Commercial customers paying demand charges and time-of-use rates should seriously consider an investment in these assets.
As shown in a recent RMI report, battery energy storage costs are less than a fifth of what they were a decade ago. This is enabling batteries to become cost-effective in a growing list of locations and use cases, such as balancing the grid, reducing customer demand peaks, and providing backup power. In particular, behind-the-meter solar-plus-storage can often deliver bill savings for large commercial and industrial users that have high demand charges–typically greater than $10-15 per kilowatt (kW)–or have time-of-use (TOU) utility rates.
Our analysis shows that these investments have simple payback periods of less than eight years in places as diverse as Arizona, North Carolina, Ohio, and South Carolina—based just on reducing peak demand and shifting TOU. Behind-the-meter batteries can also deliver other services, but we did not model these values.
More Than Bill Savings
While solar-plus-storage is gaining market share in places with battery investment incentives, like California and New York, it is now also competitive in many less-obvious locations. To evaluate its cost-effectiveness, we modeled the optimal battery capacity to be paired with a 50-200 kW PV system for a typical commercial customer with peak monthly loads averaging around 300 kW and annual usage of 900 megawatt-hours — translating to around $150,000 per year.
We ran our model in four diverse locations — New Bern, NC; Piqua, OH; Bullhead City, AZ; and Charleston, SC – based on geographic diversity, neither obvious political support nor antipathy toward solar-plus-storage, and typically high demand charges. We used NREL’s REopt Lite online tool to quantify the customer cost savings from solar-plus-storage. We also examined, but did not quantify, other social values, such as resilience and GHG emissions reductions.
New Bern, NC (New Bern Municipal Utility)
North Carolina has the fourth-most installed solar per capita in the United States, despite having the fifth-cheapest commercial electricity rates, a moderate solar resource, and a fairly weak renewable portfolio standard (RPS), which mandates that utilities source 12.5% of their electricity from renewable sources by 2021.
In cities like New Bern, with high commercial demand charges (>$25/kW) coupled with TOU rate structures, solar-plus-storage can be a very attractive economic investment. The simple payback is just six years, faster even than a standalone solar PV system. For a typical medium-sized commercial customer in North Carolina spending $155,000 per year on electricity, these savings would correspond to a net present value (NPV) of $220,000.
Solar-plus-storage investments could also help New Bern adapt to and mitigate climate change. New Bern, a coastal city, has faced 24 hurricanes and severe storms since 1950, with almost half occurring in just the past decade. During future disasters, resilient solar-plus-storage systems could help keep the lights on.
Moreover, solar-plus-storage systems controlled and dispatched by the utility could also supplant planned natural gas peaker plants—especially as part of a “clean energy portfolio” that also includes energy efficiency and demand-side flexibility measures. Thus, solar-plus-storage could displace some of the 422 megawatts of natural gas plants planned over the next five years in North Carolina and help ratepayers avoid the associated risk of stranded costs.
Piqua, OH (Piqua Municipal Utility)
Ohio ranks near the bottom of the nation for installed solar per capita, with a poorer-than-average solar resource, relatively cheap electricity, and unfriendly policies—like the state legislature rolling back what was an already weak RPS of 12.5% by 2026. Battery energy storage could play an important role in jump-starting the solar industry here because it can increase solar’s cost effectiveness.
In places like Piqua, with high commercial demand charges ($16/kW), investments in solar-plus-storage could pay back in less than 8 years, compared with the 14-year payback period for a typical standalone solar PV system. For a typical medium-sized commercial customer in Ohio spending $105,000 per year on electricity, these savings would correspond to an NPV of $14,000.
As with North Carolina, solar-plus-storage investments also represent a significant emissions reduction opportunity. Ohio is third only to Pennsylvania and Texas in terms of planned gas generation capacity, with 2,250 megawatts expected to come online in the next five years. Showcasing the cost effectiveness of solar-plus-storage could play an important role in shifting investments away from new natural gas plants and toward clean energy portfolios.
Additionally, solar-plus-storage on critical facilities could serve as a resilient resource during grid outages. Piqua has experienced 12 federally declared disasters since 1950, including an EF4 tornado that hit just south of the town in May 2019. This resulted in over 50,000 residents losing power, some for multiple days.
