Published on May 23rd, 2016 | by Tina Casey8
Energy Storage Could Break Low Income Rooftop Solar Bottleneck
May 23rd, 2016 by Tina Casey
A trio of non-profits has come out with a report that makes a strong case for deploying energy storage plus on-site solar for low-income rental housing in California. The analysis projects that under today’s market conditions, the combo has a quick payback and would whittle electricity bills down to practically nothing.
To be clear, the analysis covers the electricity bills of the housing owner, not the tenants. Providing low income renters with the benefits of solar energy storage is a whole other can of worms, but the non-profits do have some suggestions on that score.
The Low Income Solar Energy Storage Report
Public agencies are major owners of low income housing, so assuming that the analysis holds up under scrutiny, there is a direct and significant general public benefit to promoting on-site solar plus energy storage for low income housing, even if the tenants do not see a change in their personal electricity bills.
Also worth noting is the fact that the housing owner’s electricity bills can really rack up when you’re talking about large buildings with elevators, lighted parking lots and other common areas.
Resiliency is another major concern for housing owned by public agencies, and solar plus storage fits the bill as an alternative to emergency diesel generators in case of power outages.
The new report, titled “Closing the Clean Energy Divide: Reducing Electric Bills in Affordable Multifamily Rental Housing with Solar+Storage,” was authored by the California Housing Partnership, the Center for Sustainable Energy, and the Clean Energy Group.
The report notes that energy is one of the few expense items that can be controlled in order to reduce the operating budget for low income housing, and energy efficiency has been targeted for action over the past 40 years. However, the limits of that approach are becoming apparent and a new strategy is needed to get to the next level.
The emergence of on-site solar was just that kind of game-changer, and California has been a leader in promoting rooftop solar for low income housing. However, the authors argue that the full potential of solar is not realized when you simply plop some PV panels on a rooftop and hit the “on” button:
…the next step in cost reduction will require more integrated strategies that enable property owners to better manage energy demand, improve the financial return on energy investments, and create more resilient and sustainable energy systems in affordable housing.
The report is an easy read, but for those of you on the go here is the key finding:
Under current utility rate tariffs, the combination of solar and storage technologies could virtually eliminate electric bills for many owners of affordable housing properties.
I know, right? By “virtually eliminate,” the authors mean that the annual electricity bill under solar energy storage would add up to a few hundred dollars, which is practically nothing compared to the tens of thousands typically incurred by public housing agencies.
The main cost-saving factor is that energy storage helps large property owners minimize or eliminate their take from the grid during peak use hours, buffering them from high demand charges during those hours.
While on-site solar alone does result in some savings, the analysis finds that the addition of energy storage sweetens the pot quite a bit:
For example, the addition of a $112,100 battery storage system to a $385,000 solar installation increased savings from $15,000 per year to $27,900, an 85 percent increase in savings for only a 29 percent increase in cost.
The increased savings results in a shorter payback period for the solar installation, by more than three years under certain conditions. That helps housing agencies make a bottom line case for investing in on-site solar.
The $1 Billion California Solar + Energy Storage Race
The report is timely because of the recently passed bill, California Assembly Bill 693, which established the Multifamily Affordable Housing Solar Roofs (Solar Roofs).
Solar Roofs is the largest program of its kind in the country. It pledges up to $1 billion over the next ten years to deploy on-site solar at affordable rental housing over the next ten years.
The program covers multi-family housing, and it could potentially result in rooftop solar for about one-third of the existing properties in that category.
In Crossing the Clean Energy Divide, the authors argue that including energy storage in the Solar Roofs program is a bottom line investment on two fronts. Energy storage provides clear economic benefits under the current regulatory framework, and it also shields low income housing tenants (and owners) from financial risk should that framework change:
…uncertainty about the future direction of California’s solar regulatory environment raises the issue of whether economically vulnerable affordable housing residents should be exposed to the future financial risks of stand-alone solar systems and how they should be assisted in mitigating such risks with the immediate consideration of energy storage systems.
Crossing the Clean Energy Divide is the first in a series of three reports making the case for solar energy storage in low income housing. Stay tuned for the next two, which cover investment modeling and value preservation.
Solar + Storage For The 99 Percent
Passing along some of those benefits directly to tenants in the form of lower (or no) electricity bills presents a different kind of challenge. The authors of the new report suggest these potential solutions:
Possible scenarios include a greater share of solar generation being allocated to offset tenant electricity usage, a shared savings model where tenants are allocated a portion of demand charge savings, or applying some of the expected savings to cover the additional cost of making a building more power resilient during power outages.
The nonprofit organization GRID Alternatives is already working in that direction, with a grant-funded solar installation program for low income multi-family housing.
Even without a direct impact on personal electricity bills, rooftop solar can be (and is being) deployed to provide employment and other economic benefits to underserved neighborhoods, one recent example being a gigantic 16.4 megawatt rooftop solar project on a Los Angeles warehouse complex.
Another type of indirect benefit could come about from the efforts of the solar organization RE-volve, which has obtained Energy Department funding to ramp up a low cost solar loan program for non-profits. With electricity bills reduced, non-profits that provide low income services can deploy more of their resources toward their mission.
We’re also going to keep an eye on the Obama Administration’s coal-killing Better Buildings initiative, which just enrolled the massive New York Housing Authority among its 300+ private and public partners.
This spring, the Housing Authority released an upgrade plan that calls for installing 25 megawatts of rooftop solar on its properties by 2025. The plan also includes a solar plus energy storage system for its Red Hook East and West houses in Brooklyn.