Energy Storage: Reminding Utility Companies the Future may not need them

Unless you live under a rock, the end of April brought a big announcement in the world of cleantech / renewable energy, which was the introduction of the much anticipated Tesla "energy storage" products, most notably the Powerwall aimed at residential users.  The announcement was picked up by the industry press and general press alike, speaking more to the marketing prowess of Tesla than to the actual revolutionary nature of the product.

Of most interest to the pundits was the price, which falls within the range of $250 - $350/kWhr, a pleasant surprise to most who follow the trajectory in lithium ion pricing.  The market leader in stationary energy storage is still lead-acid products, which have long been the workhorse of off-grid applications due to their low price (~$80/kWh) and simple maintenance, although they suffer great weaknesses in weight, depth-of-discharge (DoD) and total number of life cycles.

As with any flashy new product launch, you will eventually ask yourself, "Gee, should I get one of these things?!"  In fact, I had a local SoCal resident reach out to me to ask that very question, about how to best work storage into his home, which already has grid tied solar panels installed.  I asked him if he was getting credit for energy generated but not used from his utility, widely known as Net Metering, and he said yes.  "Well sir," I said, "The good news is you wont need to purchase a fancy Tesla battery, because the grid is already acting as your battery, and its doing a much better job than a in-home battery could ever do."

When your grid-tied solar system generates more energy than it can use in your home micro-grid, then that extra energy goes back into the local grid (meter running backwards), where it is used by your neighbor down the street.  When you have a Net Metering agreement with your utility, that means you are getting credit for that extra energy, which you can then trade for energy back from the grid when the sun is down.  Basically, the grid is acting as your battery, effectively storing you over generation for future use.

But what if you had a naughty utility which decided it wasn't going to give you any credit for your extra energy?  Well, then you would be throwing your extra energy away.  This is the time you may want to buy a battery, store your extra energy and use it when the sun goes down so its not going to waste because of an uncooperative utility company.

But in the case of home batteries, the utility company who does not net meter is taking a huge risk, because a once customer of the utility is now completely self sufficient with their solar + storage set up and no longer has a need for the utility (or a far reduced one).  They've lost a customer, which is a big big deal.

So what is the most likely long term outcome from all this change in a consumers "energy options"?  Option one, the utilities screw up net metering, forcing millions of customer to defect from the grid, which ultimately destroys their entire business.  Option two, the utilities manage to keep net metering and install their own suite of storage + generation to effectively continue the "grid as a battery" model, thereby evolving their business and surviving.  Option three, the utility owns the Tesla-like battery in your house, and you continue to "pay per kWh" much like a lease on a car, thereby evolving their business and surviving.

While the vision of solar panels + battery storage + all electric loads sounds like modern household utopia, it will be interesting to see how this actually plays out.  For now it is likely more of a deterrent against entrenched business practices than anything else.  Utilities can no longer sit around and tell the solar people, "You'll be back!  You need us when the sun goes down!" because solar people will soon have the ability to store sunshine.  The next move is yours Mr. Utility.  Choose wisely!