Clean DERs to the Rescue: Solar+Storage as Back-up Generation

For U.S. electric customers, awareness of resilience and reliability has heightened in recent years. Among other factors, this is prompted by outages arising from more-frequent and more-ferocious hurricanes, rampant wildfires, winter storms, and preventative power shut-offs by utilities. Many areas also face ongoing threats of outages. In response, customers are increasingly turning to back-up power sources.

Historically, back-up generators that provide on-site resilience were powered by fossil fuels (e.g., diesel, propane, natural gas). Today, that is no longer the default. Thanks to newer technologies, sinking costs, robust financial incentives (including tax incentives available under the federal Inflation Reduction Act) and recognition that burning fossil fuels ultimately contributes to outages, clean distributed energy resources (DERs) are more frequently serving as back-up generation. Clean DERs that can provide on-site resilience and reliability include battery storage, solar photovoltaic-plus-energy-storage systems (PVESS), and some electric vehicle (EV) charging applications. Clean DERs can power critical loads or provide whole building back-up for homes and non-residential buildings.

Further supporting the use of on-site PVESS as back-up generation, a new study published by Lawrence Berkeley National Lab (LBNL) analyzed the capabilities of behind-the-meter (BTM) PVESS to provide critical-load or whole building back-up power during synthetic events across a broad range of U.S. geographies, building types, and power interruption conditions. Similarly, LBNL evaluated how PVESS would have performed in providing back-up power during 10 historic events with outages exceeding 24 hours. Key takeaways for PVESS serving single-family detached homes include:

• Performance primarily depends on system sizing and the selected critical loads. When excluding heating and cooling loads, a smaller PVESS (10 kWh of storage) can fully meet basic back-up needs during a three-day outage in virtually all U.S. counties in any month.
• Coverage of heating and cooling loads varies considerably by region, depending on climate and building stock. Performance is generally lowest in regions where electric heating is common and in regions with large cooling loads.
• Performance can differ considerably within regions, based on variations in the underlying building stock, including energy efficiency and temperature set-points.
• Performance modestly declines as the duration of an outage increases due to the ability of solar energy to recharge the battery system.
• Most homes with a larger PVESS (30 kWh of storage) would have been able to maintain critical loads with heating and cooling for 70% of the analyzed historical outage events. Notably, wide variability due to differences in solar-insolation levels existed across the five historical hurricanes analyzed.

An Emerging Opportunity for Utilities
SEPA is now seeing clear signals from utilities of their interest in providing DERs as a service to their customers, often with a primary focus on resilience. According to the 2022 SEPA Utility Transformation Survey, a comprehensive survey of IOUs, public power utilities and electric distribution cooperatives conducted in 2022, 43% of utility respondents already offer one or more services under which the utility owns and maintains (or owns and contracts with another party to maintain) a customer-sited DER, such as PVESS. Early next year, SEPA plans to publish the 2022 SEPA Utility Transformation Profile, which will present results, analysis, insight and conclusions distilled from the SEPA Utility Transformation Survey.

Utilities are offering these services due to declining costs, robust financial incentives, and new market opportunities for solar and energy storage. In addition, utilities increasingly view customer programs and services as a pathway to helping themselves and their customers achieve carbon-reduction targets. Utilities are eager to expand carbon-free choices available to their customers, with some utilities indicating that if their customers can’t access attractive clean energy options from the utility, they will look elsewhere.

State regulators seem cautiously supportive of this model, especially when resilience is the primary focus. State regulatory support is especially important for investor-owned utilities. For example, utility regulators in Georgia and Wisconsin have approved resilience-as-a service pilot programs for Georgia Power and Xcel Energy, respectively. Georgia Power’s 250-MW DER Customer Program will offer non-residential customers a resiliency service via a DER, such as a PVESS, that is owned, operated, and maintained by the utility. Participants also may choose to receive a credit by allowing Georgia Power to access the DER during a system reliability event. Xcel Energy’s Empower Resiliency program offers non-residential customers resilience improvements, initially owned and maintained by Xcel, which the customer pays for via monthly bills over an agreed-upon time period. Xcel’s program is technology-agnostic, with resilience technologies that could include solar and battery storage, as well as microgrids or fossil-fuel generators.

Utility proposals to create similar services are currently pending before regulatory commissions in other states, including California and Minnesota. SEPA expects utilities to expand efforts to offer on-site resilience services, including PVESS, to more customers.

What’s Next?
LBNL is planning further analysis into the back-up power capabilities of PVESS, including synergies with other DERs such as energy efficiency, electrification measures, and load flexibility. LBNL is also planning to explore some of the important trade-offs that customers face in reserving storage capacity for interruption events versus employing their battery storage for other purposes, including the provision of grid services to their utility. These findings should help current and prospective PVESS providers, including utilities, further understand the value and use of these systems. It will also help prospective PVESS customers better understand their performance during outages. SEPA members and others interested in learning more about these studies or in providing input into their research design are welcome to reach out to Galen Barbose at LBNL.