solar power Solar power plus battery could supply most electricity needs in 10-15 years - Electric Light & Power

Solar power plus battery could supply most electricity needs in 10-15 years

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Rocky Mountain Institute (RMI) and Homer Energy released a report, “The Economics of Load Defection,” detailing where and when grid-connected solar power-plus-battery systems could supply most customers’ electricity needs that traditionally the grid would have supplied. As retail prices for grid electricity climb and costs for solar photovoltaic (PV) and batteries continue their decline, grid-connected solar-plus-battery systems present an increasingly cost-effective option for customers in the next 10-15 years in many geographies. The report, which was completed using Homer’s software system, explains just how much electricity load and revenue loss utilities could face, including implications for utilities and regulators and possible paths forward.

Compared to the off-grid solar-plus-battery systems modeled in RMI’s 2014 report “The Economics of Grid Defection,” the grid-connected systems modeled in this report are smaller and thus cost less, making them economic sooner for more customers in more places. As customers adopt the economically optimal configuration of these systems over time, the grid’s contribution to meeting customers’ electricity needs shrinks significantly, while solar PV rises to supply the majority for far lower costs.

“These findings should be compelling for customers and technology providers,” said James Mandel, RMI principal and report author. “No matter how expensive retail electricity gets in the future, customers that invest in these grid-connected systems can contain their electricity costs at or below a ‘peak price,’ yielding significant savings on their monthly utility bill.”

But for many utilities, this customer opportunity could have major implications. Even if only a fraction of customers adopt such systems, utilities could face lost kilowatt-hour sales from central generation, potentially undermining revenue needed for ongoing grid investment and maintenance. For example, in the northeastern U.S., by 2030 maximum residential and commercial load defection could total 140 million MWh and $35 billion annually.

RMI manager and report co-author Leia Guccione said this is not all risk.

“Because these solar plus battery systems are grid-connected, they can offer value and services back to the grid,” Guccione said. “We need not see them only as a threat."

Solar plus battery systems likely will play a central role in the grid of the future. But exactly what role they’ll play has yet to be determined. The evolution of retail pricing structures, utility business models and regulatory frameworks largely will guide that evolution and set the grid on one of two major possible trajectories.

“Today’s electricity system is at a metaphorical fork in the road,” said Jules Kortenhorst, CEO of Rocky Mountain Institute and Carbon War Room. “Down one path are pricing structures, business models and regulatory environments that favor eventual grid defection. Down another road, those same factors are appropriately valued as part of a transactive grid with lower systemwide costs and the foundation of a reliable, resilient, affordable and low-carbon grid of the future in which customers are empowered with choice. That’s why RMI is focused on new utility business models, regulatory reform in places like New York, and accelerated adoption of rooftop solar and other DERs—so that the grid of the future can provide customers reliable, clean, affordable power for decades to come.”

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