For the past 15+ years companies have been installing PV solar systems to reduce their energy costs, measured in kilowatt hours (kwh). But solar systems only reduces a company’s energy costs — and many companies also get billed for peak power demand charges. These demand charges are measured in peak kilowatts (kw) per month, and can be as high as $15-$20 per kw peak per month. So if a company has a 200 kw peak demand and is on an electric rate with a $20 per kw demand charge, they would be paying $4,000 per month for their peak demand — in addition to their normal per kwh energy charges. In some cases these peak demand charges are 50% or more of a company’s total electric bill.
Although a solar system does not significantly reduce these demand charges, a battery storage system does. These battery storage systems are designed to automatically discharge energy in the battery to reduce a company’s peak demand charge. In the example above, when the battery storage control system senses demand over 100kw — perhaps from machinery being started or the HVAC system turning on in the morning — the battery power is used to meet the next 100 kw of demand. The battery can then be recharged from solar, or even the grid.
Not only does this combined solar and storage system reduce both kwh and kw costs, it can also provide emergency backup power if there is a blackout. These backup power capabilities are especially important for companies that are dependent on a consistent manufacturing process, or just about any company that requires power for credit card processing (retailers), communications (service providers) or refrigeration (convenience stores).
To provide some real world background about currently available solar and storage systems, my guest on this week’s Energy Show is Neil Maguire, CEO of Adara Power. Adara is a Silicon Valley company that integrates battery and inverter technology with software to reduce peak demand charges, maximizes the value of net metering and provides backup power. There is no doubt in my mind that future commercial energy systems will be based on a combination of solar power and local battery storage.