Battery storage is rapidly becoming economic as well, especially for residents in cities like Bullhead City with its high commercial demand charges ($15/kW) coupled with TOU rate structures. For these customers, solar-plus-storage systems would pay back in less than seven years. For a typical medium-sized commercial customer in Arizona spending $120,000 per year on electricity, these savings would correspond to an NPV of $90,000.
Arizona is primed to become a leader in storage. Its utility regulator, the Arizona Corporation Commission, recently placed a moratorium on the construction of new gas plants, emphasizing the importance of battery storage in balancing a grid with a high portion of renewable energy.
Climate change is also a critical factor for Arizona, which recently experienced increased wildfires, extreme temperatures, and drought. Bullhead City has experienced 13 federally declared disasters since 1950, including recent wildfires in 2013 and 2015. As with other cities feeling the heat from climate change, resilient solar-plus-storage systems could alleviate some of the impacts from grid outages.
Charleston, SC (Coastal Electric Cooperative)
Even though South Carolina has a better solar resource and higher electricity prices than North Carolina, a combination of unfriendly solar policies has resulted in it having less than a third of the installed solar per capita of its northern neighbor. This includes a practically nonexistent RPS of 2% by 2021, a recently lifted 2% aggregate cap on net metering, and the Public Service Commission setting abnormally low rates for solar projects through PURPA.
Despite these regulator headwinds, solar-plus-storage systems can pay back in less than seven years in cities like Charleston, which is subject to Coastal Electric Cooperative’s high demand charges (>$16/kW) and TOU rate structures. For a typical medium-sized commercial customer in South Carolina spending $150,000 per year on electricity, these savings would correspond to an NPV of $82,000.
Similarly to New Bern, NC, Charleston has experienced 17 disasters from hurricanes and severe storms since 1950, including 12 in just the last six years. Resilient solar-plus-storage systems can help Charleston deal with the effects of these increasingly frequent natural disasters. And as nuclear power plants continue to falter in the state, costing rate payers billions of dollarssolar-plus-storage is well-positioned to become a critical part of a more distributed, cleaner, and lower-cost electricity system for South Carolina.
It’s Time to Get Serious About Storage
It no longer makes any sense to say that batteries are too expensive. Solar-plus-storage could be a significant missed investment opportunity for places that don’t properly evaluate the many benefits described above—especially those with high commercial demand charges or TOU rates.
Cities can play a unique role in helping to build the industry by developing goals, policies, and siting and safety guidelines for battery energy storage. New York City has taken a great first step, developing useful tools that other cities could use to develop best practices in these areas.
In addition to cities, corporate and institutional energy customers should take the lead by assessing solar-plus-storage on their buildings to evaluate the direct bill savings and their ability to adapt to and mitigate the effects of climate change. Collectively, the buying power of these customers could help significantly move the needle on battery storage deployment and be an important accelerant of our transition to a cleaner grid.
 Demand charges are for the highest amount of power used each month (e.g. $10/kW demand charge multiplied by 300 kW of demand on a Monday at 3:30pm when the HVAC, lighting, and plug load usage was all higher than normal).
Load Profile: Office – Medium Default; Nominal discount rate:Default 8.1%; Solar PV: Capex $1.75/W, Default 30% ITC, + MACRS; Li-ion Battery: Capex energy $372/kWh and power $388/kW (based on internal research); All other REopt Lite defaults utilized
The former leader of the Green party in British Columbia has endorsed the federal Liberals’ plan for combatting climate change.
Andrew Weaver says the Liberal plan is “both bold and thoughtful” and is the only credible plan put forward by any federal party.
The endorsement is another blow for federal Green Leader Annamie Paul, who has struggled with internecine feuding and a lack of financial resources to run a national campaign.
By Joan Bryden, The Canadian Press,
Paul admitted earlier this week that the party will not field a full slate of 338 candidates across the country.
She’s not commenting directly on Weaver’s endorsement but insists the Liberal climate plan is “smoke and mirrors.”
