SolarCity Shows How Utilities Can Benefit From Solar

Originally published on Solar Love.

SolarCity has proposed a ceasefire in the war between utility companies and providers of distributed renewable (DR) energy. Many utilities are frankly frightened at the rise of DR resources such as rooftop solar, community solar, and battery storage systems.

They have trillions of dollars invested in generating plants, transmission lines, sub-stations, and transformers, and they are scared to death they are not going to be able to amortize that investment. In other words, they’re afraid distributed renewables are going to eat their lunch.

Fear Of Change

Many people hate change; it seems to be a natural human instinct. In the automotive business, dealer groups all across the country are furiously lobbying their elected officials to protect their long-standing monopolies. In the utility business, the response has often been new monthly charges for customers who install rooftop solar systems, long delays approving new systems, and months of delay getting them connected to the grid once they are installed.

In a white paper authored by Ryan Hanley, SolarCity director of grid engineering solutions, entitled Integrated Distribution Planning, SolarCity proposes a way to get all the new grid resources and their uses organized so they can be put to the best use by power companies and system operators. The bottom line is, SolarCity wants to reassure the utility industry that distributed renewables can save it money, not cost it money.

By modernizing utility interconnection, planning, procurement, and data sharing processes, utilities and distribution system operators can capture the benefits of DRs in bundles to both meet distribution needs and expand customer choice, according to Utility Dive.

Let’s Break It Down

Okay, much of this information is a little dense. It involves state and grid-mandated loading orders — the protocols that specify which resources will be called upon first to meet the demands of utility customers. SolarCity is saying to the utilities, we will promise to fulfill your needs, just as if we were a traditional generating plant. But you have to share your information with us so we can accurately project and predict those needs.

“Today, a utility thinks of control as a [link] going directly to a generator,” Hanley said. “In the future, a utility controls our assets through an interface at a substation.” His plan is to “streamline the DER interconnection process, eliminate unwarranted costs, and expand allowable interconnection approvals.”

Up until now, utility companies have kept a lot of information in-house. SolarCity believes that sharing that information is critical to it being able to marshal all its assets — rooftop solar, residential storage batteries, grid-scale batteries, and the batteries of electric cars connected to the grid — to meet the demand for power.

Making A “Smart” Grid

What most people don’t realize is that those demands vary second by second. A smart, interconneted grid can stop charging a car battery in Marin County if there is an instantaneous need for electricity in San Jose. A smart water heater in a house in Fresno can be told to wait a few minutes while the needs of refrigerator in San Francisco are met.

The ability to have such second-by-second control over the grid is the key to the SolarCity proposal. And it says that, by doing so, utility companies will be able to save billions of dollars by not building more generating capacity, by not constructing more transmission lines, and by not installing and maintaining new sub-stations. It’s the “internet of things” approach.

Backing Up Words With Actions

SolarCity is willing to put its money where its mouth is, too. “The utility gets what it needs every single time because we have a firm contract to deliver,” Hanley said. “The way we make money is getting good at optimization, at making sure our assets are available.” Utilities need be no more concerned about SolarCity fulfilling its “contract to deliver” than they now are about central station power plants meeting their obligations. “The key is to make the financial disincentive so punitive that people show up. We are ready for that.”

What the paper proposes “is a new paradigm and it will take time,” Hanley said. “But utility engineers think about DRs like any technology and are becoming more comfortable with them every month. As [distributed renewables] become cheaper, [utilities] will use more of the products. It is already reaching a tipping point.”

Image Credit: SolarCity