Midwest Values: How to identify market opportunities outside of solar hotbeds

A good starting point for identifying an advantageous solar market is to look at the average retail cost of electricity. For behind-the-meter (BTM) solar projects, high retail electricity prices enable solar project economics to look more attractive. The opposite is also true. Low prices make it hard for projects to pencil out. This is a primary reason why the Midwest rooftop solar market has lagged behind other regions of the country that have experienced more rapid growth.

The U.S. Energy Information Administration (EIA) is a great resource for sourcing impartial information on energy costs throughout the country. EIA publishes a monthly report which shows the average price of electricity for each state by sector of use. Below is a summary of EIA energy cost data for the five biggest Midwestern states, in comparison to California, the leading BTM solar state in the country.

energy toolbase

Looking at the average retail electricity price by state provides a high-level filter for identifying viable BTM solar market opportunities. But the statewide average blended rate does not tell the full story. In order to really pinpoint tangible customer opportunities, we need to look at both the utility level and rate tariff level. It is not uncommon for there to be a wide amount of variance between different rate schedules within a given state. For example, the average residential cost of electricity could be 13 cents per kilowatt-hour, but specific rate schedules could range from under $0.10/kWh to over $0.20/kWh.

retail electricity prices

It’s also important to point out that the average cost of electricity is not the same as the average blended savings of a solar project. When it comes to quantifying how much solar is worth, average blended savings, which is sometimes referred to as the value of solar, is the truest representation of value. The calculation for average blended savings is very simple: first year dollar savings divided by total first year solar production. This expresses the value of solar on a $/kWh basis. We published a video tutorial entitled “How to Accurately Calculate the Avoided Cost of a Solar Project,” which explores this concept in depth.

Accurately calculating the value of solar for a specific customer requires good software. This is especially true in instances where the utility rate tariff is complex, like a rate schedule that has time-of-use (TOU) rates, demand charges or an inclining or declining block structure. Energy Toolbase specializes in objectively quantifying the avoided cost on complicated rate structures. Our software platform is used by solar companies of all shapes and sizes in markets throughout the United States to accurately and transparently determine savings for a given customer. Let’s look at two rate schedules in the state of Illinois.

illinois rate schedules

The Ameren Illinois Co. rate schedule features a declining block structure, meaning the energy used above the 800 kWh threshold is priced at a lower rate. Assuming a high usage customer of 1,250 kWh month of usage, Energy Toolbase calculated the customer’s average blended cost of energy at $0.114/kWh. Assuming an 11.2 kW DC solar system, which offsets 90 percent of annual kWh usage, the value of solar is calculated at $0.102/kWh. Note: In a deregulated state like Illinois, be mindful of which entity is billing the generation supply charge, which will affect the customers’ $/kWh volumetric energy rate.

The ComEd, BES-Medium schedule is a typical C&I rate in that it has $/kWh energy, $/kW demand, and $ fixed charges. Assuming a customer uses 10,000 kWh month and a peak demand of 50 kW, Energy Toolbase calculated the customers average blended cost at $0.108/kWh. Assuming an 80 kW DC rated solar system, offsetting 80 percent of annual kWh usage, the value of solar would come in at $0.079/kWh.

These are two generalized examples. Other customers on these same rates could have very different average blended cost and value of solar calculations, especially if the $/kWh generation supply charge was meaningfully different. Therefore, when searching for favorable market opportunities we recommend running several sample projects to establish the range for both cost and savings.

Adam Gerza is the COO of Energy Toolbase, a software platform for modeling and proposing the economics of solar and energy storage projects. To learn more about Energy Toolbase and sign up for a free trial, visit www.energytoolbase.com.

— Solar Builder magazine

Solar + Sharing: Connect groups of homeowners, renters via one solar + storage network

lithium-ion batteries

The EnSync Home Energy System includes high-efficiency “LFP” lithium-ion batteries, a Matrix Energy Management system with 9-kWac output capacity, modular energy storage capacity of 9-kWh increments, modular DC-DC converters and the DER Flex Internet of Energy control platform.