Weaver posted his video endorsement of the Liberal climate plan on social media Thursday; it was eagerly circulated by Liberals, including Leader Justin Trudeau, who made much of the fact that Weaver is a climate scientist.
In the video, Weaver lauds the Liberal plan for including, among other measures, “a world-leading price on carbon pollution” and rapid zero-emissions vehicle deployment “which is even strong policy that one we developed here in B.C.”
“This is a plan that reflects the urgency and scale of the crisis,” he says.
“I’m extremely impressed at how ambitious the Liberal Party of Canada’s plan is and I’m confident that this is the right path for Canada.”
Trudeau retweeted Weaver’s video, saying it “means a lot” given all he’s accomplished as a climate scientist and former Green leader in B.C.
Before joining the B.C. legislature in 2013, Weaver was the Canada Research Chair in climate modelling and analysis at the University of Victoria and a lead author on several United Nations Intergovernmental Panel on Climate Change scientific assessments. He didn’t run for re-election last year.
At a news conference Thursday in the Toronto Centre riding where she’s trying for the third time to win a seat for herself in the House of Commons, Paul said she hadn’t seen Weaver’s video and couldn’t comment on it.
But she argued that even if the Liberals were to implement every measure in their climate plan, Canada would not meet the Liberals’ original target to reduce carbon emissions by 30 per cent below 2005 levels by 2030, much less their new, more ambitious target of 40 to 45 per cent.
“The fact of the matter is that you cannot continue to build new pipelines like TMX, support other pipeline projects like Coastal GasLink, greenlight project after project for new oil and gas exploration, continue to support fracking of gas in this country and continue to support the fossil fuel industry to the tune of billions of dollars and hope to reduce greenhouse gas emissions,” she said.
Paul muddled her message, however, misspeaking as she declared: “If you want a real plan the only option in this election for you is the Liberals.”
Weaver stressed in an interview that he’s not endorsing the Liberal party per se, he’s endorsing the Liberal climate plan which he called “first rate” and “absolutely exceptional.”
“I’ve always been focused on policy, not partisanship,” he said.
Weaver said he hopes Paul wins a seat and believes she’s “the best thing to happen” to the federal Green party. But he said he doesn’t believe her party grasps the seriousness of the climate crisis.
“The federal Greens do not have a climate plan, to be perfectly blunt,” Weaver said.
“If the federal Greens truly believe that climate change was the defining issue of our time then they wouldn’t be imploding over infighting over views of a Mideast crisis for which nobody really cares what the views of one or two MPs in a Canadian Parliament are,” he added.
In June, Fredericton Green MP Jenica Atwin crossed the floor to the Liberals after criticizing Paul’s stance on the Israeli-Palestinian conflict. That triggered weeks of infighting and attempts by the party’s executive to put Paul’s leadership to a confidence vote by grassroots members.
This means that renewables are increasingly displacing “dirty” fossil fuels in the power sector, offering the benefit of lower emissions of carbon and other types of pollution. But not all sources of energy marketed as “renewable” are beneficial to the environment. Biomass and large hydroelectric dams create difficult tradeoffs when considering the impact on wildlife, climate change, and other issues. Here’s what you should know about the different types of renewable energy sources—and how you can use these emerging technologies at your own home.
What Is Renewable Energy?
Renewable energy, often referred to as clean energy, comes from natural sources or processes that are constantly replenished. For example, sunlight or wind keep shining and blowing, even if their availability depends on time and weather.
While renewable energy is often thought of as a new technology, harnessing nature’s power has long been used for heating, transportation, lighting, and more. Wind has powered boats to sail the seas and windmills to grind grain. The sun has provided warmth during the day and helped kindle fires to last into the evening. But over the past 500 years or so, humans increasingly turned to cheaper, dirtier energy sources such as coal and fracked gas.
Now that we have increasingly innovative and less-expensive ways to capture and retain wind and solar energy, renewables are becoming a more important power source, accounting for more than one-eighth of U.S. generation. The expansion in renewables is also happening at scales large and small, from rooftop solar panels on homes that can sell power back to the grid to giant offshore wind farms. Even some entire rural communities rely on renewable energy for heating and lighting.
