Energy Storage 101
Over the last year, we have seen an increasing number of solar PV design projects that integrate energy storage systems (ESS). Industry forecasts show this trend continuing—speeding up even more, in fact. Whether residential, commercial or utility-scale, the solar industry is quickly becoming the solar-plus-storage industry. In this, and future, blog posts, we will explain the ins and outs of energy storage as it relates to solar PV. To start, let’s build a foundation through some important ESS terminology abd common applications.
While ESS technology is advancing quickly, the core energy storage lexicon is consistent. Among the most ubiquitous and important terms are the following:
Rated power and usable energy
Power is instantaneous. A 4 kW battery/inverter ESS package, for example, is capable of providing 4 kW of power at that very moment. Energy is a measure of power over time. If that same ESS is capable of delivering 4 kW of power for three straight hours when fully charged, its usable energy capacity is 12 kWh (4 kilowatts X 3 hours = 12 kilowatt-hours).
Power and energy are analogous to a bucket of water with a spigot at the bottom: Power describes the size of the spigot, while energy describes the amount of water the bucket can hold. We need to know both measurements to have an idea of how much water we can get out of the bucket, and for how long.
Depth of discharge (DOD)
Rated energy capacity, as discussed above, is not wholly reflective of the actual capacity that should be extracted from the ESS. DOD accounts for this, and describes the percentage of available energy that system designers should aim to use in a given charge-discharge cycle.
In a perfect world, an ESS could be completely discharged from 100% to 0% (without sacrificing the battery’s longevity), representing a 100% depth of discharge. In reality, this is not the case. Each system will have a specific ideal maximum DOD. For some chemistries, like lead-acid, recommended maximum DOD is at or below 80%. For others, like lithium-ion, DOD can be much higher—on the order of 95%.
State of charge (SOC)
Expressed as a percentage, the SOC represents the current level of charge and ranges from fully charged to fully depleted. Tracking SOC is critical in determining when and how quickly to discharge an ESS.
Round-trip efficiency describes the fraction of energy required to charge the battery (in kWh) compared to the amount of energy that can be retrieved from it (also in kWh). Higher efficiencies reduce the energy lost during the charge and discharge processes.
Thanks to the laws of physics, energy in does not perfectly match energy out in real-world conditions. Current leaks and heat loss, among other factors, contribute to the inefficiency of an ESS. Luckily, most modern systems have fairly high round-trip efficiencies—on the order of 80%, per EIA. Lithium-ion batteries are particularly efficient (about 95% on average) while lead-acid batteries tend to fall in the 75-80% range.
Underneath their shiny metallic exterior, rechargeable batteries are nothing more than controlled electrochemical reactions that take place repeatedly and in both directions. During discharge, ions move through the electrolyte and electrons from the anode to the cathode. While charging, external voltage is applied to the system to reverse the process and shift ions and electrons back to their original places. Thus completes one cycle.
The cycle life is the number of charge-discharge cycles the ESS is able to support before its capacity falls under 80% of its original capacity. Cycle life varies quite a bit based on the ESS chemistry and manufacturer. Some lithium-ion batteries have lifespans exceeding 15,000 cycles, while lead-acid batteries may be rated for just a few hundred cycles.
Pairing a solar PV array with onsite energy storage has become commonplace for residential and utility-scale systems, and new technologies are making medium-level storage financially palatable for commercial applications as well. What are the most common use cases for storage at each project scale? Let’s take a look.
Since its early days, energy storage has been sold as a means for residential buildings to operate off-grid or keep the lights on when the power goes out. As natural disasters grow stronger and more frequent, the need for energy resiliency has never been more apparent. What’s more, utilities around the country are self-inducing power shut-offs to minimize fire risks. To avoid the dangers and inconveniences of increasingly common outages, residential consumers are turning to at-home energy storage options.
While solar PV has an impactful ROI for homeowners through reduced monthly electricity bills, residential energy storage has a limited financial payback. Motivation for installing ESS is driven predominantly by resiliency, with the exception of the state of California and a few smaller regions around the country whose electricity providers offer time-of-use rate schedules that pay homeowners a premium for electricity discharged to the grid during times of high demand.
Commercial and industrial (C&I) applications
Commercial-level energy storage is poised for growth. While residential and utility-scale systems have taken off, the diversity of commercial building sizes, layouts and electrical loads presents a major challenge. To this point, commercial ESS applications tend to fall within two main buckets: energy resiliency and demand-charge reduction.
Much like residential systems, commercial building owners want to keep cold storage units, computer servers and other critical infrastructure running even when the grid goes down. The building owner must determine exactly which loads need to be backed up and for how long. When sized properly, an ESS can keep a business functioning for hours, days or even weeks without relying on the grid.
While backup power is popular and pragmatic, demand-charge reduction is perhaps the most common commercial ESS application. Commercial utility rates are priced largely on a per-kWh basis but step up with demand. Demand charges are a portion of the overall electricity bill that are based on a customer’s peak level of demand occurring over a defined time period (usually around 15 minutes). An ESS, in concert with smart energy management, can be discharged at times of high onsite power usage to reduce average demand to levels below the utility’s highest price tier. This is especially valuable for industrial use, where large, power-intensive equipment is more common.
Use cases for energy storage at the utility scale are much different than for smaller residential and commercial systems. From a grid operator perspective, the central value of energy storage lies in smoothing out electricity supply and demand to ease the strain on generation sources and transmission lines. As we have mentioned in previous blog posts, the duck curve is a serious problem for electrical utilities. Demand spikes in the early morning and later in the evening force utilities to quickly (and expensively) ramp up generation.
To flatten the duck curve, energy storage may be used to control both electricity supply and demand on the grid. For example, imagine a utility-scale solar PV farm operating outside a major metro area. Without onsite storage, the PV generation may be curtailed during times of low demand, which, coincidentally, tend to take place during peak sun hours. But with integrated ESS, no power is wasted when loads are low but generation is high—any excess electricity is stored locally to be discharged to meet demand later in the day.
Alternatively, utilities may leverage distributed residential ESS through a virtual power plant system. Here, the utility takes control of some number of energy storage units in its jurisdiction with customer approval. Then, instead of spinning up generators to meet peak demand, the utility can draw on its network of stored energy throughout the grid. As more homeowners install solar PV and battery-backup systems, virtual power plants will be an increasingly viable method of demand control for electrical utilities.
Energy storage is here to stay. As solar-plus-storage installations spread nationwide and around the world, it’s imperative that our industry stays up to date with technology trends, code updates and safety standards. For additional information on energy storage, we encourage you to check out our other articles and courses linked below.