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.
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.
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