Adding energy storage to an already robust solar market in California's multifamily housing sector could lead to significant utility bill savings for building owners and tenants, new findings from the Clean Energy Group and partner organizations show.
In a new 50-page analysis released last week, CEG, along with the California Housing Partnership Corp. and Center for Sustainable Energy, found that lower-income apartments provide a ripe opportunity for developers to improve the economics of solar by adding battery storage to such apartment buildings.
"It essentially creates a new pool of savings, so if you were only doing efficiency and only doing solar, you'd get some savings. But if you add storage, you get significantly more," said Lewis Milford, CEG's president and a co-author of the report, "Closing the California Clean Energy Divide."
The authors say the findings are especially relevant in light of California's recent passage into law of the Multifamily Affordable Housing Solar Roofs Program, a $1 billion investment program to deploy solar technologies in affordable multifamily rental housing. The program is expected to extend the benefits of solar power to hundreds of thousands of lower-income Californians.
But solar access by itself isn't enough, the report says.
In fact, shifting policies around rooftop solar in some states, including California, could place owners and tenants of low-income housing at greater risk because the benefits of solar are highly dependent on strong net-metering programs. A number of states have reformed net metering in ways that sharply curtail the benefits of solar, resulting in higher, not lower, electricity bills.
Battery storage effectively reduces that risk, the authors say, by eliminating most of the demand-related charges that utilities pass along to owners of distributed energy systems like rooftop solar.
"Because batteries empower owners of solar PV systems to take control of the energy they produce and when they consume it, storage can deliver deeper cost reductions that can be shared among affordable housing owners, developers, and tenants," the report states.
And unlike stand-alone solar projects, which do little to offset demand-related charges, a properly sized solar system with storage can eliminate nearly all electricity expenses, resulting in an annual electric utility bill of less than a few hundred dollars in some cases.
The addition of battery storage to PV solar projects also provides a huge financial sweetener for developers that commit to deploy more solar in low-income multifamily housing, whether in the new-build market or through solar retrofits to older buildings.
For example, the addition of a $112,100 battery storage system to a $385,000 solar installation increased energy bill savings for building owners and tenants from $15,000 per year to $27,900 per year. That's an 85 percent boost in savings for a 29 percent increase in system costs, the analysis found.
"The addition of battery storage to solar improves the economics of each property analyzed across all utility territories in California, reducing project payback by over three years in some cases," the authors said.
Seth Mullendore, a project manager at the Clean Energy Group, said California provides a good template for expanding solar with storage to multifamily low-income buildings because the state already has the nation's No. 1 markets for both solar PV and advanced energy storage.
Investment in batteries has also been juiced by a 2013 law that added advanced energy storage to the suite of technologies eligible to receive incentives under the revived California Self-Generation Incentive Program.
Under that program, homeowners and businesses that already rely on solar power can invest in batteries that store their generated electricity for later use and avoid using the energy generated from their solar systems during peak times.
The program provides incentives of roughly $1.50 per watt for energy storage systems installed in the service territories of Pacific Gas and Electric Co., Southern California Edison Co. and San Diego Gas & Electric Co.
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