Why Your Next Renewable System Should be Built Around Energy Storage

Mark Cerasuolo, Senior Marketing Manager
OutBack Power

In the renewable energy industry, there has been much discussion about how to convert variable resources such as wind and solar into consistent and continuous energy similar to the electricity consumers are accustomed to enjoying from the utility. Meanwhile, more frequent instances of extreme weather such as tsunamis, heat waves, hurricanes and ice storms are causing sustained blackouts and giving residents and businesses pause: what if the grid isn’t as reliable as we once assumed? Or consider another possibility: systems designed around installation and production incentives such as net metering (running the meter backwards and selling back to the utility) can have their entire economic rationale altered if those incentives change, and policies invariably do change.

Finally, consider the fact that a grid-tied PV system is always offline at night, but if surplus energy generated during the daytime can be stored, it can be used at night when electricity costs may be at their peak. These independent but related concerns, grid stability, renewable system economic viability and consistency, create opportunity for renewable energy systems that can thrive when paired with an energy storage system to provide electricity during power interruptions and peak use times.

Originally, many solar installations were off-grid entirely, with users getting all their energy from solar panels, perhaps with a diesel generator and battery system for backup power. These consumers stayed completely off the grid, often because they were located in remote areas where it’s too expensive for a utility to build energy infrastructure. This off-grid technology wasn’t feasible for all geographies or appropriate for all needs, which is why grid-tied systems came into the mainstream. Today, most commercial and residential solar system users in the developed world use technology that’s grid-tied where the utility acts as energy storage, supplying power as needed when the installation isn’t producing enough electricity due to a week of cloudy days or other disruptions in maximum solar exposure.

Developments in technology now offer a system choice beyond black and white, either tied to the grid or completely independent of it.  Hybrids called grid-interactive photovoltaic (PV) systems offer more of the best of both worlds: grid-tied economics when the grid’s available or cost-effective, and off-grid independence when it’s not. Grid-interactive systems are based on grid-tied technology, and once they are combined with proven energy storage technology, the comparable payback expectations and greater capabilities will drive higher adoption levels in the industry. While grid-interactive PV systems offer users increased flexibility and reliability in installations, they are not so different from the grid-tied systems integrators most frequently recommend.

Grid-Tied and Grid-Interactive Systems – The Similarities
For an analysis of the differences between grid-tied and grid-interactive systems, one must first examine what both have in common.  Both types of systems deliver several similar benefits.

• Lower Bills: Grid-tied and grid-interactive systems save users money on utility bills in several ways.  First, they simply use less grid-produced electricity.  Second, during times of strong sunlight and relatively light load demand, surplus energy can be sold back to the utility in many states and localities. Net metering means that an owner can run the meter backwards and potentially save a home or small business up to thousands of dollars during the life of the system. Some states have a cap, but between geographical amounts of sunlight, incentives and electricity costs, solar users stand to shave a big chunk off their bills.

Photo courtesy of SolTerra

• Better Resell Value: According to recent statistics, solar energy system owners can see a potential return of 97 percent of their investment when it’s time to put their homes on the market. This is higher than any other home improvements or amenities, and it’s important to keep in mind this is on top of the money owners save by reducing their energy bills and taking advantage of net metering. Additionally, a US Department of Energy study showed that homes equipped with solar energy systems are on the market for half the time, even when you factor in challenging housing markets. If homeowners want the flexibility to move to the next property, grid-tied and grid-interactive systems are both attractive investments.

• Decreased Carbon Footprint: After installing weather sealing or efficient lighting, solar power can be the lowest-hanging fruit toward attaining a greener lifestyle. Unlike wind turbines and micro-hydro installations, solar does not have prerequisites such as regular breezes or a running stream on the owner’s property. Sunlight is accessible to everyone. Solar power also has zero impact on the environment as a solid-state, low-impact energy source with no moving parts compared to the other methods, it requires no transmission paths past the roof and it is used at the point of generation.

• Incentives: Both grid-interactive and grid-tied systems make their owners money by qualifying them for production credits. Depending on the state, incentives pay owners per kilowatt-hour for producing electricity, even when the system owner consumes that electricity. Production credits vary by state and also by local utility, but they are a large contributor to the eventual payback for a renewable energy system.

Grid-Tied and Grid-Interactive Power – Where They Differ
The main difference between the two system options is not what happens when the local power grid is operating normally, but what happens when the power is out, fluctuating or more expensive. Blackouts and brownouts that can damage equipment are occurring with increased frequency in many parts of the country, and so-called “storms of the century” are regularly in the headlines these days. This year started off with news of rolling blackouts and extreme storms in many regions.

These types of conditions should worry those who operate grid-tied systems, which are incapable of delivering power during blackouts and emergencies. Per national and international industry safety standards, grid-tied installations must disconnect for safety reasons (utility workers restoring power could be exposed to potentially lethal backfeed AC if the system stayed online). Also, the power fluctuations in solar panel-generated energy caused by cloud shadows, wind, trees and natural light variation make it impossible to use this non-grid augmented raw power to operate home or office appliances from the panels alone.

