Two new reports show customer-sited energy storage is one of America’s fastest-growing energy technologies, with record-breaking installations in the second quarter of 2017. Energy storage could soon become a standard offering for U.S. utilities looking to diversify their business models and improve grid resiliency in the face of increasing extreme storms like Hurricanes Harvey and Irma.
GTM Research reports 443 on-site residential and commercial energy storage systems were deployed in Q2 2017, the most ever in one quarter, and expects 591 megawatt-hours (MWh) capacity to be deployed by the end of 2017. In addition, the Smart Electric Power Alliance reports 72% of utilities plan on offering on-site energy storage to residential customers, and 80% plan on offering on-site energy storage to commercial and industrial customers.
U.S. behind the meter energy storage deployment Q2 2017
Fortunately, this trend could have an even larger impact beyond the bottom line for utilities and consumers in an era of extreme weather. Embracing energy storage paired with distributed generation can protect critical infrastructure , help businesses stay open, and keep the lights on during power outages caused by severe storms.
Utilities, Consumers Adding On-Site Energy Storage At Record Pace
SEPA reports utilities added 75.5 MWh customer-sited storage (out of 257 MWh total capacity) in 2016, with the vast majority of capacity (68.2 MWh) going to non-residential customers. California, Indiana, and Ohio utilities added the most energy storage last year, and Illinois, Pennsylvania, Texas, and Hawaii round out the list for most cumulative energy storage deployment.
U.S. non-residential battery capacity added by state, 2016
This pace is speeding up, according to GTM Research. 32 MWh of total capacity was installed in Q2 2017 – the most customer-sited residential and commercial ever installed in a single quarter. Residential growth surged in California and Hawaii, and non-residential deployments grew 151% over Q1 2017, led by California and New York.
Fast-declining technology prices and smart policy have enabled this growth. Battery costs have fallen from $1,000 per kilowatt-hour (kWh) in 2010 to less than $230/kWh in 2016, and could fall to $100/kWh in 2019 – a faster decline than wind turbine or solar photovoltaic (PV) technologies. By some accounts, batteries’ downward cost trend could make solar-plus-storage systems cheaper in the U.S. than even standalone solar PV by 2020.
Forward-looking utilities are embracing this trend by exploring how to offer standalone storage projects and solar-plus-storage to customers as a line of business through sales, leasing, and operations-and-maintenance. Green Mountain Power became the first U.S. utility to offer its customers a solar-plus-storage off-grid service package in December 2016, saying “our energy future is one where more of our energy is generated closer to where it is needed and is home, business, and community-based.” Instead of viewing storage as a competitor for demand, the technology is becoming a way for utilities to expand their relationship with customers and meet shifting demands, which increasingly includes resilient power supplies during extreme weather.
Extreme Weather Creates Extreme Need For Grid Resilience
Hurricane Harvey’s impact on Texas’ energy infrastructure was significant, to say the least. Roughly 300,000 customers lost power during the storm’s peak impact, and while the region’s three main utilities worked around the clock to restore service, they expect rural areas to remain out of service for weeks. Two major transmission lines and about 7,500 MW of baseload generation capacity, enough to serve around 375,000 homes, were still out of service as of September 5th.
RICHWOOD, TX – SEPTEMBER 07: The top of a fire hydrant sticks out of floodwaters in front of a home on September 7, 2017 in Richwood, Texas. Over a week after Hurricane Harvey hit Southern Texas, residents are beginning the long process of recovering from the storm. (Photo by Justin Sullivan/Getty Images)
This threat of extreme weather disrupting service is even more significant with Hurricane Irma, which is the most powerful hurricane ever recorded in the Atlantic Ocean. In Puerto Rico, more than 1 million residents lost power when the storm hit, and officials warned blackouts could last for months on parts of the island. On the mainland U.S., Florida Power & Light is warning its five million customers “to prepare for potentially prolonged power outages” across half of the state.
Long-distance power transmission lines and critical distribution-level grid infrastructure are both susceptible to extreme winds and flooding, and an outage on one part of the grid can create cascading failures because of each component’s interdependence on the others. These infrastructure outages have major economic impacts.