Chapter V. Grid is Great
Well, it’s been a while. I’ve been terribly negligent, haven’t I? My apologies. Damned Sisyphus changed the blog’s login credentials without telling me. The mutinous monarch had grand designs for a blockbuster series of posts on his locomotive exploits, titled – what else? – The Fast & The SisyPhurious.
There was even a poster:
What a dork, huh?
Here at WSFAB, we’re often asked, “How can I go off-grid?”
Our answer, more often than not? “Please don’t.”
In the popular imagination, energy storage is all about quitting the grid. Indeed, since the rise of solar photovoltaics a few decades ago, lead acid batteries and solar have made a great pair in remote areas. With the solar powering loads and charging the battery for night-time use, a well-designed, off-grid solar + storage system can provide clean, reliable electricity 24/7.
So, what’s the problem? For remote installations, there isn’t one. Wherever you are, it is costly to connect a house (or any other electric load) to the grid, but these interconnection costs skyrocket the farther you get from dense webs of distribution wires. This isn’t surprising. Where there is little infrastructure ready to serve a new load, and new wires must run long distances to reach that load, interconnection gets pretty pricey. The pricier it gets, the more attractive off-grid solar + storage becomes. But – if you are close to the grid, it’s probably cheaper to go with grid-tied solar and pull power from the grid at night.
Here’s the cost comparison in its simplest form:
Off-grid solar + storage cost = Solar and storage installation cost + storage replacement cost (if necessary)
Grid-tied solar cost = Solar installation cost + interconnection cost1
If your home is a sylvan backwoods cabin or a sun-dappled island bungalow, going off-grid could very well be the cost-effective choice. But such cases are hugely outnumbered by those for which grid-tied solar is the cheaper option. And believe it or not, off-grid solar + storage is often less environmentally friendly than grid-tied solar. This is because no battery is perfectly efficient at charging and discharging – about 20% of the energy with which it’s charged will be lost by the time it’s discharged.2
The gist? In broad strokes, energy storage is reinventing the way we generate, deliver, and value power. But unless you’re out in the middle of nowhere, off-grid solar + storage is typically less cost-effective than grid-tied solar. And that’s fine! Because there are plenty of other reasons to add batteries to grid-tied solar, and if we want to build the dynamic grid of the future, we’re going to need a lot of batteries on the grid.
Batteries have many flattering traits. Most flattering of all is the load “flattening” they can provide to the grid, by charging when the load on the grid is light, and discharging when it’s heavy. This helps shift solar power to night-time, wind power to low-wind-time, and excess power of all kinds to peak-time. All three of these power-shifting behaviors can drive down electricity costs for utility customers and significantly reduce carbon emissions.3
You don’t have to run the Hoover Dam or Grimes' boyfriend's Australian apparatus to contribute - there are many ways in which a more modest grid-tied energy storage system can get paid to flatten loads. Better yet, such batteries can multitask. That is, they can smoothly alternate between different behaviors, maximizing usefulness and profitability. This is known as "value stacking."
Check out all of the fun values in this stack!
- Demand charge reduction - A customer with a monthly peak demand above 10 kW pays a "demand charge" that increases with the size of their peak. A battery can flatten the curve by discharging during peaks, thereby lowering their bill. This is the simplest revenue-generation method for behind-the-meter batteries, since it doesn't require registration for any utility or agency energy programs.
- Rider Q - Under Con Ed's Rider Q tariff, a customer can opt into a rate with daily kW peak and off-peak hours. The customer then pays demand charges if they consume during peak hours, but is no longer charged for a monthly kW peak. A battery can generate significant savings by charging off-peak and discharging on-peak.
- Demand response - Demand response generates value for the utility by flattening kW peaks at the distribution level. Operationally, it's a lot like demand charge reduction, except that it targets peaks on the grid instead of at a customer's meter. Depending on a battery's size and availability, it can participate in several different Con Ed demand response programs.
- Load shifting / Energy arbitrage - If a customer pays variable time-of-use rates, their battery can charge when energy's cheap and discharge when it's expensive, helping the customer avoid peak kWh pricing. This is called "load shifting." Energy arbitrage is similar, except the battery sends power to the grid during peak hours, maximizing the rate it's paid for energy exports. Right now, energy arbitrage has uncertain regulatory support, but it's likely to be viable soon.
- Non-Wires Alternatives (NWA) - By performing load-flattening much like that required by demand response, a well-placed battery can obviate the need for grid transmission and distribution upgrades. Con Ed will pay installations that reliably provide these services. NWA programs are very likely to become more prevalent and accessible as distributed energy resources proliferate in Con Ed territory and new transmission and distribution upgrades become necessary.
Admittedly, if you're new to this stuff, this might feel less like a nice, neat "stack," and more like a Jenga tower. But everybody's pretty new to this – you're ahead of the game just for getting this far!
Here’s the thing. Sure, “off-grid” sounds rugged & sexy – but the grid needs our help if it’s going to grow into the cleaner, more dynamic grid of the future. An ever-expanding fleet of small, behind-the-meter batteries are going to be essential to this transformation.
Conclusion? Grid-tied is sexy, too. 😉
- This comparison requires a few basic assumptions:
- The solar will operate for 25+ years.
- The off-grid solar + storage will meet all electricity needs that would otherwise have been met by the grid-tied option.
- If the storage must be replaced in ~10 years (since most batteries lose degrade more quickly than solar PV), projected replacement costs will be included.
- And don’t forget about the human and environmental costs of manufacturing, shipping, and installing batteries. Exporting directly to the grid is much more efficient, meaning grid-tied solar offsets more carbon-intensive grid power.
- Of course, the use of renewable energy at times when the sun isn’t shining and the wind isn’t blowing is essential if we want a low-carbon grid. But what’s the benefit in shifting non-renewable power from off-peak to on-peak times? “Peakers” are our nastiest, most carbon-intensive power plants, and they’re used exclusively during – you guessed it! – peaks. If we can flatten grid peaks enough, the peakers won’t need to turn on, leading to enormous carbon reductions. Energy storage is already beating peakers at their own game and, before long, might render them obsolete.