Nonrenewable, or “dirty,” energy includes fossil fuels such as oil, gas, and coal. Nonrenewable sources of energy are only available in limited amounts and take a long time to replenish. When we pump gas at the station, we’re using a finite resource refined from crude oil that’s been around since prehistoric times.
Nonrenewable energy sources are also typically found in specific parts of the world, making them more plentiful in some nations than others. By contrast, every country has access to sunshine and wind. Prioritizing nonrenewable energy can also improve national security by reducing a country’s reliance on exports from fossil fuel–rich nations.
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Types of Renewable Energy Sources
Humans have been harnessing solar energy for thousands of years—to grow crops, stay warm, and dry foods. According to the National Renewable Energy Laboratory, “more energy from the sun falls on the earth in one hour than is used by everyone in the world in one year.” Today, we use the sun’s rays in many ways—to heat homes and businesses, to warm water, or power devices.
Solar, or photovoltaic (PV), cells are made from silicon or other materials that transform sunlight directly into electricity. Distributed solar systems generate electricity locally for homes and businesses, either through rooftop panels or community projects that power entire neighborhoods. Solar farms can generate power for thousands of homes, using mirrors to concentrate sunlight across acres of solar cells. Floating solar farms—or “floatovoltaics”—can be an effective use of wastewater facilities and bodies of water that aren’t ecologically sensitive.
Solar energy systems don’t produce air pollutants or greenhouse gases, and as long as they are responsibly sited, most solar panels have few environmental impacts beyond the manufacturing process.
We’ve come a long way from old-fashioned wind mills. Today, turbines as tall as skyscrapers—with turbines nearly as wide in diameter—stand at attention around the world. Wind energy turns a turbine’s blades, which feeds an electric generator and produces electricity.
Nationally and internationally, large hydroelectric plants—or mega-dams—are often considered to be nonrenewable energy. Mega-dams divert and reduce natural flows, restricting access for animal and human populations that rely on rivers. Small hydroelectric plants (an installed capacity below about 40 megawatts), carefully managed, do not tend to cause as much environmental damage, as they divert only a fraction of flow.
Biomass is organic material that comes from plants and animals, and includes crops, waste wood, and trees. When biomass is burned, the chemical energy is released as heat and can generate electricity with a steam turbine.
Biomass is often mistakenly described as a clean, renewable fuel and a greener alternative to coal and other fossil fuels for producing electricity. However, recent science shows that many forms of biomass—especially from forests—produce higher carbon emissions than fossil fuels. There are also negative consequences for biodiversity. Still, some forms of biomass energy could serve as a low-carbon option under the right circumstances. For example, sawdust and chips from sawmills that would otherwise quickly decompose and release carbon can be a low-carbon energy source.
If you’ve ever relaxed in a hot spring, you’ve used geothermal energy. The earth’s core is about as hot as the sun’s surface, due to the slow decay of radioactive particles in rocks at the center of the planet. Drilling deep wells brings very hot underground water to the surface as a hydrothermal resource, which is then pumped through a turbine to create electricity. Geothermal plants typically have low emissions if they pump the steam and water they use back into the reservoir. There are ways to create geothermal plants where there are not underground reservoirs, but there are concerns that they may increase the risk of an earthquake in areas already considered geological hot spots.
Tidal and wave energy is still in a developmental phase, but the ocean will always be ruled by the moon’s gravity, which makes harnessing its power an attractive option. Some tidal energy approaches may harm wildlife, such as tidal barrages, which work much like dams and are located in an ocean bay or lagoon. Like tidal power, wave power relies on dam-like structures or ocean floor–anchored devices on or just below the water’s surface.
Renewable Energy in the Home
At a smaller scale, we can harness the sun’s rays to power the whole house—whether through PV cell panels or passive solar home design. Passive solar homes are designed to welcome in the sun through south-facing windows and then retain the warmth through concrete, bricks, tiles, and other materials that store heat.
Some solar-powered homes generate more than enough electricity, allowing the homeowner to sell excess power back to the grid. Batteries are also an economically attractive way to store excess solar energy so that it can be used at night. Scientists are hard at work on new advances that blend form and function, such as solar skylights and roof shingles.
