Solar-Plus-Battery Systems Could Significantly Reduce Grid Loads

Grid-connected solar-plus-battery systems could soon supply the majority of customers’ electricity needs, according to a new analysis from the Rocky Mountain Institute (RMI).

In its 2014 analysis, The Economics of Grid Defection, RMI found that in the coming years, some residential and commercial customers will find it economical to defect from their utilities and the electricity grid and supply themselves with power from solar-plus-battery systems. However, the number of customers who would actually choose to defect is probably small. Customers are more likely to invest in grid-connected solar-plus-battery systems.

In its new analysis, The Economics of Load Defection, RMI evaluated the economics through 2050 for a median commercial and residential customer in five cities representing a diversity of electricity pricing and solar resource intensity. RMI modeled forecasts for grid only, grid-plus-solar and grid-plus-solar-plus-battery configurations to find the lowest-cost option over time. It also examined the relative contributions of grid- and self-supplied electricity for the lowest-cost option over time.

RMI’s analysis includes the following findings:

• Solar-plus-battery systems will become cost effective for the majority of the country within the next 10-15 years.
• As retail electricity prices from the grid increase and solar and battery costs decrease, customers will reduce their grid purchases until the grid takes a backup role. Solar-plus-battery systems will eventually provide the majority of customers’ electricity.
• Under the current rate structure and business models, potentially large kWh defection could undermine revenue for grid investment.
• While some argue that abolishing net energy metering (NEM) will preserve grid load, RMI’s findings suggest that eliminating net metering merely delays inevitable, significant load loss.
• Investing in their lowest-cost option for electric service through grid-connected solar and solar-plus-battery systems can effectively cap customers’ electricity costs.

Although RMI’s findings show that utilities’ kWh sales loss to grid-connected solar-plus-battery systems could be significant, such systems can potentially provide value back to the grid, especially if value flows are monetized with new rate structures, business models and regulatory frameworks.