Photo courtesy of SolTerra

In contrast, grid-interactive PV systems use bi-directional energy transfer capability and smarter electronics to tie into the local energy utility when it most benefits users and be more independent when it does not. During emergencies when the grid’s down, the interactive system switches to stored power in batteries and uses the panels to help keep them charged.  During normal times when the user wants to lower his energy costs and consumption, he can chiefly rely on renewable energy sources to offset the utility, turning to the grid only when he needs to augment his clean, self-produced power or charge an energy storage system such as a battery bank. A smarter grid-interactive system prioritizes battery charging, running loads and dealing with the utility in that order, offering total flexibility. In this way, grid-interaction lets consumer and commercial users get highly reliable, cost-effective energy while staying environmentally aware and responsible.

This is where the grid-interactive system takes a clear lead. For an incremental extra investment during installation, a home or business can get the best of both worlds: greener living plus cost savings when the grid is online, and reliable backup power when the grid is down or compromised, or when electricity is expensive. The difference is not so much in the costliest part of the solar energy system, the panels on the roof, but in the balance-of-system components that convert electricity and potentially the energy storage required to deliver power reliably and independently of the grid.

The Grid-Interactive Way of Energy Conversion And Storage
All renewable and solar energy systems use an inverter, which is a device that converts the DC power generated by solar panels (or by a wind or hydro turbine) into the AC power that appliances, electronics and other everyday items need to operate. In a grid-interactive system, that inverter is a much smarter, more agile device, capable of accomplishing multiple goals as opposed to the one-trick grid-tied inverter.

For example, a grid-interactive inverter can perform as a battery charger and store energy in a battery system designed for residential and commercial applications. It can also convert battery-produced DC during an outage into useable AC power and charge those batteries during the day from the panels or a generator. It can even turn a generator on as needed. Having battery backup taking care of power needs in the evening means the generator’s runtime and fuel inefficiency can be greatly reduced during an outage.

Investing in a grid-interactive system built around a smarter inverter and backup batteries for energy storage is becoming the norm in renewable energy systems. The benefits of having a second system for clean, reliable backup power during outages or peak use time are compelling.

Grid-Interactive Component Design and Cost
You can find grid-interactive and off-grid systems in places where solar, wind or hydro may be the only source of power aside from a generator, which includes field hospitals, Arctic research stations and military outposts. For this reason, the reliability and quality of grid-interactive inverters and components based on off-grid technology is usually superior and well suited for premium commercial and residential use.

While grid-interactive design effectively delivers twice the system, it doesn’t cost twice as much. The difference between the cost of grid-tied and grid-interactive systems starts at 15 percent with essential backup capability (usually furnace, some lighting, refrigerator, TV and Internet/PC). Larger homes and small businesses may want to invest in greater backup capacity, and that’s another advantage of grid-interactive design topology; it’s much more amenable to a building-block approach as well as the addition of inverter and storage capability.

Making the Right Renewable Energy Decision
Regardless of the type of solar installation in use, electricity users have experienced the setbacks of power outages. It can be exasperating for a refrigerator full of groceries to fail or a business to lose a day of productivity when the grid goes down, but it also starts the conversation around alternative options.

Grid-interactive technology is a necessity in developing countries where users only have access to the traditional power grid for part of the day. A grid-interactive option delivers continuous access to electricity and enables augmenting the grid with local renewable sources, instead of relying on more coal, nuclear or other controversial forms of power generation to meet local needs.

OutBack Power Energy Cell

As the costs of greener systems become more competitive, the industry is seeing a move from renewable energy to renewable capacity. A large part of the cost of solar, wind or hydro systems comes from energy storage, which can sway consumers on price to implement a system that relies on the grid for energy storage or procurement. Lead acid batteries are an inexpensive, proven chemistry, plus the weight of the batteries poses less of an issue for stationary installations in houses and buildings. However, users may see fewer charging cycles, which would require upkeep of batteries over the total life of a system. Lithium ion batteries provide high density and efficiency, which leads to more charge cycles, but the economics of this technology are still prohibitive for many installations.

The bottom line difference between grid-tied and grid-interactive is this: either type of system will save money when the grid is operating according to the status quo. Investing up-front in grid-interactive technology to take that next step in secure energy storage gets owners twice the system and reliability. That cost difference becomes slight over the system’s payback period.

Today, users in grid-accessible areas can commit themselves to a renewable energy future without taking the extreme step of moving off-grid power or accepting the built-in limitations of grid-tied systems. The option of having an independent method of storage for energy with grid interactivity lets the spectrum of users reap the financial and environmental benefits of cleaner solar, wind or hydro power in ideal conditions, while keeping open the option of going to the grid when practical for surplus energy sellback. With the trend of extreme weather hitting geographies all over the country, and with energy costs not getting any cheaper, having a Plan B to tap into stored energy when the grid goes down or gets expensive becomes top priority. The outcome will be greater energy reliability, lower bills, smaller carbon footprints and more satisfied customers.

For more information, please visit OutBack Power at www.outbackpower.com.

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