POWER March 2021 - 18

FOCUS ON O&M
Explained that way, it seems like you're
paying more for less.
But while storage might add to the initial
cost of a solar solution, it allows heavy
energy consumers to address a greater
percentage of their electricity costs. With
just a solar solution, you might be able to
offset 60% of your bill-the volumetric
charges. Storage allows you to potentially
address another 35%, which is based on
capacity and demand charges.
Thus, while the overall cost of the solar
and storage system is higher, the aggregate
cost of the system and the charges
from the incumbent utility are lower, providing
a net benefit. Larger energy consumers
are charged for both the kWh
they consume, as well as the maximum
amount of energy they need available at
any time. Storage enables the system to
lower the cost of peak demand by storing
energy at off-peak times when it's
cheaper, and dispatching it during peak
times when it's worth more, often saving
on both peak energy and maximum
demand costs simultaneously.
Calculating the Cost Savings
Measuring the value of storage is a bit
more complex than showing the value of
a solar array. Rather than showing generation
from a single meter (as you do
with solar), you need to triangulate the
meters on the solar and storage project
with the utility meter to recreate what
electricity costs would have been in the
absence of storage. The value is in subtracting
the costs of status quo operation
from your electric bill.
Finding historical data to estimate savings
ahead of time can be challenging.
It's easy to see on a bill how many kWh
a facility used over a year, but with storage,
you need all the data over 15-minute
intervals. While this data is becoming increasingly
more accessible, it can still be
tough to collect efficiently.
Fortunately, there are software platforms
that digest data from 3,000 different
utilities. This allows your partner to
analyze the potential value of storage,
and propose a certain system size. It all
rides on the shape of the load and how
much potential value storage can add
based on your peaks in usage.
Location plays a major role in the value
of storage. In areas with utilities that use
dynamic, variable time-of-use energy
and demand rates, and especially in areas
with a combination of incentives and
regulatory policies that favor storage, it
can deliver a lot of value. California has
led the way in terms of incentive and
18
policy programs that have since made
their way to New York, Massachusetts,
and other states.
In California, there has been strong
demand for storage solutions from
school districts (Figure 4), which needed
a way to cover that extra 35% of their
energy bill for demand charges. While
the volumetric charges were growing
eration, you can level out that spike, then
recharge the battery during the middle of
day to prepare for the next morning, or to
capture arbitrage opportunities.
In an office building or a big box store,
for example, you might have spikes at
the start and end of the day, with heating,
ventilation, and air conditioning
ramping up or elevators running as emA
fast way to rapidly determine a good
candidate for storage is to divide the
total kWh used by the highest usage to
get a sense of the load factor.
at 2% to 3% annually, demand charges
were escalating at 10% in recent years.
So, not only was it a huge residual cost,
it was likely costs would continue to
grow swiftly over time. Adding a storage
solution to save money now, while
also hedging against future utility costs,
which historically go in one direction,
was common sense.
While the value of storage depends
on a number of factors, schools are one
type of facility whose energy usage falls
into patterns that make storage a viable
addition. A fast way to rapidly determine
a good candidate for storage is to divide
the total kWh used by the highest usage
to get a sense of the load factor, calculable
from a monthly electric bill. With
more granular interval data, the value can
be honed more precisely, and visualized
in outputs such as graphs, to show the
peaks and valleys throughout the day.
Load Curves and Peak Shaving
For a combined solar and storage project,
we also integrate the timing of our
projected solar generation, which can
make the load curve choppier, because
the energy needs to be used as soon as
it's produced. With storage projects, you
can shape the curve any way you'd like.
For example, you may want to shape the
curve in a way that mitigates prevailing
utility tariffs now, and in the future, while
also capturing rapidly growing revenue
opportunities for storage.
Schools and office buildings have discrete
operating hours and predictable
patterns, so their load profile typically
looks like a sine wave. At a school, there
might be a spike in the morning when
students arrive. By discharging stored
energy in the morning before solar genwww.powermag.com
ployees
or customers arrive and depart
buildings. In this case, the load profile
might look more like a suspension bridge
with two peaks and a lull in the middle.
With storage, you can flatten the towers
of that bridge.
On the flip side, if you have a manufacturing
facility that's more or less running
around the clock, it's difficult to predict
the peak and flatten it with a two- or
four-hour battery. It's like playing whacka-mole.
On a sunny day, you could have
a peak at 3 p.m. when the air conditioning
starts cranking. You might be able to
reduce that peak from 3 p.m. to 5 p.m.,
but when the battery runs out of juice at
5 p.m., that becomes the new spike if
operations persist for an extended period,
such as in manufacturing operations
working three shifts each day.
Storage makes the most sense when
your facility has a limited time period
when electricity usage is high-a limited
load factor-and when you're pursuing
a solar-plus-storage project, which allows
you to apply the federal investment
tax credit. Tax equity financiers also can
help bridge gaps, as they typically have a
more-efficient cost of capital than alternate
financing vehicles, enabling a lower
cost for storage services.
There are a number of considerations
around the value of storage, from your
energy consumption to your utility's
capacity and demand charges to your
state's incentives and regulations.
When the right factors align, storage
can be a valuable addition to a solar solution,
helping from both an operational
and economic standpoint. ■
-Matt Kaufmann is senior director of
Energy Storage Solutions at Distributed
Solar Development (DSD).
POWER | March 2021
http://www.powermag.com
POWER March 2021

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