utilities fight battery backups wired to solar panels Oct 9, 2013 15:32:18 GMT -6
Post by jeffolie on Oct 9, 2013 15:32:18 GMT -6
Battery-Stored Solar Power Sparks Backlash From Utilities
Oct 8, 2013
California’s three biggest utilities are sparring with their own customers about systems that store energy from the sun, opening another front in the battle that’s redefining the mission of electricity generators.
Edison International (EIX), PG&E Corp. and Sempra Energy (SRE) said they’re putting up hurdles to some battery backups wired to solar panels because they can’t be certain the power flowing back to the grid from the units is actually clean energy.
The dispute threatens the state’s $2 billion rooftop solar industry and indicates the depth of utilities’ concerns about consumers producing their own power. People with rooftop panels are already buying less electricity, and adding batteries takes them closer to the day they won’t need to buy from the local grid at all, said Ben Peters, a government affairs analyst at Mainstream Energy Corp., which installs solar systems.
“The utilities clearly see rooftop solar as the next threat,” Peters said from his office in Sunnyvale, California. “They’re trying to limit the growth.”
California is the largest of the 43 states encouraging renewables by requiring utilities to buy electricity from consumer solar installations, typically at the same price that customers pay for power from the grid. The policy, known as net metering, offers a way for households to reduce their bills. It underpinned a 78 percent surge in the state’s residential installations in the second quarter from a year earlier, according to the Solar Energy Industries Association.
Solar systems with batteries attached have gained a foothold in the market as costs fall, allowing customers more flexibility for using their own power at night or when local supplies fail. The systems average about $12,000 to $16,000, adding about 25 percent to the cost of rooftop power plants, according to Outback Power Inc., an Arlington, Washington-based provider of battery-backed solar systems.
Matthew Sperling, a Santa Barbara, California, resident, installed eight panels and eight batteries at his home in April.
“We wanted to have an alternative in case of a blackout to keep the refrigerator running,” he said in an interview. Southern California Edison rejected his application to link the system to the grid even though city inspectors said “it was one of the nicest they’d ever seen,” he said.
“We’ve installed a $30,000 system and we can’t use it,” Sperling said.
Utilities say the storage systems open the possibility of fraud. The issue is whether all the electricity being sold through the net metering program is generated only by renewable sources, as required. Consumers in theory can fill the batteries with power from the grid and then send it back designated as renewable energy. With the solar-battery systems, there’s no way to determine the source of the energy. Solar suppliers say that’s not happening.
Power-market regulations and the industry’s ability to monitor flows from solar systems haven’t kept pace with the technology, said Gary Stern, director of regulatory policy at Southern California Edison, a unit of Edison International.
“Our rules are not really caught up to effectively include issues with energy storage,” Stern said in a phone interview from Rosemead, California.
The company doesn’t want to “discourage solar” and is working with regulators to come up with “reasonable policies” for battery-storage systems, said Vanessa McGrady, a Southern California Edison spokeswoman.
State regulators are aware of the problem and are working on guidance to offer both solar installers and utilities, according to Terrie Prosper, a spokeswoman for the California Public Utilities Commission in San Francisco.
“There have been some complaints from developers in Southern California Edison’s territory that Edison has inconsistently applied the benefits of net energy metering to energy-storage projects,” Prosper said in an e-mail. The commission is working with all three utilities “to provide formal direction on these issues in the coming months.”
The utilities said they would approve systems that have panels and batteries if they had two meters to verify that only solar energy is sold to the grid. Such a configuration would boost installation costs by at least $1,300, according to Neal Reardon, the state utility regulator’s interim supervisor of customer generation.
The dispute is expanding as California promotes wider use of batteries. Regulators in June proposed that the top three utilities procure 1.3 gigawatts of storage capacity by 2020. The state has set a goal of obtaining 33 percent of its power from renewables by 2020, the nation’s strongest requirement. With more electricity coming from intermittent sources such as wind and sunlight, storage systems will be an important tool to manage the grid.
Demand for the systems may grow as prices decline. Battery costs are forecast to fall 57 percent to $807 a kilowatt-hour in 2020 from $1,893 for a kilowatt-hour of storage capacity now, according to data compiled by Bloomberg. The global market for solar systems combined with energy storage will rise to $2.8 billion in 2018 from less than $200 million this year, according to Boston-based Lux Research Inc.
About 391 megawatts of solar panels were fitted at customer sites across the state last year, according the California Solar Initiative. The price to install residential projects has declined 15 percent to $3.71 a watt in the second quarter from $4.35 a year earlier according to the Washington-based trade group SEIA.
Battery systems are the latest innovation that’s unraveling the traditional monopoly utilities have enjoyed in supplying consumers with electricity. Two decades ago, federal regulators opened the system to independent power producers, eating away at the utility’s control of generation. The battery systems will put more customers out of reach.
“What we are seeing now as a fairly rare event may be more common by the end of the decade,” said Southern California Edison’s Stern.
Mainstream began hearing in May that Southern California Edison was rejecting some of its clients from the net metering program. As many as 60 projects with panels and batteries have been turned down by California utilities, the company estimated.
PG&E Corp. (PCG), the owner of California’s biggest utility, has also rejected standard net metering applications from customers with both panels and batteries, and referred them to another program that requires an interconnection fee.
“The key is that the full retail net energy metering credits and subsidies are only available to renewable facilities,” Lynsey Paulo, a PG&E spokeswoman, said in an e-mail.
San Diego Gas & Electric, a unit of Sempra Energy, said it hasn’t received any such applications, and it would deny them if it did. Sempra slipped less than 0.1 percent to $85.43 at the close in New York. PG&E climbed 1.5 percent and Edison gained 1.1 percent.
‘State of Flux’
“Technically, a customer who now has a combined system that includes both rooftop solar panels and battery storage, the battery storage may not qualify for net energy metering under current rules,” said Stephanie Donovan, a spokeswoman for San Diego Gas & Electric. “The rules are in a state of flux.”
Mainstream’s Peters said Southern California Edison is now rejecting systems that are identical to ones it had approved in the past. The developer had been installing two to three solar-storage projects a week in Southern California at the start of this year. That’s dropped to zero in recent weeks, and some orders have been canceled.
“Net metering is the lifeblood of solar in America,” Peters said. “That’s why this seemingly inconsequential issue is getting so much attention.”
Solar panel owners aren’t trying to “game the system,” said Adam Browning, executive director of the San Francisco-based lobbying group Vote Solar Initiative. “The next step is that people with solar and batteries will find a way to make it work without utilities.”