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Objectively Modeling the Economics of Energy Storage Projects

Source: Energy Toolbase

Determining how much money a customer-sited Energy Storage System (ESS) saves can be tricky. The savings that ESS can achieve depends on many different inputs and assumptions of the project.

 

This is true regardless of where the project is located. Each customer’s savings will be specific to their unique load profile, their utility rate schedule and Net Energy Metering (NEM) rules, the ESS hardware, ESS controls software, and numerous other project assumptions. Here’s a quick summary of the main variables that will dictate how much a behind-the-meter (BTM) storage project can save:

 

  • Customer load profile: how much power does the customer use at different times throughout the day, week, month and year?
  • Utility rate & NEM: what utility rate tariff is the customer on? Is it a Time-of-use (TOU) schedule? Are there demand charges? Are there any NEM 2.0 or Feed-in-tariff assumptions to account for?
  • DER combinations: is it a standalone ESS project, is ESS being paired with solar PV, or retrofitting ESS onto a meter that already has PV?
  • ESS hardware: what is the vendor make and model of the ESS, which determines the electrical characteristics of the battery and inverter (e.g. kW power rating, kWh energy capacity, charge & discharge efficiency, etc.)
  • ESS controls software: what value streams is the software controlling the battery targeting (e.g. peak-demand shaving, time-of-use arbitrage, self-consumption, etc.). Also, are there any controls restrictions (requiring the ESS to charge from PV, or requiring that the ESS does not export to the grid, etc.)


Objective, Third-party Analysis

One of the end goals of modeling an ESS project is to determine an accurate and realistic savings estimate, which will obviously dictate the project’s economics. We recently redesigned our energy storage module at Energy Toolbase with this end goal in mind. We felt it was critically important to enable developers to objectively and transparently analyze their projects, based on any type of ESS hardware or software controls combination. To accomplish this, users must have complete control to define all the project specific variables (listed above). This gives developers confidence that the ‘avoided cost’ analysis they run and present to their customer is unbiased. This empowers distributed energy developers to identify the best storage projects, efficiently focus their development resources and close deals.

 

The Storage Market is Ramping Up

The energy storage market is expected to grow rapidly in the coming years. In the most recent U.S. Energy Storage Monitor report, GTM Research and the Energy Storage Association predicted that that U.S. energy storage annual deployments will reach 2.5 GW by 2022, up from 295 MW’s in 2017, an 8-fold increase. This growth is creating strong demand for trustworthy software tools capable of analyzing and selling storage projects. At Energy Toolbase we can attest that there is strong interest from within the solar developer community to model and sell storage projects. With all the hype and buzz surrounding the energy storage market, many developers are feeling pressure to get educated on storage and understand the value proposition on behalf of their customers who are asking about it.

Energy Toolbase is an industry leading software platform for modeling and proposing the economics of solar and energy storage projects. Over 1,000 distributed energy organizations nationwide use our software-as-a-service platform to objectively and transparently analyze their projects. Clients include residential and commercial installers, project developers, EPCs, ESCO’s, financiers, policy organizations, and utility companies.

 

Tracy Fosterling,
Content Marketing Specialist,
Energy Toolbase


The ees International Magazine is specialized on the future-oriented market of electrical energy storage systems, not only from a technological-, but also a financial and application-oriented point-of-view. In cooperation with ees Global, the ees International Magazine informs the energy industry about current progress and the latest market innovations.

Contact: Xenia Zoller - zoller(at)ees-magazine.com