Energy storage and the great commercial frontier: a solar star is born

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

The solar industry is showing great potential but not much delivery in two main areas at the moment: energy storage and deployment in the commercial sector.

Over the past couple of quarters, commercial sector deployments have decreased, dropping 11% year on year. There's no reason to think that these past two quarters will not show the same downward trend, but we'll have to wait for the data.

But most market watchers in the US believe that a star is about to rise for both commercial deployments and energy storage. The commercial solar energy market is forecast to rise to 2.3GW by 2017, an increase from 3.2MW in 2012, according to IHS. America is also expected to lead the world in commercial PV storage, accounting for more than 40% of global installations in 2017.        

That's quite an ambitious target given the lukewarm start so far. But in fact, solar companies and large corporations are staking money on it and putting their brand on the line.

Jim Doyle, president of Panasonic Eco Solutions, is leading the Japanese mega-company's drive to target the underserved commercial, industrial, municipal and small utility (CIMSU) and energy storage markets.

“We have positioned ourselves in the US commercial industrial and small utility markets – we are not in the residential sector; wide deployment is not our speciality,” Doyle recently told PV Tech in exclusive comments. “We've installed 30MW so far – two years ago we weren't even playing.

“We're not in the huge utility-scale cover-the-desert-with-solar part of the market, but we're in between. But we want to play in there as we think there is inefficiency in the market. With tax equity requirements, the transaction costs, for example, of doing a 2MW commercial deal may not pencil out today because of the legal fees and the tax equity structure. By the time you get done paying the lawyers you're under water.”

Last month, Panasonic Eco Solutions announced its financing platform would include US$50 million in sponsorship equity from Ullico, an insurance company. The first project to be completed under the expanded platform is a 16.2MW portfolio of CREST (California Renewable Energy Small Tariff) projects it acquired with finance partner Coronal Management from Macquarie Capital. That portfolio consists of nine projects located in Tulare and Kings Counties in Central California and will be completed by the middle of 2014 with interconnection to Southern California Edison.

“Now that we have a multi-million capital stack to deploy, we're just putting the flag up now that says ‘hundreds of millions of dollars to deploy – bring us your projects’,” he said.

Total assets jointly developed by the Coronal-Panasonic relationship are now over 30MW. But Doyle said that customers are brought even more comfort by the Panasonic brand and a 20-year production guarantee that few but the largest companies can offer.

“We're the tip of the spear,” he said. “It's so complex, you need such a big balance sheet, such a brand that people can trust. The fact that it's difficult is great because if I'm successful I don't have to worry about tomorrow another small company all of a sudden nipping at my heels. In fact, I'm not even trying to push the little guys out. I'm bringing the little guys into my ecosystem, I'm saying to small EPCs in Cupertino or Denver, bring the deal to me, I'll form the master EPC, finance and wrap it, and you can build it.

“Our customers know that I'm going to do a 20-year production guarantee by an US$85 billion company not by Joe's Electric – in year 18 are they going to be here? We've been around since 1918. I think we're going to be around a while longer.”

At Solar Power International last month, Panasonic had one of the largest stands in the exhibition hall; partly a statement of ambitious intent in the US and also to show off its new HIT double bifacial solar panel, a descendant of course from the Sanyo product after Panasonic acquired the panel maker in 2010. Panasonic claims the new panel potentially enables up to 30% higher power generation (kWh).

But Panasonic has an additional asset in its technology portfolio as it is also a leading battery supplier and makes lithium ion batteries for Toyota's Prius and Tesla's Model S, for example. Energy storage for solar systems, particularly in the commercial sector is a perfect synergy.

“We're already doing pilots now,” said Doyle. “We're already doing it at the residential level in Japan but we're looking at all the tiers of storage. You don't see us out there now because we're a conservative company and we're not going to be the first one in the market but we're going to be the second or third. We're not ready to be a flash in the pan – launch something, try it and have some issues that damage our reputation.”

In the past couple of months, the California Public Utilities Commission has mandated the state's investor-owned utilities to procure 1.325GW of energy storage.

“That's a great signal to the market,” said Doyle. “It's getting that technology to the level of reliability that we're comfortable with because we're sometimes our own worst enemy, we're an engineering company at heart so things don't get released until everything is done. But when we get ready that goal seeds the market.”

REC Solar, meanwhile, is another company preparing to play in this sweet spot on the Venn diagram between commercial solar and energy.

