The media has recently been full of stories about electric utilities being nervous and down right reactionary to adding solar (and wind) on the electric grid. On October 15th, The Huffington Post’s story on the Hawaii Electric Company (HECO) reported, “hundreds of Oahu customers have gotten burned in their transition to solar. They have gotten caught in limbo since September 6 when HECO changed the rules for connecting solar systems.”
Business Week in August highlighted the Edison Electric Institute (EEI) report, “An unusually frank January report by the Edison Electric Institute (EEI), the utilities trade group, warned members that distributed generation and companion factors have essentially put them in the same position as airlines and the telecommunications industry in the late 1970s. “U.S. carriers that were in existence prior to deregulation in 1978 faced bankruptcy,” the report states. “The telecommunication businesses of 1978, meanwhile, are not recognizable today.”
The National Renewable Energy Laboratory just released a study on electric utility recycling costs, titled "Emissions and Costs of Power Plant Cycling Necessary for Increased Wind and Solar in the West." They concluded that utilities do not lose money cycling their generation up and down to follow variability in solar and wind — it would cost them under $200 million (operations & maintenance and fuel) and they would save upwards around $7 billion in fuel costs.
As this inevitable evolution within the U.S. electricity industry evolves, U.S. distributed energy consumers are becoming the punching bag. But they need not be.
The solar industry, building owners, facility managers, and homeowners need to think about solar as an internal demand reduction strategy rather than an electric grid augmentation approach.
Why do I state this?
In general, the idea and benefits for net metering is that a residential, commercial, or institutional building owner installs a solar electric system, and any extra electricity they cannot use on-site at that time gets sent to the electric grid and they are then credited for this electric power. This saves the customer the costs of battery storage and allows the utility to have midday power, especially during the summer when this period has high midday electric loads. I am a big supporter of net metering, especially when it neatly coincides with increased midday loads and offsets the need for older, more polluting, and higher-cost peaker generation plants or wheeling power in from other service territories or States.
But what happens if the electric utility just doesn’t need midday electric power or, more likely, is just throwing up road blocks like HECO and others?
My company for the last 13 years blends renewable energy and high value energy efficiency along with energy storage. Most companies, institutions, and the military call on my firm because they want it combined with energy storage. The solar photovoltaics systems I recommend, in most cases, have battery banks that are dedicated to critical functions and do not ever interact with the electric grid. The benefits are many, and greater use of distributed generation with web-enabled battery banks may become a valuable solution to this electric utility push-back.
The comments I always get are that batteries are too costly, are not reliable, and add complications. My response is “there is nothing further from the truth.” I have hundreds of large scale renewable-charged battery systems running globally for over a decade without one problem.
By isolating circuits and dedicating battery banks to critical circuits in a building, facility, or campus, you provide absolute reliable power. By web-enabling the battery banks, meaning only diagnostics, the customer knows if their batteries are full, and if certain batteries’ state-of-charge falls below the other batteries or increase in temperature, they can be switched out before there is a problem.
The electric grid had poor electric power quality, meaning over-voltages (surges), undervoltages (sags) and transients (spurts of electrons), which all seriously harm digital equipment. Most of the equipment and appliances in our homes and offices are digital. Battery banks provide extremely clean electric power and if totally dedicated to circuits, that electric power provided is far superior to electric grid power quality.
If solar-charged battery banks are dedicated to internal circuits and isolated completely from the electric grid, there is no need to interact with electric utilities. In fact, that’s what most of my corporate and military clients do. No interconnection fights, these circuits are just pulled off the electric grid forever and are now 100 percent renewable energy powered. In fact, it’s like screwing in a CFL or LED light that reduces the electric lighting load forever.
By adopting a solar-charged dedicated system, the consumer saves on electricity bills, does not require diesel or other back-up power solutions, and does not require power conditioning or surge protection equipment. My Arlington home and my Virginia office building have dedicated battery banks, and I have never had an outage in 28 years.
Batteries are in a technology renaissance with great advances in material science within the military and spurred by the cellular, laptop and hybrid vehicle markets. In my own business I work with 27 different types of batteries from 59 companies. Almost all the batteries I work with are sealed (no maintenance) and have 7–10 year warranties. Energy diagnostic and management software for electric systems including batteries is also in an evolutionary stage providing more intuitive diagnostics that is more accurate and in “real time.”
On-site energy generation is on the ascendancy. And for commercial and institutional customers, in particular those who value electric power reliability and outsource back-up generator testing, repairs and fuel switch-outs as well as power quality equipment routine replacements — the costs favor renewable battery systems. Residential customers also gain from this approach by having their refrigerator, sump pumps, electronic ignition on natural gas appliances, wifi and computer working during power failures (and electric loads are always off their electric bill).
A recent survey by PricewaterhouseCoopers of global utility companies reveals that the industry anticipates big changes to its business model in the near future, attributing much of the predicted transformation to the rise of distributed generation and the growth of renewable energy sources. In North America, 40 percent of respondents believed that utility companies' means of making a profit will see major changes over the next two decades. A strong majority — 82 percent — of North American respondents also said future energy needs will be met by a mix of traditional centralized generation and distributed generation, which feeds power from a mix of sources.
So instead of leaving photovoltaics systems unplugged in so many states due to electric utility pushback — a clear resolution is to put these systems back to work now via dedicated on-site systems with electric storage.
Millions of people have solar water heating, geothermal heat pumps, CFLs/LEDs and solar daylighting systems which reduce electric load significantly and forever. So why shouldn't on-site solar-electric, small wind and other distributed generation systems be enlisted to perform the same service? Energy storage allows the consumer maximum freedom while electric utilities — under fit and starts — enter the 21st century.
Well known energy lawyer Mike Zimmer says, “our energy approach uses 19th energy technologies over a 20th century grid for 21st century solutions.” I couldn’t agree more. It’s time to change the agenda, and this is one practical approach while public policy, regulations, and the market catches up.
Lead image: Solar roof via Shutterstock