Energy Storage 301: Solar + Storage Economics - Case Study
In this post we examine the economics of solar + storage. Specifically, we calculate the value of solar and storage for two commercial buildings in each of three markets: California, New York, and Hawaii. We find solar and storage are strongly synergistic in all three markets.
The NPVs of solar + storage investments are greater than the sum of the NPVs of solar investments and storage investments alone because, among other reasons:
- The combination allows for much larger demand charge reductions than either technology can achieve on its own
- Pairing storage with solar allows the owner of the storage system to claim the federal Investment Tax Credit on the storage system, subject to certain constraints on how it is charged
(We looked at the returns to storage alone in an earlier post.)
We are grateful to Geli, a provider of intelligent energy storage software solutions, which provided the building load profiles, solar production estimates, and storage system operating profiles for the analysis. Thanks to this cooperation we were also able to validate the economic calculations in our model versus those in an independently developed model.
Building Load Profiles
Figure 1 shows the daily average load profile and 15-minute load heat map for each of the two buildings we analyzed. The first building is an office building and the second is a factory. In both the load profiles and heat maps, time of day is on the horizontal axis, so we see the normal workday roughly in the middle. “Hotter” colors on the heat maps indicate higher load.
For analytical consistency we assume that each of these two buildings exists in each of the three locations we examined. The office building requires a much higher load during normal working hours than at other times, while the factory’s load is spread more over the entire 24-hour day, but has higher variability.