Solar & Energy Storage: Technology's Ultimate Symbiotic Relationship
The market for energy storage needs to develop on pace with the gradually increasing challenge of managing clean energy on the grid. Currently, only seven percent of customers have solar, but as that penetration grows it will be an increasing challenge to balance power consumption and supply. Energy storage is the best response. The California Solar & Storage Association is helping to facilitate the integration of distributed energy resources with the grid by creating opportunities for stand-alone storage and solar plus storage.
California’s main vehicle for encouraging customer-sited storage is the Self-Generation Incentive Program, which pays rebates based on energy storage capacity. Many of the rules for SGIP have been up in the air, and our organization and others have pushed for a functioning program that can encourage market transformation for energy storage.
The $500 million SGIP budget is less than halfway subscribed for both residential and commercial project incentives. The program has steadily increased the number of storage projects as developers and manufacturers gain experience and work on soft cost issues. However, there are still significant barriers and untapped potential in this nascent market. We are working to break down interconnection, permitting and regulatory barriers and at the same time are working to create new opportunities within rate design, demand response, deferring grid upgrades, providing grid services, and creating new incentive programs.
Storage Friendly Rates
The California Solar & Storage Association advocates for storage friendly rates while staying true to our roots and ensuring solar projects are compensated fairly. For residential and small commercial projects, storage friendly rates have high differentials between peak and off-peak rates in both the summer and the winter. For larger commercial projects, we have had success advocating for more demand charges to be assessed according to peak demand within TOU peak hours rather than any hour of the month. This makes demand reduction more manageable and helps line up storage behavior with electric system needs. We are also pressing for more dynamic rate design with day-ahead signals for rate swings that are responsive to changing utility costs.
Streamlining Interconnection and Permitting
We work to ensure interconnecting and permitting barriers and delays do not kill your storage project. The utilities have been slowly adjusting to storage on the grid, but there are still significant obstacles, especially for larger projects. Disputes with the utility can lead to year-long delays and the addition of hundred of thousands of dollars in disputed costs. We are working to stop utilities from requiring unnecessary equipment, overcharging customers, and taking months to complete work that should be done quickly.
We are using experience from the solar permitting guidebook process to help streamline storage permitting. Storage is still very new for many local building officials, and the association uses its solar contacts to educate and work with officials on storage.
Storage Multiple Use Applications
Solar and storage have a unique opportunity to provide multiple values to customers and the grid, but the state is creating complicated rules that will govern how one device can provide multiple services. The association is working to unlock revenue streams and making sure the multiple use rules do not get in the way. New and upcoming opportunities include demand response, access to wholesale markets, providing ancillary services and responding to utility RFOs with aggregated local resources. Through all these different opportunities, we are creating a marketplace for energy storage while providing value opportunity for the grid.
Deferring Grid Upgrades
Utilities spend billions of dollars every year on upgrades and maintenance of the distribution system. Some of those upgrades can be avoided by reducing the load on a circuit at particular times. Storage is uniquely positioned to provide this service because it can target energy flow when it is needed the most. Storage providers should be able to propose non-wires alternatives to traditional grid upgrades.