Brad Hansen, president and CEO of EnSync Energy Systems, believes solar + storage for the home is still “in the dark ages.” EnSync Energy Systems has built a reputation for deploying high-value distributed energy resources (DERs) in the C&I segment. So why is Hansen discussing residential solar + storage? Well, EnSync has just launched a Home Energy System that will not only address some of the antiquated architecture of current home storage systems but also invent an entirely new project design concept.

At the basic level, the EnSync Home Energy System combines solar, energy storage, power electronics and Internet of Energy control into one platform. It has the advantage of leveraging technology and lessons learned from EnSync’s C&I business to achieve an outcome like lessening thermal stability concerns of repackaged lithium-ion batteries that are often used in a home energy storage applications. Instead, EnSync pairs a residential-scale version of its modular Matrix Energy Management system with thermally resilient lithium-ion batteries and its DER Flex Internet of Energy solution that are all designed to work together.

“Most [current systems] are significantly underpowered and cannot support the entire home if the grid electricity is out, or they have issues disconnecting and reconnecting to the grid during an outage,” Hansen says. “If the home is off-grid, many cannot reliably perform if high inrush currents are created by the start-up of appliances like refrigerators or air conditioners.”

Peer-to-peer exchange

This is the part that could change the sector. The EnSync Home Energy System introduces True Peer-to-Peer energy exchange technology. The goal here is to enable individual residential units in a property to be linked into a network behind the utility meter to provide highly efficient, direct energy exchange between units. Suddenly property developers, property managers and homeowners’ associations can provide seamless and economical transfer of excess energy from any given residence to any other residence in the network with excess demand via EnSync’s DC-Link.

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“The future of the electricity market will be individual homes and building owners operating in a ‘spot market’ for the buying and selling of electricity across a network,” Hansen says. “At EnSync, our mission for the company is simple: the democratization of energy through innovative and economic energy systems. Homeowners and property owners that install our products today do so with the confidence that as the market for energy continues to be radically changed, they are not only prepared for it, but can capitalize on it and profit from it.”

A single residence, multifamily building or entire neighborhood could reduce consumption on the grid and possibly open up a new revenue stream. The sharing of electricity between interconnected residences on a True Peer-to-Peer energy exchange network prioritizes the use of solar generated or stored electricity ahead of that from the utility grid for any residence in the network. The network can also be configured as “non-export,” meaning no excess generation for any unit goes back to the utility grid. This capability is becoming more critical as several states and jurisdictions prohibit or economically penalize energy export.

Additionally, many utilities are in the early stages of implementing time-of-day electricity rates and are already levying punitive demand charges on customers. The evolving rate structures and impact of resident vacancy rates, vacation schedules and time-of-day load profiles frequently make deploying solar generation uneconomical for large portions of property development. Virtual net-metering and virtual peer-to-peer programs are fraught with excessive complexity and administrative overhead.

EnSync will initially target the multi-residential property market for its solution, and then broaden its market presence. At the time of launch, the company had already built a sizable order backlog for the EnSync Home Energy System. The Michaels Development Co. was the first to sign a 20-year PPA to build a solar and energy storage system at the Keahumoa Place affordable housing development, a greenfield project in Hawaii that is expected to complete construction in 2019. Savings from the PPA will finance the construction of a 750-kW PV panel-covered canopy that will simultaneously produce energy and shade the development’s parking lot, as well as a 500-kW hour energy storage system, with individual modules interconnected by the proprietary True Peer-to-Peer DC-Link behind each unit’s utility meter.

“True Peer-to-Peer revolutionizes the economics of solar + storage in residential properties like Keahumoa, by dramatically reducing the negative impacts of vacancy rates, absence during peak generation times, vacation schedules and micro-loading effects within each unit from appliances such as refrigerators and air conditioners,” Hansen says.

