Commercial and industrial businesses bear 98% of the tens of billions of dollars in costs associated with power outages in the United States each year. Despite these costs in lost production more than 80 percent of C & I energy storage installations today are NOT used for backup power.

With the cost of adding backup power being nominal when selecting the right inverter, and a pipeline of 1.3 GW of commercial and industrial energy storage installations forecast by 2021, Dynapower examines considerations for developers and end users when selecting an energy storage inverter to provide valuable backup power for their installation and maximum value for their energy storage installation.

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According to the latest edition of GTM Research and ESA’s U.S. Energy Storage Monitor, corporate investment in energy storage reached an all-time high in terms of quarterly investments in Q3. Disclosed venture funding and project finance totaled $660 million in the third quarter of the year, bringing the annual total to $812 million.

The largest announced deal during the quarter was $300 million in project financing from the Electric Gas & Industries Association for Tabuchi Electric. The report notes that Advanced Microgrid Solutions also closed a large project financing deal worth $200 million with Macquarie.

“Financing activities in this most recent quarter are noteworthy not just because of the scale, but also because project financing made up a significant portion of the total,” said Ravi Manghani, GTM Research’s director of energy storage. “While one quarter alone doesn’t constitute a trend, growth in project financing, especially in the residential segment, is a harbinger for further strengthening of deployment business models.”

Compared to corporate investment, deployments for the quarter were relatively quiet, however, as no front-of-meter projects above 1 megawatt were brought on-line. Across all segments, the U.S. saw 16.4 megawatts of energy storage deployed in the third quarter of 2016.

The behind-the-meter segment, which is made up of residential and commercial deployments, accounted for the majority of the quarter’s storage deployments. The U.S. deployed 14.1 megawatts of behind-the-meter storage in the third quarter of the year, which is essentially flat year-over-year.

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The Federal Energy Regulatory Commission just took its strongest step yet to initiate markets for energy storage across the nation.

The commission, which governs interstate power transmission and wholesale markets, proposed a rule Thursday that would require each regional transmission organization and independent system operator to create rules for energy storage to participate in wholesale markets. The new regulations would have to recognize “the physical and operational characteristics of electric storage resources,” which differ from traditional grid infrastructure in that they can act as both a load and a generator, and perform a multitude of functions if given the chance.

If approved, the proposed rule could greatly expand the role of energy storage in wholesale markets — and the size of the industry itself. So far, storage has been relegated to the few areas that passed enabling policies.

The PJM grid operator created a frequency regulation market and became the largest U.S. market for energy storage. It has seen 250.5 megawatts of cumulative deployments since 2013, according to GTM Research. The California ISO established a “non-generator” resource type that allowed storage to compete in the markets, and California became the second most prolific U.S. market for energy storage, with 73.2 megawatts deployed.

ISOs and RTOs serve about 70 percent of the country, so if FERC requires all ISOs and RTOs to adopt similar policies, the geographically cloistered storage industry could quickly go nationwide.

“This isn’t just clarifying existing rules; it’s redefining the rules to acknowledge the fact that energy storage cannot adequately participate right now and changing the rules to accommodate it,” said Daniel Finn-Foley, senior analyst for energy storage at GTM Research. “It’s a really big deal.”

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Donald Trump’s campaign rhetoric showed no mercy for climate change policy, but there’s reason to believe energy storage will continue to flourish under his presidency.

It’s not clear that Trump himself thinks much about energy storage. There are few, if any, instances of him mentioning it specifically in public. The 2016 GOP party platform, though, promised that a Republican administration would “find new ways to store electricity, a breakthrough of extraordinary import.” That reference came in the context of grid modernization and resilience efforts.

It’s worth noting that, even under President Barack Obama’s diligent efforts to expand clean energy and reduce greenhouse gas emissions, federal energy storage policy is still virtually nonexistent. A bill to give storage an income tax credit like the one solar energy enjoys has been introduced in both houses of Congress, but hasn’t moved very far. When the White House hosted a storage summit this summer, it showcased a collection of ongoing efforts, but did not break much new ground.

The states that have largely driven the expansion of distributed energy resources through strong policy and regulatory action will continue to do so, and their ranks are growing. 

“There are a lot of opportunities that will now shift from a federal focus to a more distributed focus, no pun intended, with cities and states in particular,” said Sen. Martin Heinrich (D-NM), one of the most vocal proponents of energy storage on Capitol Hill.

