rooftop solar and behind the meter

A few weeks ago, Peter Rive, the Co-Founder and Chief Technology Officer of SolarCity, posted a blog entitled “Put Battery Storage in the Hands of Grid Operators”. In his post, Mr. Rive argues that while battery storage for residential, commercial, and utility-scale customers is one of the most anticipated developments in the energy space and might allow consumers to “cut the cord” on their relationships with utilities, that would be a bad idea. Mr. Rive suggests that grid operators, not electricity consumers, are best positioned to optimize the use of storage technology:

Grid operators are best-positioned to direct battery storage to discharge clean energy at optimal moments—for example when demand is at its highest, and when grid infrastructure is most under strain. Without this storage capacity, solar penetration in excess of 60% of mid-day peak could become problematic for the grid, as utilities have to contend with an abundance of power which can cause voltage and power balance issues.

However, with storage in the hands of grid operators and utilities, this problem becomes an immensely powerful solution. In this scenario, grid operators are suddenly empowered to store and discharge solar energy where and when it's needed most, smoothing out peaks and ramps, while powering more of the total grid consumption with clean and renewable sources. Additionally, utilizing storage to unlock massive benefits in the areas of frequency and voltage support can further lower grid costs. Many of these capabilities are available now through distributed resources, even without storage, and we should work together to put them into the hands of utilities for the benefit of the ratepayers.

First, let me be clear: I completely agree with Mr. Rive. On an optimized power grid, the grid operator would control the storage resource for all the reasons that Mr. Rive suggests. An optimized storage resource would be deployed on distribution systems proximate to the customer in order to maximize the value and flexibility of the resource. But its dispatch would remain under the control of a central entity that could optimize its use on, and minimize its cost to, the grid.

The surprise for me in reading Mr. Rive’s post was not its argument but its source. For while Mr. Rive makes a valid point about the optimal use of storage on the grid, one could, of course, make that same point about generation.

It is near axiomatic that electricity generation is done most efficiently at scale. For example, it is far cheaper and more efficient for a grid operator to deploy 100,000 solar PV panels in a field than it is for 100,000 commercial and residential customers to put a solar panel on their rooftops. If the deployment of solar PV electricity was driven entirely by considerations of system cost and optimization, SolarCity and its competitors would not exist (at least not in their current form).

The market for rooftop solar PV exists for three reasons:

1.   There are a number of electricity customers that wish to do their part to improve the environment by deploying rooftop solar PV systems, and they are willing to pay a premium to do so.

2.   There are a number of electricity customers that value the increased reliability that comes from supplementing their supply of electricity with self-generated solar PV, and they are willing to pay a premium to do so.

3.   How society allocates the huge incumbent costs of the electricity grid across all electricity customers is entirely a political question. The kind of customers that are inclined to deploy solar PV on their rooftops, together with the business interests that service them, comprise a powerful political block. That block has the power to ensure that incumbent grid costs are allocated to the owners of rooftop solar PV systems in such a way as to reduce or eliminate the premium that the owners would otherwise have to pay.

My point is not that this is right or wrong. My point is simply that this is what is. What concerns me about Mr. Rive’s post is its implicit assumption that the factors that have driven adoption of rooftop PV solar systems apply only to rooftop solar PV systems and not to other customer-owned technologies that promote clean, reliable power, such as behind the meter storage.

How the grid will evolve over the coming decades is a fascinating question about which we can only speculate as to the answers. One hopes that its evolution will be driven as much as possible by the goals of efficiency and optimization. But one knows that its evolution will be driven by other factors as well.

I applaud Mr. Rive for his concern about the optimization of the grid. But there is no reason to believe that the same factors that have driven less than optimized deployments of customer-owned rooftop solar PV systems will not also drive of less than optimized deployments of behind the meter storage.

Photo Credit: Rooftop Solar and Behind the Meter Storage/shutterstock