— Solar Builder magazine

Sunrun provides details on its Florida solar leasing plan — big emphasis on storage

sunrun logo

Sunrun Inc. made the push to change Florida’s rules concerning solar leases and is now officially ready to offer solar-as-a-service and its Brightbox home battery in the Sunshine State. Beginning June 7, Floridians will be able to lease solar equipment that enables them to create their own solar electricity year-round using their rooftop, as well as the Brightbox home battery system, that keeps lights on during power outages this hurricane season. Sunrun is the nation’s largest residential solar, storage and energy services company.

Home solar is expected to continue its expansion in Florida through this offering, with Sunrun aiming to bring hundreds of jobs to the state in the coming years.

“Freedom is a value Americans hold dear. In offering Floridians solar-as-a-service, households in the Sunshine State are given the freedom to make, control, and store their own energy,” said Lynn Jurich, Chief Executive Officer and co-founder of Sunrun. “Unfortunately, too many Floridians have experienced first hand the effects of extreme weather and power outages. Home solar and batteries provide peace of mind and backup power when disaster strikes, keeping food fresh and the lights on.”

RELATED: Time for use? How to prepare PV systems today for storage tomorrow

Sunrun’s solar-as-a-service product in Florida is an affordable, easy and reliable way for people to power their homes without dealing with the upfront cost of solar panels, equipment and installation. Sunrun also fully maintains and insures the system, offering households an accessible and hassle-free option for going solar.

In addition to solar-as-a-service, Sunrun will also begin offering its home solar and battery system, Brightbox. Brightbox provides backup electricity to households in the event of a power outage. During Hurricane Irma, more than 15 million Floridians lost power. This translates to more than 70 percent of the state’s population. In total, there were more than 14 collective days without power in Florida in 2017, coming from 79 individual outages. Brightbox enables households to power through storms and outages.

Unlike a generator, Brightbox is recharged daily by the sun and reliably delivers clean electricity. This home battery system can replace noisy natural gas or diesel generators commonly used for backup power, and could have significant health and community benefits in Florida.

“Sunrun’s new solar lease will give Central Florida residents greater access clean energy choices, lower energy costs, and continued momentum for local job growth in our state’s renewable energy market,” State Senator Linda Stewart (D-Orlando) said. “This is the Sunshine State and Floridians should be able to take full advantage of an abundant, emissions-free energy source that contributes to a healthier community while remaining affordable.”

“As an advocate for consumer choice, I am excited to see new options for Floridians that will make solar more affordable and accessible to residents across the state,” said State Senator Jeff Brandes (R-St. Petersburg). “With our population projected to grow by five million people by 2030, the time for Floridians to invest in energy diversity is now.”

Sunrun now has a presence in 23 states and the District of Columbia.

— Solar Builder magazine

Panasonic now offering beefed up battery for residential solar + storage (17.1 kWh of capacity)

pika solar storage

Panasonic Eco Solutions of North America sent word of a significant upgrade to the Harbor Smart Battery portfolio with the Harbor Plus Smart Battery, which now clocks in as the solar industry’s most powerful and efficient smart battery with 17.1 kilowatt hours (kWh) of capacity and real power output of up to 10 kilowatts (kW). Additionally, the Harbor Plus Smart Battery now delivers 21 percent more energy and 30 percent more peak power than the next leading home smart-battery solution, enabling homeowners to extend solar power longevity, better manage energy around peak-rate periods and withstand off-grid scenarios at a more cost-effective price per kWh of storage.

Panasonic and Pika Energy first co-developed the Harbor portfolio of residential smart batteries in 2017, and less than a year later, the companies are introducing upgraded capacity with the premium Harbor Plus as well as the entry-level Harbor Flex to deploy more power, efficiency and capability than any other solar smart batteries available on the market.

“The solar industry faces the reality of certain maximum energy density, pushing the market to deliver innovative and disruptive solar solutions to a quickly growing consumer base,” said Dan Silver, vice president, Panasonic Eco Solutions North America. “We are excited to once again partner with Pika Energy to deliver an industry-leading solution in the Harbor Plus Smart Battery, outpacing competitors to expand solar power capacity and capability, ultimately providing customers with freedom from grid dependence.”

