Throughout the United States, utilities are now applying rate structures to residential customers’ electricity bills that have historically been reserved for commercial and industrial customers only. These new rate structures, such as time-of-use (TOU) and peak demand, are significantly increasing electricity bills for residential, commercial and industrial customers alike, and will continue to do so for years to come — not to mention California SB 700, which will result in nearly three GW of energy storage systems at schools, farms, homes, nonprofits and businesses in California by 2026.
Given this trend, the reason to use storage on its own or storage + solar to offset rising utility rates has become more compelling than ever.
Ways to save
Storage is a practical way to save money and protect a home or business from escalating electricity costs in connection to a wide range of unfavorable utility rate structures, including:
- Reductions in the ‘payback rate’ utilities provide for solar power that is exported to the grid;
- Application of demand charges that assess a home or business X times the normal rate for exceeding a certain level of power usage during a given month; or the
- Assignment of time-of-use rates that adjust the cost of electricity throughout the day.
For example, storage alone allows customers on a time-of-use rate or an electric vehicle rate to use grid power to charge their batteries when electricity rates are low (such as at night) and discharge their batteries when rates are at their peak. By enabling home and business owners to shift their use of grid electricity to less expensive times, storage can significantly reduce monthly demand charges.
In the case of solar+storage, TOU can be offset even further. The addition of storage allows home and business owners to store their daytime PV generation for use whenever their energy consumption is greatest — consuming their own power on demand, rather than relying on the utility to value the solar generation they might export or otherwise trust that the utility will provide affordable, unchanging rate structures.
Don’t forget resilience
Beyond these significant day-to-day savings, storage also protects home and business owners from losses when the grid goes down. With extreme weather events, wildfires and other threats to energy security becoming more frequent, storage solutions can be designed to power an entire home or business operation (or just the critical loads) in the event of a power outage.
Many grid-tied solar customers mistakenly believe that they are protected from outages and will have power during a blackout. Grid-tied solar inverters will not operate when grid power is not present. Only through the addition of storage can PV customers continue to access their solar generation when the grid is unavailable. A storage system as small as two batteries and an inverter can allow a home or business to island from the grid during a blackout and ensure that the lights stay on, even when the utility turns them off.
Quite simply, in today’s utility environment, the potential for storage to rein in escalating residential and commercial electricity rates provides a powerful opportunity for solar installers nationwide to realize new revenue streams and greater customer satisfaction.
— Solar Builder magazine