California's recent transition to a new framework for compensating customers who generate their own energy and export a portion of it back to the grid has sparked interest in battery storage. Wood Mackenzie, an energy market research firm, projects that storage systems attached to distributed solar systems in California will rise from around 11% to over 80% by 2027. Companies like Sunrun and sonnen are introducing products and offerings with energy storage to derive the most value out of the new framework. Sunrun's offering, Sunrun Shift, enables customers to store excess rooftop solar energy for use when electricity prices are the highest.
The new net billing tariff, also called NEM 3.0, reduces the payback period for customers who attach storage systems to their rooftop solar to around eight years depending on the utility footprint. Wood Mackenzie expects that the attachment rates of storage systems to distributed solar in California will increase to more than 80% by 2027. Companies that have existing storage offerings or expertise with battery permitting and installations are expected to be successful under NEM 3.0.
However, NEM 3.0 is expected to affect the distributed solar and storage industry differently. While larger companies like Sunrun expect to see growth, smaller solar companies could struggle if they do not have prior expertise with storage systems and fail to transition quickly to the new framework. Under the prior NEM framework, the only economic driver for customers to install batteries in their homes was for resiliency in case the grid goes out. Now, customers can also use their batteries to better control when they export power back to the grid to get the highest credit value during certain times of day and seasons.
Solar contractors are now focusing on selling solar-plus-storage installations, because home battery systems are more economically advantageous under NEM 3.0 rules. Sunnova, for instance, announced a plan to offer a free battery for new California customers who sign up for its solar-plus-storage lease services. Sunrun, meanwhile, launched Sunrun Shift, which includes a storage configuration that allows customers to consume their self-generated energy during peak hours.
Source: utilitydive.com