Published on March 6th, 2014 | by Nicholas Brown


New Player Emerges In Battle Of Solar Vs Utilities: Storage

March 6th, 2014 by  

A battle has been brewing between utility companies and the rooftop solar industry in California, and, of course, it’s about money. They compete with each other because rooftop solar systems enable people to purchase less power from utility companies, but the companies still have a leg to stand on — the fact is that the owners of these systems rely on them for backup.

Energy storage systems are expected to increasingly come online due to declining battery costs, as well as energy storage mandates. As a result of this, utilities are losing control of the electricity market. Not too long ago, lithium-ion batteries cost a whopping $1 million per MWh of storage capacity, rendering them infeasible for cost-competitive grid storage, but now their cost has dipped well below $500,000 per MWh. This, combined with California’s energy storage mandate, is undoing the traditional utility business model, as the use of energy storage can eliminate the need for a grid connection altogether.

Unsurprisingly, utilities are fighting this transition to rooftop solar, and lately, energy storage has become a major part of that, as it is one of the biggest threats they face. Lyndon Rive, the CEO of SolarCity, recently commented at a CPUC panel discussion, stating: “It takes about eight months to connect. There is no reason for it. You can’t help but think that it’s slow because there is incentive to keep the game from changing.”

What other reason would they have for taking 8 months to plug in an energy storage system?

Perseverance Is Needed Now More Than Ever

Mankind has been progressing towards that tipping point where people can install their own energy storage systems with peace of mind. As energy storage systems go online, they get us closer to this goal because their performance will be monitored and everyone else can learn from that. Furthermore, scaling up production brings costs down, as we have seen very clearly with solar panels and wind turbines (as well as countless other technologies).

Although expensive, by introducing an energy storage mandate, California has taken an important step that will lead to the progression of a large-scale energy storage industry, and (if fast enough) a habitable planet for future generations. Utility power companies are sticking around, for now. However, they will have to change their business model soon in order to survive in the long term.

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About the Author

writes on CleanTechnica, Gas2, Kleef&Co, and Green Building Elements. He has a keen interest in physics-intensive topics such as electricity generation, refrigeration and air conditioning technology, energy storage, and geography. His website is:

  • ronwint

    Why would a homeowner want to lease a battery pack at such a high premium that will sell stored solar energy to them at night when they can already purchase power from the utility company at night without having to lease a battery pack? That’s totally absurd. If a grid tie solar system is properly sized to eliminate 100% of the homeowner’s usage, then why would they need a battery pack ?

    I don’t think the S.C. Koolaid drinkers have thought this one through properly. We’ve been selling grid tied battery backup solar systems since 1997 when Trace Engineering was still in business and unless you suffered from frequent power outages, it didn’t make financial sense then with low cost lead acid technology and it sure doesn’t make financial sense now with far more expensive Li-ion technology.

    • Kyle, If one has an on home energy storage system, would they not be charging it at night during often less pricey energy purchasing times, and powering more, if not all, of their home during the day, reducing their use of more expensive day-time grid rates?

      Sure – if they have Solar – and it is net metered, then during the day – that also reduces ones own grid load, and storage seems to supplement that, just balancing any additional day time loads beyond what solar might provide.

  • EV docmaker

    We need high density NiMH for energy storage !!

  • SolarEyes

    Another implication is that home owner
    storage means a shift in political and economic (and literal) power from seller
    to buyer. Eventually this will mean ever constrained margins for utilities, to
    the point where entities like PG&E (a legal person) will have to become a
    PUD that supports a home owner/utility partnership model. This transition is
    likely closer than what was expected just a few months ago. Morgan Stanley is
    predicting a 10-fold increase in US PV over four years. And if a Carbon Bubble
    starts this year, then there may be a swift switch of $7Tn of annual
    investments for new fossil fuels to Wind, Solar, grid development, electrification
    of transport, heating, cooling, and industry, using electrolytic hydrogen for
    some combustion. The complete collapse of the global fossil fuel market may
    arrive within 16 years, largely due to the catastrophic risks and impacts of
    global warming. Carbon assets are now being assets from becoming stranded as
    unburnable carbon. Other motivations of course include the health and happiness
    impacts of toxicity in the air, water, land; and now affordability!

    Stanford Plan for 100% Wind, Water and
    Solar for all global energy needs (heating, cooling, transportation, industry) by

  • “Not too long ago, lithium-ion batteries cost a whopping $1 million per MWh of storage capacity, rendering them infeasible for cost-competitive grid storage, but now their cost has dipped well below $500,000 per MWh.”

    It is nice to get a sense of the cost of in-home or in-business battery systems. Or even utilty-scale batteries, for that matter. Thank you for adding that information.

    I’ve been a battery skeptic until I read that piece of news, but if costs are falling that much, and if they fall quickly enough, then maybe such battery systems are closer to mainstream use that I had realized.

    Cheers, JBS

    • $500,000 per MWh = $500 per kWh, and it is said that Nissan is paying under $260 / kWh and Tesla even under $200 / Kwh, so things are getting even better than reported. If one approached Energy Storage from the Critical, to the important, to the Preferred, on a Residential Home Level; then: Critical Emergency Lighting Power, followed by Refrigerated Food Power, then by Furnace Fan Power; would be followed up by Greater Lighting Coverage, etc. and a plan to build into homes a % of Storage from 5% up to 100% could be planned, if done in modules, such that the grid would be a part player, between it, and Energy Storage, and Roof-top Solar. I See Grid Operators see the writing on the wall and are fighting back, not embracing storage!

  • Kyle Field

    Most of this info felt like padding around the one blip of news “It takes about eight months to connect. There is no reason for it. You can’t help but think that it’s slow because there is incentive to keep the game from changing.”

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