By Vic Shao
The past few weeks of sunny weather have been paying off, literally, for California’s solar companies. On March 16th the state set a new record by drawing more than 16% of our energy use from solar energy. But even that isn’t enough for those of us that want to see our communities reach net zero.
“Net Zero” has become a rallying call for communities nationwide to ensure that new buildings do not add to the accumulation of greenhouse gases. The City of Cambridge recently kicked off a Net Zero Task Force to figure out how to implement a new, Net Zero building code. Lancaster, California has gone even farther with a mandate that all new single-family homes must come equipped with solar power.
Community-based solutions to attaining net zero energy, carbon, and water are gathering momentum. From Transition Towns in Europe, the over 500 cities in the US that have signed onto the Kyoto Protocol, and the new net zero laws, it’s clear that citizens all over the globe are demanding action.
But we must be careful to demand the right kind of action. Slapping solar panels on the roofs of all new buildings won’t work without a holistic shift in the way we use energy.
This shift starts with energy efficiency and ends with power efficiency. Changing light bulbs and turning down thermostats is a good start to ensure that we are using all of the energy we pull into our buildings in the most efficient way possible. Next is using intelligent energy storage solutions to eliminate peak use and ensure that we are using power efficiently across the grid.
The difference between energy (kWh) and power (kW) is becoming more widely known as more businesses and institutions pay 40% or more of their electric bill in demand charges. These so-called “demand charges” reflect the peak electricity use during a given period.
Unlike residential customers, who just pay a flat rate, businesses and institutions are required to pay for both the energy consumed (kWh) and the rate at which they consumed energy (kW) or “demand” charges. Because the energy needed by these organizations fluctuates greatly, the utility is required to keep a vast array of expensive equipment — transformers, wires, substations — on constant standby, a cost that it passes on to commercial customers in the form of kW charge.
Over the past decade, while kWh pricing has trended downwards, kW (demand) pricing has grown by more than 7% annually in California. Cities and towns that aim for Net Zero via solar must be careful that they don’t accidentally increase their demand charges.
Solar energy and electric vehicles both face the challenge of peak energy. Solar peaks when the sun goes down and electric vehicles require large amounts of electricity, both of which can lead to special demand charges that can increase electricity bills by more than 50%.
The market for combined solar PV and energy storage is growing with Lux Research predicting that it will represent $2.8B over the next five years. Additionally, we estimate that storage could boost investor returns on solar projects by as much as 15%.
Already we’re seeing signs of Net Zero communities using energy storage to achieve their greenhouse gas goals. We’re proud to partner with the City of Lancaster to install their first energy storage system in the High Desert.
It is my hope that more cities across the globe will begin to see the economic and environmental merits of a holistic approach to greenhouse gas reduction.
About Vic Shao: Vic is Chief Executive Officer of Green Charge Networks, an intelligent energy storage startup based in Silicon Valley. Since 2009, Vic led the company through its US $12 million smart grid project with Con Edison of New York, the US Department of Energy, and Fortune 500 customers on an ROI-driven energy storage GreenStationTM. With more than 15 years experience in software development and complex system implementation, Vic is passionate in applying software to improve power efficiency.
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