The solar-ready Harbor Plus Smart Battery is powered by six Panasonic Lithium-Ion (Li-ion) battery modules connected in series for built-in redundancy. This robust design coupled with 17.1 kWh of usable energy and up to 10 kW of power can support homeowners for long-term grid outage and off-grid scenarios, and can also power heavy equipment such as well pumps and air conditioning units.

Paired with the Pika Energy Island, the Harbor Plus Smart Battery offers solar system owners enhanced and expanded features, including:

  • Self-supply Mode, which maximizes self-consumption of stored energy captured by solar panels – such as Panasonic solar modules HIT – to reduce the home’s dependence on the grid
  • Zero-export Mode, a subset of self-supply mode that prevents any solar energy from transferring to the grid, enabling homeowners to reduce grid dependence as well as remain in compliance in states where exporting solar power to the grid is prohibited, like Hawaii
  • Time-of-Use Capability, helping homeowners who live in areas with time-of-use rate policies, such as California, efficiently manage solar power and reduce costs with an optimized schedule that reduces or eliminates grid use during peak-rate periods
  • Clean-backup Mode, which stores clean solar energy in the smart battery for use when the grid is disrupted. Load transfer is instantaneous, taking as little as 1/60th of a second.
  • Priority-backup Mode, which charges the smart battery from the grid at the full capacity of the system, allowing homeowners to prepare for an expected grid outage such as in the event of an impending storm
  • Dark-start Capability, with the ability for Pika smart batteries to commission without the grid and restart using only solar power should the batteries exhaust their reserve energy; as compared to other solar storage systems that require on-site service from a technician to jump-start dead batteries.

For more info on the newest inverters on the market download our free 2018 Inverter Buyer’s Guide

— Solar Builder magazine

How JLM Energy financed, installed three commercial energy storage systems in southern California

JLM Energy Phazr MicroStorage

JLM Energy recently signed agreements to install energy storage systems for Modern Postcard in Carlsbad, Thermal-Vac Technology and Continuous Coating Corporation in Orange. Energy storage will enable these businesses to reduce commercial demand fees, resulting in millions of dollars saved.

  • Thermal-Vac Technology is a 33-year industry leader and premier brazing, heat-treating and metal finishing facility located in Southern California Edison utility territory. JLM will be installing a 750 kW/1500 kWh Gridz energy storage system.
  • Modern Postcard is a 25-year industry leader in full-service direct marketing solutions and quality promotional printing for businesses of all types, located in San Diego Gas & Electric territory. JLM will be installing a 420 kW/840 kWh Gridz system.
  • Continuous Coating Corporation is the industry leader in electro galvanizing and located in Southern California Edison territory. Established in 1965, as the only electro-zinc line in the Western United States, JLM will install a 180 kW/360 kWh Gridz system for Continuous Coating.

Funding details

These projects are funded through a special $25 million project financing fund. This structure allows qualified customers to achieve guaranteed savings on a monthly basis for 20 years, with no money down. JLM will own, maintain and guarantee system performance. In these respective cases, each solution will generate millions of dollars in savings during the life of the system.

Nate Newsom, JLM Energy’s VP of Enterprise Sales, said, “Shared savings is a risk-free way to reduce burdensome utility bills. Commercial entities that spend three percent or more of their monthly budget on electricity and/or experience 40-50% demand charges typically are a good fit for energy storage.”

JLM Energy’s storage solutions operate on intelligent software called Measurz. It analyzes energy consumption trends and then develops recommendations that automatically optimize energy efficiency. Users can rely on stored energy during periods of peak energy use, resulting in lower bills.

The energy storage market is being driven by the declining cost of batteries, creating a huge benefit for consumers. JLM uses lithium iron phosphate batteries, a more structurally and thermally stable alternative than the more common lithium ion.

— Solar Builder magazine