SolarCity Launches Energy Storage Paired with Solar for Business Using Tesla Battery Packs
SolarCity is getting into the commercial energy storage business by installing and financing behind-the-meter solar-battery systems and smart software in California, Massachusetts, and Connecticut.
- SolarCity expects to build and finance 30 to 50 commercial solar-battery systems next year
- The storage system, always in tandem with solar, will be offered in regions of California serviced by PG&E and SCE, areas of Massachusetts serviced by NSTAR, and areas of Connecticut serviced by Connecticut Light & Power
- The commercial systems are provided with no up-front cost through a 10-year service agreement, along with lower energy costs from day one
- The systems—which require no behavioral or operational change by the business—address demand charge management, reduce peak demand, and provide emergency back-up power during power outages
- The company states the system automates the discharge of stored energy to optimize utility charge savings for customers
The pairing of solar and batteries could have significant implications for the solar industry and electric utilities. The combination can remove the intermittent nature of solar and provide power over a greater number of peak hours.
Costs remain a key issue for the widespread adoption of energy storage. SolarCity’s storage offering is limited to markets with high electricity prices and demand charges. However, if storage follows the path of solar, rapid cost declines could result in additional viable markets.
As a result, SolarCity’s move could encourage growth of microgrids and increase third-party competition in markets with favorable economics and high demand charges. In addition, the move is likely to increase concern and discussion around rate design in these select markets.
SolarCity is best known as a third-party owner of solar PV systems. Their value proposition is a long-term contract at or below retail electricity prices with no up-front costs. Entering energy storage is natural extension of the company’s broader ambition which is to provide a diversified portfolio of energy solutions. They have already piloted residential battery storage in California.
Tangentially, SolarCity has a strong connection to Tesla Motors. Tesla CEO, Elon Musk, is a SolarCity investor and chairman of the board. Musk is also the cousin of SolarCity’s founders—Peter and Lyndon Rive.
This report is part of the Clean Tech & Sustainability Minute series. To view all featured Minutes, please click here.
Welcome to ScottMadden!
Sussex Economic Advisors is now part of ScottMadden. We invite you to learn more about our expanded firm. Please use the Contact Us form to request additional information.