Battery storage systems are growing in popularity as technology improves, prices decline, and electric utilities and their customers recognize the benefits. Therefore, it is no surprise that system installations are increasing in homes, at businesses and for utility sites. The perks of battery storage for these three entities overlap, but we cover them separately below.
Homeowners are embracing battery storage to save money, enjoy backup power during outages and pair with solar photovoltaic (PV) arrays. When installing a battery storage system, homeowners should work with a contractor who can guide them toward a system that will meet their needs, considering factors like battery chemistry, controller functionality, AC vs. DC coupling, and equipment size, shape and location. They should also inform their utility as they move through the process.
Energy Independence — A residential battery storage system pairs well with a solar array and an electric vehicle, allowing you to spend less on electricity from the grid and/or fossil fuels. Especially when bundled with solar, battery storage yields a greater sense of control over your energy use and can lead to near total energy independence.
Profitability Without Solar — While the benefits of battery storage are enhanced with solar, some electricity markets are structured such that battery storage on its own can be profitable. If you live in an area with higher electricity prices, greater than around $0.14 per kWh, and can switch to a time-of-use rate, a battery storage system may be able to pay for itself and start earning money within its warranty period.
Electricity Rate Savings — Time-of-use rates, demand charges and real-time pricing are payment structures that charge more for electricity when demand is high and less when it is low. With battery storage, you can store power when it is cheaper and use it when it is more expensive, saving money.
Peace of Mind — Whether your reasons for installing battery storage are environmental or financial, having a quiet battery backup that automatically takes over during outages can be much more convenient than a noisy gas-powered generator. It can also provide a more streamlined and permanent solution if you are in an area with frequent outages.
Make Renewables More Viable — One of the biggest issues for solar power is that its production peaks at midday, while demand for electricity peaks in the morning and evening. Battery storage can help mitigate this mismatch by storing the power generated by solar for later use, lessening your utility’s need to switch on fossil fuel-burning capacity to meet peak demand.
Help the Grid — In addition to saving you money by using less power from the grid during expensive times, widespread home battery storage could lead to less stress on the network and consequently fewer required upgrades and less frequent outages.
Commercial and Industrial Benefits
Battery storage systems in commercial and industrial facilities allow a business to save money by navigating demand charges and time-of-use rates, maintain operations during outages and capture energy generated by a solar PV array. As with homeowners, businesses will need a contractor to help decide what type of battery system fits best, and they should keep their utility informed if they are pursuing the technology.
Demand Charges — Commercial and industrial facilities must often pay demand charges, which are fees incurred when businesses draw large quantities of power in short periods of time. These charges can represent a sizable portion of a facility’s energy bill. Installing a battery storage system can help lower these expensive surges in power demand and save businesses money.
Load Shifting — Controllers for your battery storage system are available that can learn your business’s power usage patterns and automatically shift consumption from the grid to lower-demand and lower-cost times when using time-of-use and related rate structures.
Reduced Downtime — Outages have a big effect on commercial and industrial companies, causing them to lose a large amount of money due to production delays. A battery storage system can ensure that your shop, factory or service center remains open, and this added resilience can make you more attractive to customers.
Power Quality Management — For manufacturing and services that require high quality power, a battery storage system can help reduce or eliminate frequency changes, voltage sag and power factor issues.
Solar Integration — As noted above, battery storage can help mitigate the mismatch of renewable energy and typical electricity demand by storing the power generated by solar for later use.
Throughout the day, utilities balance the supply and demand of electricity. Energy storage, broadly, can ease this balancing act by capturing energy and storing it for later use. Utility-scale energy storage has been around for decades, primarily in the form of pumped hydro storage, but battery storage in particular has become more feasible over the last several years.
Battery storage can be connected to distribution/transmission networks (substations) or generation assets. It increases flexibility in power systems, supports renewable energy integration and provides numerous other benefits.
Benefits for Grid Operation
Increased Reliability and Power Quality — Battery storage gives grid operators more flexibility when managing the grid, leading to fewer system disruptions.
Increased Energy Security and Resiliency — Battery storage can help keep sections of the grid online during outages.
Frequency Regulation — If there is an imbalance between power supply and demand, the frequency of the grid can rise or fall and cause outages. Currently, utilities must keep some power plants on standby or lower their output to meet capacity levels, which is costly and inefficient. While conventional power plants require several seconds or minutes to respond to operators’ commands, battery storage can provide frequency regulation within milliseconds.
Flexible Ramping — When demand for electricity climbs or drops dramatically, system operators must quickly respond, and the growing penetration of solar PV can cause periods of especially high ramping in some areas of the country (a load profile known as the “duck curve”). Battery storage can be used to smooth out the steepness of the demand curve and make the grid easier to manage.
Black Start Services — In the event of a grid failure, power plants require power to start up again, known as a black start. On-site diesel generators often provide this service, but battery storage is a suitable alternative. When it’s not needed for black start, it can be used elsewhere, providing additional revenue streams.
Benefits for Investment Deferral
Energy Shifting and Capacity Investment Deferral — Traditionally, peaking power plants have supplied electricity during periods of high demand, but in some cases, battery storage can be deployed instead.
Transmission and Distribution Congestion Relief — Network congestion occurs when the power flow through transmission and distribution networks exceeds load-carrying capacity. Historically, additional transmission and distribution networks would be built to meet the power needed, but because transmission construction is expensive, deferral is a high value-added investment. Battery storage could be controlled by system operators to provide an instantaneous response during the few hours each year when the existing network substations may be overloaded.
Benefits for Renewable Energy Generators
Reduced Renewable Energy Curtailment — In times of high renewable generation and low demand, where grid constraints prevent transporting excess generation, renewable energy generators have to reduce (curtail) their power output. To avoid this scenario, battery storage can be used to store the excess clean energy and discharge it when demand is higher.
Storing Energy from Small-Scale Distributed Renewables — A centralized large-scale battery can be deployed in an area with many small-scale renewables, such as solar installed on residential rooftops.
Capacity Firming — Renewable energy generation fluctuates throughout the day based on cloud cover (for solar) and wind speed (for wind). Coupling battery storage with renewables can reduce fluctuations at the point of interconnection. It can smooth power output and control the ramp rate to eliminate rapid voltage and power fluctuations.
Benefits for Microgrids
Reduced Reliance on Diesel Generators — Island and remote communities often lean on diesel generators for reliable energy, but the combination of battery storage and renewables could decrease this dependence and be used in microgrids, which are independent electric systems that use local energy resources and control technologies to help power a defined area.
Battery storage has much to offer all players in the energy industry, and as the grid moves to more sustainable, cleaner technologies and people want more control over their energy usage, it will continue to play a critical role.