Any industry would be remiss, though, to not seek greater representation in the policy agenda of an incoming administration. For energy storage, this likely means a pivot from messaging around decarbonization and renewables integration to a greater emphasis on the role of storage as infrastructure for a safer, more resilient grid. 

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We knew the Mercedes-Benz residential battery would be coming to the shores of America in early 2017. Now we know it will arrive with a whole new company.

Parent company Daimler AG has created Mercedes-Benz Energy Americas, LLC to sell stationary storage of all sizes to the U.S. market. Like Tesla, this is a car company that developed electric vehicles (EVs) and then put its battery expertise to work in a stationary storage product.

The Mercedes home batteries will also go head-to-head with fellow German emigrant Sonnen, a competition made all the more personal because Daimler hired Sonnen’s former U.S. CEO, Boris von Bormann, to lead the effort. After three years of working on Sonnen’s U.S. entrance, he’s learned about the American appetite for storage and how to market to it, and now combines that experience with the resources and reputation of Mercedes-Benz.

Energy Americas will act as the U.S. counterpart to Germany’s Mercedes-Benz Energy GmbH. Both companies develop and sell batteries made by Daimler’s wholly owned subsidiary Deutsche Accumotive. This company has been manufacturing lithium-ion battery systems for Mercedes-Benz electric cars, so the batteries have seen rigorous testing and are built for much more intensive use than most stationary systems ever see.

Mercedes isn’t just dipping its tires into the electric mobility craze. By 2025, the company wants to sell 10 or more EV models, and it’s investing 1 billion euros in scaling its battery production capacity. The company has bigger ideas than just cars, too — it’s envisioning an “electric mobility ecosystem” including automation, ride-sharing and home improvements like battery storage and EV chargers.

The residential market will be an early focus for the fledgling U.S. enterprise. The metallic gray modular system looks like a home appliance, stacks from 2.5 kilowatt-hours up to 20 kilowatt-hours and comes with a 10-year warranty. That goes on sale the first quarter of next year, as will larger commercial packages. Mercedes is looking for channel partners to distribute and install the systems.

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When it comes to the future of the solar power industry, some trends have built up enough momentum to be pretty close to inevitable — including the continuing importance of operational cost reductions, the escalating need for storage, and the ongoing development of microgrids, to name just a few. 

These and other important trends in the solar industry are on the radar of the China-based string inverter manufacturer Huawei. 

The quest to push costs down

Already, it’s possible to see the vital role string inverters are playing in boosting solar’s continuing growth — particularly when it comes to driving down costs so that solar can compete with and ultimately replace fossil fuel generation.

“The future trend of the solar plant will be a higher level of reliability and lower operational costs,” said James (Yuyu) Qiao, vice president of operations and product solutions for Huawei Smart PV Solutions North America.

String inverters help with both.

Lower operating costs are directly related to improved reliability, which Qiao notes is a function of both string inverters’ higher reliability design and the evolution toward a distributed solar plant architecture.

Having a multitude of string inverters instead of a few central inverters means solar plant operators are not as susceptible to failure-related downtime. Indeed, if a string inverter at a solar plant stops working, it has only a small impact on generation because only a very limited number of panels are affected.

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The energy storage startup Swell Energy has launched an all-in-one home energy product it predicts will make residential storage more marketable and profitable.

Residential storage doesn’t make economic sense in most parts of the U.S. Hawaii has a self-consumption program designed to encourage battery adoption, California has a slew of state incentives, and a few utilities elsewhere have implemented residential demand charges and time-of-use rates. But in general, home storage is really just an emotional sell.

Venice-beach based Swell doesn’t make its own batteries. Rather, it packages ones made by partners LG Chem, Sonnen and Tesla. The newly announced EnergyShielddoesn’t bring new technology to the table, but instead innovates in the packaging and financing. The solar-plus-storage offering will play a pivotal role in Swell’s contract with Southern California Edison to deploy 20 megawatt-hours of storage across 3,000 homes for grid services.

The EnergyShield combines rooftop solar and lithium-ion batteries from its partners, plus an energy management system. There are certainly other companies offering solar products paired with storage products, but Swell says its system was built from the ground up with a focus on optimizing the battery.

Only a fraction of solar customers buy storage as well. Thus, storage often gets sold as a kind of add-on to a rooftop solar installation, rather than a piece of the whole system.

