Many states and utilities have created net-metering programs, which provide energy credits for solar generation exported to the utility grid, but as more renewables have come online, this has become more difficult to manage as the curve of the typical load profile across the utility has changed.
The California Independent System Operator (CAISO) has been tracking their “duck curve” of actual and projected net loads across their infrastructure (figure 1). Plotting their observations and projections, one can see clearly how the rise in solar generation capacity in the state has upended the traditional load curve utilities have been seeing for decades. Note that where there was a relative flatness to the load in the middle of the day before a rise in the evening hours in 2012, we now see a pronounced dip in the afternoon due to that being the period of greatest solar generation. At the same time, the evening hours are continuing to increase their demand on the grid.
In response to this changing load curve, utilities have begun shifting their “peak” rates later in the day to match the period of the highest net load, when energy consumption has increased but solar generation is tailing off. What this means is that sites that have done will economically with solar-only installations are now providing less value because the peak demand seen by the utilities is now during the peak pricing period as well.
It is the combination of this shift in the peak-pricing time of use as well as the aging transmission infrastructure that makes a coordinated microgrid not only more economically feasible but, in many cases, a necessity. In order to avoid the highest demand charges a utility will levy, facilities must find a way to shift their load profile to avoid the evening peak consumption. This kind of load shifting—and peak demand shaving—can be accomplished by pairing solar generation with an energy storage medium. In this configuration, some of the solar generation that would normally flow back over the meter onto the utility grid for net-metering credits (or even be curtailed if net metering is not allowed), now goes to charge energy storage.
Though there are losses in charging and discharging energy storage, these are more than made up for if the battery is charged from an inexpensive renewable resource and discharged during a peak demand period for the utility. Consider the fictitious scenario of a light industrial facility in the greater Los Angeles area. With solar-only operation, we would see the following energy flows over a typical summer week (figure 2):
Note the red arrow. PV has run out for the day, but the facility load is still high, causing a peak demand at the very worst and most expensive time. But these peaks can be mitigated with the addition of energy storage. Given the same facility, but combining the installed solar with 450 kWh of storage, we see resulting operation like this (figure 3):
The red arrow indicates the peak demand of the facility, but now we see that it’s displaced largely by stored energy discharge—energy that was charged by excess solar generation. The missed opportunity of any foregone net-metering credits and the loss of energy due to battery inefficiency will be more than made up by the reduction in very expensive peak demand charges illustrated by the horizontal red lines and the blue arrow between.
In addition to load shifting and peak shaving opportunities, combining storage with your solar installation can also enable various amounts of energy resiliency by using the charge in your energy storage to carry you through smaller utility outages. Even better, there are many incentive programs available that significantly reduce the up-front capital expenditure involved with installing energy storage as part of a microgrid.