The California Public Utilities Commission (CPUC) has created a robust regulatory environment for the development of battery storage. In 2017 we saw deployment of 45 MW in non-residential Behind-the-Meter (BTM) storage. Residential projects were on a similar scale, with 43 MW in Front-of-the-Meter (FTM) projects, and 6 MW in BTM applications in 2017. To augment the State’s leading status in renewable energy deployment, it has just passed another ruling that requires all new constructions to come installed with solar, as well as a landmark 100% clean energy goal.
Traditionally, energy storage has been viewed as a mechanism to circumvent the challenge of variability in renewable energy production. Now, storage is increasingly being viewed as a standalone asset, capable of benefiting from diverse revenue streams. These revenue streams, and the economics of energy storage for different end-users, are dependent on the interplay between tariff structures, incentive programs, renewable energy production and the overall costs of deploying storage systems. This article explores these variables in detail and outlines the trends and expectations of BTM storage economics, with particular focus on PG&E territory. It begins with discussion of the value proposition storage brings to the grid and goes on to examine the factors that govern success of battery storage projects. Qualitative and quantitative analyses are presented to highlight the various drivers of success in California’s battery storage market.
Please click on the link above to download the paper, and get in touch with Aksheya Chandar if you would like to discuss any of the issues raised.