We wrote recently about the market opportunities in distributed energy storage in the commercial sector. [Drivers of the Commercial Energy Storage Market]. Distributed energy storage in this sector is expected to show a 34% cumulative annual growth rate. This certainly marks the beginning of a sustainable growth opportunity, one that utilities are best-placed to take advantage of.
Catering for the new commercial customer
Commercial and industrial customers are turning to renewable energy sources to lower their costs and environmental footprint but reliability can be problematic due to the intermittent nature of these sources.
Companies are beginning to see the opportunity in making it easier (and more cost effective) for their commercial customers to combine their solar and storage.
While customers get to benefit from high quality, consistent and economical power around the clock, utilities can expect to reap commercial and operational value from this offering and they get to delight and keep their customers. Some are going a step further by offering other energy management systems for those commercial customers who want a fully integrated energy savings platform.
One such company is Duke Energy Renewables, part of Duke Energy's Commercial Businesses, which aims to increase savings for its commercial solar customers through an alliance with Green Charge Networks, a large provider of commercial energy storage for retail, industrial and government customers.
Energy storage certainly adds to the list of compelling reasons why businesses should opt for solar. While the energy storage will help customers create more reliability from their solar power which is intermittent in nature, commercial customers can save money by reducing their peak demand, which can account for up to 50% percent of their electricity bill, according to a press release.
Through REC Solar and energy management company Phoenix ET, Duke Energy intends to offer customers energy management systems, thereby giving them a “complete and integrated energy savings platform."
With a combination of lithium-ion battery technology and predictive software, Green Charge systems will draw power from the REC Solar system and the grid during off-peak hours, when electricity is inexpensive, and release it during peak hours, when electricity is more expensive.
Both REC Solar and Green Charge Networks provide competitive, customer-friendly financing options. Green Charge offers a financing model that allows customers to reduce energy costs with no capital output. REC Solar offers tailored financing packages, including leases and power purchase agreements, through an efficient and streamlined financing relationship with Duke Energy.
The initial focus will be on the Southern California and Hawaiian markets.
Importance of offering a broader base of services
Today, most rooftop solar arrays and energy storage solutions are installed by third party providers rather than utilities. But as solar proliferates, its residential adopters pay less money to the utility because they can generate or offset a portion of their electricity demand. That means utilities — many of them already facing stagnant or negative load growth — can see significant portions of their revenue lost if solar, and especially energy storage, catches on among their customers.
Worse still, solar adopters still use the grid, but pay less for its upkeep, forcing those costs onto other customers.
Different utilities have approached the problem in different ways. Many have looked to reduce the financial impact of rooftop solar on their companies by increasing fixed charges on customers or reducing net metering rates.
But increasingly, utilities are taking the “if you can’t beat ‘em, join ‘em” approach and announcing plans to get into the rooftop solar and storage markets themselves.
This is certainly a time for utilities to not only adapt but to lead from the front. [Adaptation Will Save the Utility.]
Change should be embraced by branching out and offering a wide variety of services to support the growth of renewables, across all customer segments.