This post was written by Josh Weiner, Solar Expert Witness & Solar Engineering Expert. Mr. Weiner has been at the forefront of the solar energy industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility, grid-scale, and ev charging solar and storage applications. 

Typically, the first figure developers and asset managers use to compare energy storage technologies is its dollar per kilowatt-hour ($/kWh) cost. But that seemingly simple metric may not be an accurate apples-to-apples one unless you’ve asked your battery manufacturer some important engineering questions.

To fairly compare the $/kWh cost of selected energy storage systems, we recommend your energy storage system designers ask the following four questions. In Part 2 of our series, we’ll explore technology considerations, applications and bankability.

Question 1: Is the battery vendor defining $/kWh in DC or AC watt-hours?

Storage, like solar, is becoming commoditized, so we need a common metric for pricing energy storage systems. Just like solar system dollars per watt pricing, you’ll need to have all vendors offer you pricing in either AC or DC kilowatt-hours. Their answers will lead to more questions; however, how are AC or DC kWhs defined? Which one includes the percentage of depth of discharge (DoD)? Are any parasitic loads included? What about DC-coupled systems, which may only have one inverter for both the PV and storage systems? Your engineer should know the answers to these questions to make a fair comparison of batteries.

Question 2: What about OpEx?

With batteries, it’s difficult to talk about capital expenditure (CapEx) without also talking about operating expenditure (OpEx). For instance, batteries are more expensive to maintain than PV systems due to their sensitivity to things like:

• Temperature (battery HVAC systems require routine maintenance)
• Fire suppression systems
• Augmentation schedule (e.g., “capacity maintenance agreement” to replace degraded and failed battery modules over time as they wear out)

The last category mentioned above is particularly problematic due to the replacement schedule of batteries being closely tied to their use-case application. Some projects may require battery replacements within 5 years, while others in 12 years, and some last well beyond 20 years. Therefore, it’s important to take into account different duty cycles, technology choice, and specific use cases to determine the appropriate OpEx.

In addition, recent data has become available showing that actual battery performance is often different than what’s warrantied, which unfortunately translates into shorter-than-expected battery life spans, and, therefore, more cost to the project owner.

Moreover, considerations such as auxiliary loads, thermal management and round-trip efficiency (RTE) also degrade over time, resulting in higher battery system losses, and, therefore, less return on investment. These are all OpEx costs that can be carefully calculated and accounted for, but only when a thorough understanding of project economics and underlying product configuration and technology are combined to identify the true costs of ownership (more about this in question 3).

Question 3: Does your $/kWh figure include DoD and efficiency factors?

Similar to a solar panel’s STC and PTC ratings, batteries can also be subject to a lower kWh production when deployed outside the ideal conditions of a test laboratory. In addition to different temperatures, your battery’s actual $/kWh will also depend on its usage profile, recommended depth of discharge, power-to-energy ratio, calendar life, and other factors that an engineer should evaluate. Therefore, when calculating $/kWh, the kWh figure in the denominator needs to be corrected for the actual usable energy of the battery, not the nameplate.

For example, a 100 kWh battery that’s limited to a recommended 80% DoD will need to be calculated as 80 kWh. Additionally, your engineer should account for the battery’s 1-way efficiency, which could be as low as 86% in California, according to the 2016 Self Generation Incentive Program (SGIP) iTron report of average lithium-ion RTEs.

In this 100 kWh example, for the nameplate rating price of $500/kWh for a lithium-ion battery system in California, we could use the following formula to reveal the adjusted $/kWh that accounts for usable kWh energy for a $500/kWh quoted price:

$500/(80/100 x 86/100) ≈ $725/kWh … a 45% price increase!

Consequently, when someone quotes you a price in $/kWh, always ask the above questions, or at least ask if the price is calculated to include discounts for RTE and DoD. If their answer is, “Yes, we absolutely took that into account in that pricing,” then you’re set to compare apples-to-apples pricing. If they aren’t sure what you mean, or it’s not showing up in any purchase agreements or POs, then that’s a good indicator you need to double-check the fine print and perhaps do your own calculations or consult with an engineer to evaluate all the factors in your battery choice.

Question 4: What’s your levelized cost of energy (LCOE)?

As we’ve seen, regardless of whether the $/kWh number offered is in AC or DC watt-hours, or defined as OpEx or CapEx for tax purposes, the total cost of ownership picture is still incomplete.

As with total dollars-per-kilowatt solar PV system pricing, you’ll want your engineers to evaluate the total turnkey price that includes everything needed to be placed in service. In addition to the cost of the actual energy storage hardware, your LCOE figure will need to account for the cost of labor, engineering and feasibility studies, permits, utility interconnection applications and field studies, protection relays, total kWh throughput (including annual degradation of capacity and RTE), etc.