“Right now, storage is being sold electively,” said Suleman Khan, a managing partner at Swell. “Ours is a battery-centric product. We are selling a battery with enough PV to charge the battery and optimize your savings.”

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PV is now producing more electricity than coal in the U.K. But don’t expect a storage boom to follow.

According to GTM Research’s Global Solar Demand Monitor, the U.K. is the fifth largest market for solar demand globally — although installations are set to drop 65 percent next year due to policy uncertainty.

In addition, concerns over the eligibility for subsidies are forcing asset owners to delay adding storage to PV projects, said Jill Cainey, director of the Electricity Storage Network. 

The U.K. PV industry is largely supported through a Renewables Obligation Certificates (ROC) scheme that was designed before the advent of solar-plus-storage plant designs. 

PV asset owners wishing to add storage to their plants would have to reapply for ROC accreditation with their distribution network operator. Payments under the ROC scheme would then be suspended pending the outcome of the accreditation process. 

Even though any interim payments would still be awarded once the accreditation was granted, the temporary halt in cash flow “is something an investor would not be excited about,” Cainey said. 

This month, she attended a U.K. renewable energy trade show, Clean Energy Live, and “there were no solar farms deploying storage.” 

At the same time, the U.K. market for residential solar-plus-storage looks unlikely to take off in the near future because of unfavorable economics. 

Recent research by Delta Energy & Environment suggests the payback time for U.K. residential PV-plus-storage could be 16.9 years for a new system and 24.5 years for a retrofit, not taking subsidies into account.   

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A boom in desalination could create new opportunities for energy storage as developers seek to maximize output from assets powered by wind or solar.

“As soon as solar-plus-storage can compete with [traditional] generation prices, there will be a huge market,” said Thomas Hillig, managing director of Dr. Thomas Hillig Energy Consulting, a consultancy focused on off-grid energy markets.

“It’s pretty important to have high utilization, because the desalination equipment is very capital-intensive. After having done the investment, they want to run it as intensely as possible. If we go off-grid, there has to be storage because utilization has to be high.”

Currently the market for energy storage attached to desalination plants is still in its infancy because of the cost of batteries. With most desalination projects, “You pretty much have the choice of where to put them,” Hillig noted.

In such cases, developers will naturally tend to choose locations where energy is cheap and plentiful. Thus, for the vast majority of desalination plants today, solar-plus-storage is still “not feasible. It’s a nice concept; a market of the future,” he said. 

But the picture is changing as demand for desalination grows and solar-plus-storage becomes more competitive. Currently, desalination serves around 1 percent of the global population, or almost 746 million people.

But desalination capacity increased 57 percent between 2008 and 2013, according the market research organization Global Water Intelligence (GWI) and the International Desalination Association.

GWI said desalination could be needed for up to 14 percent of the world population by 2025, based on United Nations figures for water scarcity. Renewable energy is already being considered as the power source of choice for many new desalination projects.

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Eos Energy Storage, the startup that’s attracted utility interest from around the world in its low-cost, zinc-based batteries, is raising money to build more of them, and to get those units out in the field. Deployments are needed to prove the company’s bold claims of multi-hour, long-lasting energy storage at a cost of $160 per kilowatt-hour.

On Tuesday, Eos announced the initial closing of a sale in a private placement of approximately $23 million. The New York-based startup previously raised $23 million in May 2015 in a round led by AltEnergy, and about $27 million in two previous funding rounds from investors including OCI, NRG Energy and Fisher Brothers.

The money will fund the scale-up of contract manufacturing and commercial deployment of its Eos Aurora batteries. These cargo-container-sized, 1-megawatt, 4-megawatt-hour units use cathodes made from zinc, a much cheaper metal than lithium, but one that’s proven to be a challenge for rechargeable batteries.

Eos says it’s solved these problems through a proprietary coating that reduces corrosion over multiple charge-discharge cycles, as well as other materials and design improvements, to yield a battery with 75 percent round-trip efficiency and a 10,000-cycle, or 30-year, lifetime.

As for price, the company has long been targeting $160 per kilowatt-hour, which is about half the cost of the cheapest lithium-ion batteries on the market — although lithium-ion’s massive manufacturing base is sure to drive down those prices in the years to come.

Eos’ batteries sacrifice round-trip efficiency in comparison to lithium-ion, which is in the 90 percent range. But they have a better profile for multi-hour discharge cycles, particularly in the 4- to 6-hour range, where lithium-ion batteries really struggle.

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