The buzz and anticipation surrounding commercial solar battery storage continue to escalate with each passing month. As battery prices drop and their performance improves, more companies are exploring how battery storage can significantly reduce their monthly energy bills, especially when paired with a commercial solar panel system.
THE TECHNOLOGY BEHIND SOLAR STORAGE
Let’s begin by discussing the batteries commonly used in commercial solar energy storage. Apart from their size and the software utilized to manage them, the batteries employed to deliver solar power to your business are quite similar to those found in cell phones, cordless drills, or electric cars.
Like their smaller counterparts, most battery storage systems in commercial settings utilize lithium-ion chemistry and are roughly the size of a refrigerator (or even several refrigerators, depending on the power requirements). These battery storage systems are charged up—using energy generated by solar panels—and store power to be discharged whenever needed.
FINANCIAL ADVANTAGES OF BATTERY STORAGE
As you may be aware, commercial utility customers are billed based on the power they consume (measured in kilowatt-hours, or kWh) and demand charges (measured in kilowatts, or kW), determined by their highest usage within a billing cycle. This means businesses are billed for spikes in usage beyond their standard kilowatt-hour consumption, potentially leading to significant additional costs every month. In some states, demand charges constitute more than half of a commercial customer’s monthly utility bill.
While solar energy can certainly help offset these demand charges (as well as standard power consumption), batteries are particularly effective in reducing (or “shaving,” as it’s colloquially known) these peak periods by supplying stored power on demand.
Now, let’s explore how solar batteries function.
HOW DO SOLAR BATTERIES OPERATE?
Consider a typical commercial customer’s load profile, where power consumption peaks during the day. In this scenario, the customer doesn’t utilize solar or battery storage to mitigate energy costs, resulting in predictable fluctuations in demand throughout the day.
Sound familiar? If you’re a typical business, it probably does. Now, let’s dive into what happens when we integrate solar power into the equation. With energy from the sun in the mix, we can substantially slash the number of kilowatt-hours required during specific times of the day. Here’s a glimpse of how that load profile might transform:
In the graphic above, you can observe the orange area, representing the peak energy produced by solar panels, typically occurring between 7 am and 5 pm daily (when the sun is shining). This significantly reduces the kilowatts required during this period. However, what happens during the times outside this window, when the business still requires substantial power but lacks sufficient sunlight to offset the demand with solar energy? Can these remaining peaks in demand be further smoothed out to help save business costs? Absolutely—and that’s where solar battery storage comes into play.
Let’s examine the graphic above. The lighter blue area illustrates how batteries can be charged earlier in the day, while the darker blue area indicates when they can be discharged later in the day to mitigate or flatten peaks in demand. In regions where demand charges are substantial, even a 100- to 200-watt reduction in peak demand can yield significant savings for an organization, making commercial solar battery storage an excellent cost-saving solution.
IS SOLAR ENERGY STORAGE RIGHT FOR YOUR ORGANIZATION?
We’ve explored how battery storage complements solar energy and offers compelling benefits for businesses seeking to reduce high monthly demand charges. Before concluding, let’s delve into the practicalities of commercial battery storage and how to determine if it’s a viable solution for your business.
While some may assume that purchasing an onsite solar energy storage system is the only option, an increasing number of solar power customers opt to lease battery storage directly from their provider. This approach eliminates upfront costs and mitigates ongoing operational and maintenance expenses.
Whether through purchase or lease, commercial solar customers leveraging battery storage can achieve payback in as little as three to five years, aided by state rebates (such as California’s Self-Generation Incentive Program), federal tax credits, and utility savings resulting from reduced demand charges. Even if you don’t opt for an outright purchase, you can still benefit from these incentives as pass-alongs from your provider.
So, how do you determine if a combined solar power and battery storage solution is suitable for your business? It boils down to understanding your energy usage patterns throughout the day, month, and year. Most solar providers offer in-depth analyses of your load profile, outlining how solar panels and a battery storage system can offset overall power consumption and demand spikes. Additionally, they can provide insights into available rebates, credits, and incentives in your area.
Thanks to recent advancements in commercial solar battery storage, the potential for substantial savings in demand charges annually is tangible. As you evaluate commercial solar power providers and solutions, inquire about integrating solar energy storage into your system to ascertain if it aligns with your business objectives.