Geothermal Heat Pumps
Geothermal technology is a new take on a recognizable process—the coils at the back of your fridge are a mini heat pump, removing heat from the interior to keep foods fresh and cool. In a home, geothermal or geoexchange pumps use the constant temperature of the earth (a few feet below the surface) to cool homes in summer and warm houses in winter—and even to heat water.
Geothermal systems can be initially expensive to install but typically pay off within 10 years. They are also quieter, have fewer maintenance issues, and last longer than traditional air conditioners.
Small Wind Systems
A backyard wind farm? Boats, ranchers, and even cell phone companies use small wind turbines regularly. Dealers now help site, install, and maintain wind turbines for homeowners, too—although some DIY enthusiasts are installing turbines themselves. Depending on your electricity needs, wind speeds, and zoning rules in your area, a wind turbine may reduce your reliance on the electrical grid.
Selling the Energy You Collect
Wind- and solar energy–powered homes can either stand alone or get connected to the larger electrical grid, as supplied by their power provider. Electric utilities in most states allow homeowners to only pay the difference between the grid-supplied electricity consumed and what they have produced—a process called net metering. If you make more electricity than you use, your provider may pay you retail price for that power.
Renewable Energy and You
Advocating for renewables, or using them in your home, can accelerate the transition toward a clean energy future. Even if you’re not yet able to install solar panels, you may be able to opt for electricity from a clean energy source. (Contact your power company to ask if it offers that choice.) If renewable energy isn’t available through your utility, you can purchase renewable energy certificates to offset your use.
Eskom, which supplies almost all South Africa’s electricity from coal-fired power plants, is considering spending R106 billion on wind and solar energy by 2030.
The investment plan, which Eskom could carry out by itself or in partnerships, is the most detailed demonstration yet of the utility’s ambition to move away from coal by taking advantage of the nation’s abundant wind and solar resources.
The state-owned company envisages spending 61.75 billion rand on wind power and 44.25 billion rand on solar energy by the end of the decade, a company presentation seen by Bloomberg shows. Some of the projects are planned on the sites of coal-fired plants that are scheduled to close. Eskom confirmed the presentation and the costs without giving further detail.
The potential investment is part of a plan previously communicated by Chief Executive Officer Andre de Ruyter to borrow money from development-finance institutions for projects that would reduce emissions from a company that accounts for two-fifths of South Africa’s greenhouse gas output.
While President Cyril Ramaphosa has set up a commission to advise him on climate change, Eskom’s plans have been publicly opposed by Gwede Mantashe, his energy minister, who says such a transition could eliminate thousands of coal-dependent jobs.
The presentation outlines three phases for the investment once funding and regulatory approvals have been secured.
In the first phase, which would span from 2022 to 2023, 246 megawatts of photovoltaic solar power could be built at the Arnot, Duvha, Lethabo, Majuba and Tutuka coal-fired power plants. A further 100 megawatts of solar-generation capacity could be built at Komati, the first of the aging power plants slated to close, and 19.5 megawatts of solar power at the site of the Sere wind-power plant.
The second phase, which would last from 2023 to 2025, could see the construction of a 750 megawatt concentrated solar power plant at Olyvenhoutsdrift in the Northern Cape and 600 megawatts of photovoltaic power added at Sere.
The company may also seek to build 300 megawatts of wind power at Kleinzee on South Africa’s northwest coast and 200 megawatts of wind power at Aberdeen in the Eastern Cape province. A further 250 megawatts of renewable energy generation capacity could be built on the sites of decommissioned coal-fired power plants.
The third phase envisages the building of a further 2,950 megawatts of solar photovoltaic capacity between 2025 and 2030 as well as 3,100 megawatts of wind power.
Eskom already has debt of about 400 billion rand, mainly from an overrun in the cost of construction of two coal-fired power plants. Debt from development-finance institutions is generally cheaper than borrowings from commercial lenders.
Until now almost all of South Africa’s investment and planned investment in renewable energy has been by private companies. Eskom has no plans for further coal plants but is considering investment in battery storage and gas-fired plants. The company’s annual revenue is about $13.5 billion.