By Rory J. O’Connor, Freelance Energy Writer
Over the past decade, renewable solar energy has proven its value to commercial and industrial (C&I) customers as they face steadily rising utility rates. The challenge, of course, is that solar may not produce energy when a customer needs it…and if a grid outage occurs when solar generation is low, even the largest array can’t provide the energy a business needs.
To solve those problems, many C&I customers are turning to energy solutions that combine solar+ storage, like NantEnergy’s software-controlled systems. With battery storage technology to capture solar generation for later use, NantEnergy’s systems make full use of the available energy from customers’ solar arrays—and then allow them to use that power when it benefits their operations most.
Cost Savings through Demand Charge Reduction
NantEnergy systems deliver these outsized benefits by reducing demand charges for C&I customers. Utilities increasingly charge non-residential ratepayers based on what time of day they use their electricity. According to a recent National Renewable Energy Lab (NREL) study, these charges can account for up to 70% of an electricity bill.
The need for demand charge reduction is enormous. The NREL estimates that approximately five million C&I customers across the U.S. could save money by deploying battery storage to manage peak demand charges. Here’s how: Storage systems are charged either by solar power, or via the grid at the lowest off-peak rates, and can then provide energy during peak demand hours. NantEnergy’s software schedules the charging and switching based on the company’s energy usage, solar availability, and peak pricing, thus saving the most money for customers.
Those savings can range from a few hundred dollars a month for a smaller business to tens of thousands for a large industrial operation. For example, NantEnergy storage solutions are saving Incarnation Lutheran Church near San Diego $1,000 per month by eliminating demand charges that almost doubled its electric bill. Hokto Kinoko, the largest specialty mushroom grower in the U.S., expects to save more than $200,000 annually off its California electric bill thanks to NantEnergy.
Resilient Backup Power for Operational Continuity
In addition to steep demand charges, C&I customers face another growing challenge—one that can also be addressed by NantEnergy storage systems: Grid outages.
Power outages in the U.S. have become more frequent in the past decade, and are lasting longer. A combination of factors is driving this phenomenon, such as overloaded transmission networks, mothballed primary generation facilities, and the effect of climate change on the frequency of severe weather events.
At the same time, some utilities (particularly in California) are implementing Public Safety Power Shutoffs (PSPS) in response to wildfires caused by electric transmission equipment or distribution lines. These PSPS programs call for lines to be de-energized in windy areas of dry vegetation, where a spark could cause a wildfire. The sudden nature of these conditions necessitate that outages occur with little notice—impacting widespread areas, and lasting for many hours, in some cases.
Altogether, power outages cost U.S. businesses $27 billion a year, according to energy consultancy firm E Source. They pose a particular problem for customers such as hospitals, schools, food processing and storage facilities, communications towers, or anywhere that long power outages create a risk to health, safety, or perishable goods. Solar+storage, however, offers a solution that provides resilient power for significant duration.
For example, NantEnergy’s SmartStorage systems were installed at six sites within the Santa Rita Union School District in Salinas, California. The systems provide up to seven hours of power at each school during a grid outage while at the same time offsetting the school’s energy and demand usage. These innovative, multi-campus systems will enable the schools to support the community as Powered Emergency Response Centers during disasters that cause prolonged outages. This project was deployed under an “energy as a service” (EaaS) model and is ideally suited for other schools and community assets owned by local governments.
Making the Choice Easy with Financing and Performance Guarantees
Of course, putting these solutions into place can create challenges, such as the upfront capital needed to install systems that deliver payback over time. To address that challenge, NantEnergy offers innovative EaaS financing options, for both new solar+storage systems as well as retrofitting storage onto existing solar installations.
These financing options let customers conserve working capital without affecting business credit, and allow them to continue using their existing financing resources to fund operations and growth. NantEnergy offers this financing either directly to customers, or through qualified channel partners involved in the design and installation of larger projects.
Depending on the project, power purchasing agreements for solar+storage systems are available for up to 25 years. For customers that want to retrofit a legacy solar system with a NantEnergy storage component for resiliency and peak demand savings, there are 10-year, storage-only lease options available.
In addition to reaping the solar tax credits by re-charging batteries via solar at all sites, our performance guarantee is another unique benefit of these financing arrangements, and it ensures the storage system delivers the promised energy savings. By intelligently managing charging sources, scheduling, and power dispatch from storage, NantEnergy’s system control software makes that performance guarantee possible.
And that means customers have complete financial certainty from the system.
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“NantEnergy systems deliver these outsized benefits by reducing demand charges for C&I customers. Utilities increasingly charge non-residential ratepayers based on what time of day they use their electricity. According to a recent National Renewable Energy Lab (NREL) study, these charges can account for up to 70% of an electricity bill.”
Seventy percent of one’s electric bill stacked up in ‘demand’ charges. The electric utility industry is going to courts and arguing their case of changing net metering to net billing. With a roll out of net billing taking over where net metering was, the utilities will have succeeded in diluting the worth of rooftop solar PV. First the electric utilities want to credit the solar PV adopter at wholesale electricity prices for excess energy pushed back onto the grid and then, put in place TOU ‘demand charge’ rates that spike just after solar PV generation starts to roll off for the day. Yeah, ‘allow’ credits of one third the previous rate of net metering, to the wholesale rate of net billing, then slapping the solar PV adopter with electricity rate increases of from twice to perhaps four times the daily electricity rate for the specified TOU period every night. This is not just for C&I customers, it is for all grid users.