used as back-ups during outages or other problems in the national grid, and are cheaper than traditional generation alternatives. The primary challenge to date has been high global demand and limited availability, but supply is beginning to catch up, he says: “We expect to see hundreds of storage systems deployed here in Cayman [during] the next 12 months to 24 months starting in summer this year.”

Another significant challenge, he says, is “creating the right regulations and consumer options to advance the adoption of battery systems,” which includes import-duty waivers and CUC agreement to include storage systems as part of its Consumer Owned Renewable Energy program for private solar arrays.

A January report by U.S.-based Wood Mackenzie Research, a leading power-industry analyst, said residential, grid-linked battery-storage in the U.S. for the first time outnumbered new grid-independent storage systems in 2017. By the end of 2017, Wood Mackenzie reported, those installations may make up 57 percent of annual storage deployments and 99 percent by 2022.

The upbeat mood about residential storage is undiminished on the commercial side: “In our market, storage is really coming on in the industrial space as costs come down,” said Kent Harle, CEO of San Diego-based Stellar Solar.

Counterpart Scott Wiater, CEO of Maryland-based Standard Solar, which built an early commercial design combining solar and storage, says he’s excited about the prospects.

“I think storage looks a lot like the early days of solar, so we’re hopeful that the price curves follow what happened with solar to become viable,” he says, anticipating sharp cost reductions as now-nascent technology improves.

Eight-year-old Massachusetts-based Solect Energy has installed more than 65 megawatts of commercial and institutional solar generation, and in December, seeing a widening market, opened an energy-storage division.

Solect Senior Vice President Scott Howe told Solar Power World he “had a lot of customers interested in storage. We’ve kind of held them off because Massachusetts is going through a whole evaluation right now … but … it’s all starting to come together.”

Pointing to demand billing charges, similar to those introduced locally in January by the Caribbean Utilities Company for “large commercial customers,” Howe said he expected to tap “a lot of commercial customers because the demand charges are very high.”

Both commercial and residential storage reduces those charges by shifting peak demand. Solect, Howe said, would target “efforts to shred demand through storage,” meaning “I think commercial storage will be a pretty good market for us.”

GreenTech’s Whittaker says storage technology has come a long way – recently and dramatically improved by Seattle mega-entrepreneur Elon Musk, famous for his Tesla electric vehicles and now for his sleek Powerwall storage units.

“Batteries have been around a long time,” Whittaker says, but “it’s just in the last few years with lithium ion technology and the mass scaling-up of that technology that companies like Tesla have been doing that these systems are now economic and reliable for consumers.

“Early battery systems were typically lead acid or gel batteries. They were very unreliable; they required a lot of maintenance; they took up a lot of space; you often had to build a special ventilated room; and, overall, those systems had a relatively short shelf life.

“Warranties were typically three years. Today, lithium ion technology is much more reliable and power dense and, thusly, the economics are much better for consumers. Other technologies are around the corner to improve yet again on lithium ion, such as solid-state batteries” – and even more exotic alternatives like redox-flow and zinc-hybrid ion batteries – “but these are likely a decade away from mass commercial production,” he says.

Lithium ion technology is also used in electric vehicle batteries, giving carmakers a potential role in residential storage.

Boris von Bormann, CEO of Mercedes-Benz Energy Americas, said in 2016 the company would compete with Tesla’s Powerwall, expanding its European-based stationary energy-storage business to the U.S, using its existing lithium ion EV technology.

The Powerwall weighs 276 pounds; is 29 inches wide, 44 inches long and 5.5 inches deep; and has a capacity of 13.5 kilowatt hours, discharging 7 kWh when pushed to its peak and 5 kWh continuously.

Scalable to as many as 10 units in sequence, the sleek, enamelled rectangles designed with gently curved lines, come in deep blue, “luxurious” black, grey, signal red and “the neutrality of white with a touch of daring that only purple can provide,” according to one Powerwall review on theverge.com, noting the glossy, violet highlights on the reflective ivory-hued surface.

Powerwall’s industrial-size Powerpack counterpart, boasting nearly unlimited scalability, is for commercial or electric utility-grid use, addressing “peak [demand] shaving, load shifting, backup power, demand response, microgrids, renewable power integration, frequency regulation, and voltage control,” according to one testimonial.

Whittaker says GreenTech Solar is Tesla’s “local certified installer,” and “has been designing all of its SunPower solar panel systems to accept the Tesla batteries.

“As such,” he says, “all GreenTech existing customers are able to add the battery with no issues. We can also retrofit any home or any solar system with the Tesla battery systems as well with some minimal design changes.”

Energy-storage systems typically vary between 5 kWh to 15 kWh, he says, and costs range between $8,000 and $15,000. Tesla is at the lower end, “typically around $9,000,” but Whittaker cautions that installation “has to include more than just the battery; it also typically includes a gateway, subpanel, design and Installation.”

Prices are likely to diminish, but only slowly, he says, “Demand vastly exceeds supply and also we have been waiting on regulatory changes to take effect such as including batteries as part of the renewable-energy systems that are duty-free, as well as forms required from CUC to include battery systems with existing CORE [Consumer Owned Renewable Energy, CUC’s subsidised program for private arrays] solar systems. These changes are in process as we speak and should be finalized within the next few weeks.”

He expects the first Tesla Powerwalls to arrive in the second quarter, “and [we] expect to start installing these systems around summer.

“These will be the first such energy-storage systems in the Cayman Islands and among the first in the Caribbean region,” he says. “It represents a turning point for renewables in Cayman in many ways looking into the future.

“We have approximately 60 systems currently on order for Cayman and 90 for Antigua. I expect there to be thousands of Powerwall battery systems deployed here over the next 10 years. It makes too much financial sense not to do so and these batteries can provide a win-win situation for everyone involved, including the local utility.”

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