SolarCity to Use Batteries From Tesla for Energy Storage
By DIANE CARDWELL
Commercial building owners, even those who reduce their overall energy
use, have long struggled to cut special power fees that are based on
periods of highest demand.
Now, SolarCity, the fast-growing solar installer, says it has found a
solution, in the form of a battery system created with Tesla Motors.
The system, to be announced on Thursday, includes batteries about the
size of a small refrigerator and software that controls when a
building’s operations run on power from the solar array, the battery or
the grid.
Called DemandLogic, it could allow businesses to use stored electricity
in times of highest demand, which would reduce their usage at peak
periods and the associated fees, called demand charges.
“We are providing them a solution to reduce their energy cost and demand cost,” said Lyndon Rive, SolarCity’s
chief executive, adding that the systems would provide backup power and
a working solar array during blackouts. Although he said he did not see
the systems as a step toward independence from the grid, storage would
be important to maintaining grid stability as more customers adopt
solar.
The product grew from a $1.8 million grant in 2010 from the California
Public Utilities Commission to study the possibilities of storing
electricity from rooftop solar arrays in batteries. The company has also
signed up about 300 of its residential customers for a pilot program
using battery packs from Tesla, whose chief executive, Elon Musk, is the
chairman of SolarCity and Mr. Rive’s cousin.
The company will begin offering its storage systems in parts of
California, Connecticut and Massachusetts. Although the combination of
solar with storage could prove potent, said Sam Jaffe, a senior research
analyst at Navigant Research, the market for it is by no means assured.
“It’s not a no-brainer — you still have to have the exact right
combination of rates and demand charges and the cost of that equipment,”
he said. He added, though, that if the systems are configured to take
advantage of a 30 percent federal tax credit, the economics would have
broader appeal.
The SolarCity systems, which are designed to be eligible for the credit,
will be made available to new solar customers signing 10-year service
agreements and are made to store about a third of the energy the solar
array can produce. Mr. Rive said the company would guarantee the demand
charge reductions, which he expects to run around 20 percent.
The demand charges, meant to compensate the utility for capital
investments in distribution infrastructure, are based on so-called peak
demand, or the highest amount of electricity used within the billing
period. So even companies using less electricity overall can incur high
fees. Part of the appeal for businesses trying to reduce their electric
loads is that the system allows them to continue operating at full
capacity, rather than reducing power usage, as in traditional demand
response programs, Mr. Rive said.
http://www.nytimes.com/2013/12/05/business/energy-environment/solarcity-to-use-batteries-from-tesla-for-energy-storage.html?emc=eta1&_r=0
