The decreasing cost of solar PV and battery storage equipment coupled with high cost of electricity and grid outages are playing an increasingly important role in the future energy landscape of the Caribbean region. Most recently, Hurricane Maria devastated multiple islands including Puerto Rico, Dominica, USVI and BVI, amongst others, which left both urban and city dwellers without power for extended periods of time.
The Caribbean region is home to over 28 island nations and more than 7,000 individual islands with a combined population of around 40 million, and all of the islands are exposed to disasters. Solar PV plus energy storage technologies, coupled with financing solutions, are becoming an increasingly popular option for homeowners throughout these islands. This combination of technologies presents a tremendous opportunity to bring resiliency to island regions.
One of the key takeaways from the recent natural disasters is that fossil fuel -based standby backup power generators are not an ideal solution for homeowners seeking to establish resiliency in the event of a grid failure. Standby generators have gained popularity among homeowners due to their low upfront cost and reliability for short duration power outages.
Despite offering a low capital cost of entry for homeowners, the expenses associated with standby generators are incurred over the lifetime of the asset. Standby generators do not act as a power solution in the event of long-duration power outage, for several reasons. It is very common for generator owners not to maintain their system by performing annual equipment servicing. Generators are contingent on the availability of fuel to power their systems but propane, natural gas and other liquid fuels quickly become scarce when the grid fails. This is especially true in island regions that are heavily dependent on the importation of fossil fuels. Even with a generator in place, there is no guarantee that fuel can be sourced to power it, especially in the event of a long-duration power outage.
Further, generators are noisy, create ground-level emissions in urban environments, require a significant footprint and typically require fuel delivery and on-site storage. Getting fuel to an urban generator is a nightmare, as is storing the fuel. In the event of a major natural disaster where infrastructure has been destroyed, there will likely be no means to transport fuel to residential customers. Collectively, standby generators provide a cost-competitive solution for short-duration power outages but they are not a reliable power source for long-duration power outages.
Eguana Technologies residential energy storage system provides backup power and various grid services
Residential solar PV systems are another emerging trend throughout the Caribbean market. This trend is being driven by new, lower-cost solar equipment, new financing models and, on the other side, the increasing cost of electricity. Homeowners investing in solar PV generating assets are now looking to couple their solar arrays with residential battery storage systems that allow them to store excess energy production for use at a later point and also to provide a backup power solution for when the grid fails. From an environmental impact standpoint, households investing in a solar PV array are committed to reducing their carbon footprint. The integration between the solar PV and battery system allows for a clean energy battery backup power system.
Backing up essential loads with a constant and stable power source without the cost of running and servicing a generator is the big advantage of a ‘solar PV plus energy storage’ system. Residential energy storage systems require no fuel or maintenance, and they produce no noise or emission. These systems can be installed indoors or outdoors, including in primary or secondary living spaces, they have a very small footprint.
Lithium battery technologies have become significantly cheaper as well as more energy dense, and offer a tighter form factor than alternative solutions such as lead acid batteries and some believe this titght form factor is more aesthetically pleasing. Advancements in lithium battery technologies, primarily driven by the consumer electronics and electric vehicles markets, have paved the path for what is now an industry standard 10-year warranty with an expected product life cycle of 20 years.
Today, energy storage systems provide significantly more value than standalone backup power systems because new software has emerged to expand the capability and functionality of energy storage. Based on different rate structures and utility programs, the value proposition of energy storage systems may differ by region. However, their underlying functionality remains cohesively consistent:
- Self-consumption is the ability to store excess solar PV produced during the day and used at a later point.
- Time-of-userate shifting means that the system stores solar PV or grid supplied energy for use when electric rates are the highest.
- Smart home energy managementis achieved through an energy management platform that continuously optimizes the home consumption, solar PV production and state of charge of the batteries.
- Remote monitoring capabilitiesare easily achieved through the use of either a smart phone or a web portal.
From a cost perspective, the price of solar PV plus lithium battery technology has plummeted over the past decade and are expected to continue to decrease while, at the same time, the availability of system components selection is increasing. Investment tax credits, product financing and various other financial tools assist homeowners in reducing their capital expenditure.
While the payback on the initial investment varies depending on a series of factors., the daily utilization rate of a solar PV plus energy storage system is 100 percent, as the system will perform any number of functions including self-consumption, time-of-use rate shifting, or backup power. In contrast, in a grid failure situation, a standby generator will only perform if the generator is in an operating condition and fuel is readily available.