As long as your engineer has accounted for the above kWh questions and typical project costs, you’ll at least be able to make a somewhat-simple price comparison to evaluate your energy storage system. Of course, if you’d like the help of SepiSolar’s “solar enginerds” to evaluate your energy storage choices, please contact us.

To read Part 2 of our series about evaluating technology, applications and bankability, sign up for SepiSolar’s newsletter, or follow us on LinkedIn, Twitter or Facebook.

Josh Weiner is CEO and Founder of SepiSolar. Follow Josh on Twitter at @SepiSolarJosh

This post was written by Josh Weiner, Solar Expert Witness & Solar Engineering Expert. Mr. Weiner has been at the forefront of the solar energy industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility, grid-scale, and ev charging solar and storage applications. 

Solar engineers love a good mystery to solve. A few months ago, our engineers overheard a phone call between one of our team members and a customer who was on a job site in Oregon. They were discussing the utility service and voltage of some very old, unlabeled service equipment. With zero photos from the site and not even so much as a voltmeter available to the field tech, we wrote down everything the field tech said, which amounted to a rather short description:

There are two lines coming in from the pole, then a big transformer and a small transformer. I can’t read the voltages, but then three lines go out to the main disconnect.

At this point, most engineering companies would dig their heels in and insist on knowing the line-to-line as well as line-to-neutral voltages (among other things) before proceeding with the designing. But SepiSolar didn’t balk; we jogged our brains together while sketching on the white board and searching the web, but were initially stumped.

But it was something about the different sizes of the transformers that stuck with us; we knew that was the key data point. In about 10 minutes, we were confident the site was utilizing an ‘Open Delta’ service from the grid, which taps only two phases of the utility grid but delivers a three-phase circuit to the facility. Knowing that a service like this is meant to handle most of the power demands on the two phases that come from the larger transformer, we opted to interconnect all the PV power to these two phases, leaving the power leg and smaller transformer alone. Solar engineering mystery solved.

Solving engineering and design mysteries and optimizing the system for a unique site like this is exactly the kind of challenge that SepiSolar’s engineers thrive on. In under an hour, we had a full system design for this customer and explained to him exactly how he needs to install this project safely.

If you’ve got a solar mystery that needs solving, call a SepiSolar “enginerd.” We’d love to solve it for you.

Click here to learn more about our solar consulting services.

This post was written by Josh Weiner, Solar Expert Witness & Solar Engineering Expert. Mr. Weiner has been at the forefront of the solar energy industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility, grid-scale, and ev charging solar and storage applications. 

In the aftermath of the recent hurricane in the southern United States and the Caribbean, I’ve seen some heavy discussion surrounding the state of affairs of residential solar in Florida, and how the state’s residents are being affected by the current laws and regulations concerning solar in the area.

A recent article criticized Florida Power & Light (FPL), the major electric utility in the state, for not allowing owners of solar systems to activate their solar in the aftermath of Hurricane Irma when a majority of the grid was down. I noticed the article getting a lot of attention, and I also noticed a lot of misinformation surrounding discussion of the article and within the article itself.

FPL have historically been hostile toward solar. Just do a quick online search and you’ll find lots of news about their anti-solar lobbying, and even influencing the passing of laws requiring homeowners to connect to the grid, whether they plan on using it or not (basically killing off-grid solar). However, we can’t blame FPL in the recent post-hurricane situation. Requiring inverters to become non-operable in the event of a grid outage is not something FPL mandates; it comes from something called UL 1741. The Anti-islanding requirement was created so that when the grid goes down, solar inverters would not be pushing power onto what is supposed to be a de-energized grid, creating safety hazards for anyone working on the grid infrastructure. So even if FPL was totally okay with people running their inverters during a power outage, they wouldn’t be able to, because the inverter should have been designed with UL 1741 in mind, and simply would refuse to turn on without a grid connection.

So FPL are not the bad guys in the aforementioned situation, and homeowners shouldn’t be attacking them for enforcing a UL requirement and keeping their workers safe. This is (and should be) every electric utility company’s approach to this issue.

Most importantly, what we should be looking at are solutions to the problem of residents not being able to access their solar energy when they need it the most. How does someone keep their solar system operating even when the grid goes down? Why, batteries, of course! And even if FPL wants every single homeowner to connect to their grid, there are more and more systems out there (Tesla Powerwall, Sonnenbatterie, SMA Sunny Island, to name a few) that permit grid-connected solar and batteries with the option to operate off-grid in the event of a power outage.

With the way the market is trending, I can guarantee we’ll start seeing a push for these solar and battery grid-tied systems in Florida before too long. Of course, expect to see a push-back from FPL on the issue as well.

Richard Dobbins, P.E., is SepiSolar’s Chief Electrical Engineer 

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