Ben Peters, director of solar finance and policy at REC Solar, told PV Tech that the CPUC's 1.35GW mandate “certainly helps our larger partners recognise the business need for this”.

But he also recognises the challenges of moving from demonstration to deployment stages and how a solar company integrates a new technology with a limited track record and different financing model.

“In this race there are the big gorillas,” he said. “And while there's no question about the warranties to back them up, can they move quickly enough and get the internal resources deployed quickly enough or is that down to the small nimble guys? The CPUC decision gives those bigger players and partners confidence that yes, this is market we need to invest in and move forward on which is a great signal.

“The programme is saying the time to wait is over, you want to bid into these rounds. Our company is putting our solar brand on the line.”

REC Solar decided to target the commercial solar segment with the additional option of energy storage about a year ago after “six months of spreadsheets”, said Peters. The company now has five to 10 customers in three states – the closest it has come to deployment is in Southern California Edison's territory.

“Our residential business is doing fantastic, it's doing great. We don't necessarily need to have that storage conversation yet,” Peters said.

Some energy storage companies are trying to sell their system – or at least the IT “brain” that controls the system with solar – with the promise that commercial customers will save money from demand charges.

“A church for example, might have a spike in load one Sunday a month when it turns on all the lights,” said Peters. “Their entire demand is based on that spike because it's based on the 15-minute interval. Without a battery, that church has the same demand charge payment as a manufacturing company who has that demand for the entire month. Utilities always like to talk about fairness. Is that a fair billing structure?

“We're saying we're going to reduce those spikes and get those load curves much more flat. We see utilities as partners in that they need to help us interconnect and do these things. We're not going to net meter and push kilowatt hours back onto the grid; we're going to keep the customer from spiking the grid.”

Peters also believes that solar systems with storage will make PV easier to finance for commercial projects now that ironically, panel cost reductions have dampened the attractiveness for financers.

“What used to be 300kW of solar at $3/watt is now 300kW at $2/W. There is no small market solar financing that's available. You generally need a million dollars just to start the conversation about finance.

“The deployment for the commercial and industrial sector in energy storage is quite modest to say the least. But over the next couple of years co-located solar plus storage projects behind the meter is going to be one of the largest growth sectors. That's not going to happen any time within the next six months, but that will be where the fastest growth is. That's not necessarily to say that it's where the highest volumes are but it's certainly where the most innovation is going to take place.”

19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?
26 August 2021
In this webinar, JA Solar will present its product portfolio based on the latest technologies to improve your PV projects, ensuring maximum reliability and performance. During the webinar we will receive insight from JA Solar about its solar technology roadmap and how the manufacturer is providing customers with innovative solutions to suit their needs, while we will also analyse how to determine the best product solution for each solar project.
6 September 2021
The 38th European Photovoltaic Solar Energy Conference and Exhibition will be held online from 6 - 10 September 2021, allowing PV experts from all around the globe to participate with just one click! The EU PVSEC is the world's leading forum for PV Research and Development and the biggest Conference on PV Solar Energy worldwide. That is why PV experts from all around the globe are keen on gathering together each year to be part of this specialist’s event, to present and discuss the latest developments in Photovoltaics, to network and to conduct business.

Read Next

PV Tech Premium
July 28, 2021
Amidst a need to scale up solar this decade, PV Tech Premium speaks to Vassilis Papaeconomou, managing director at renewables service provider Alectris, to learn how the solar industry can scale up efficiently, what asset owners and operators need to be aware of when buzzwords such as ‘digitalisation’ and ‘artificial intelligence’ are mentioned, and what the industry might learn from more mature technologies such as wind.
July 28, 2021
The New Jersey Board of Public Utilities (NJBPU) has unveiled formal plans to replace its existing solar support framework with a new incentive programme which will support up to 3.75GW of new solar over the next five years.
July 28, 2021
Generating electricity from renewable sources in Europe is now half the price of fossil fuels as polluting power production on the continent fails to recover from the pandemic and renewables grow, according to a new report by the Ember energy thinktank.
July 28, 2021
Solar and storage provider Sunnova, SolarEdge Technologies and National Grid have partnered on a grid stability project in New England, US
July 28, 2021
Two US Senators have introduced a bipartisan energy tax proposal to encourage innovation in the clean energy sector and rapidly scale up new technologies.
July 28, 2021
Chinese inverter manufacturer Sungrow has opened another research and development (R&D) centre in Nanjing, China that will focus on smart technologies, big data and software integration

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021
Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021