Better home batteries are changing the sustainable energy game

As the cost of solar and wind power continues to drop, sustainable energy is in the middle of a growth spurt. And one of the technologies that may fuel the next phase of sustainable power for homes, companies, and cities has nothing to do with turbines and rooftop installations. It’s all about batteries.

Consider the new Peña Station Next project taking shape in Denver, a joint venture among local government, Xcel Energy, and Panasonic. This forthcoming 400-acre “sustainable small town” will run on the energy coming from a large series of solar panels connected to a 1-megawatt, grid-connected battery. With this massive battery extending the usability of solar energy beyond daylight hours, this new development seeks to become independent of outside energy sources.

Peña Station Next could be an early example of how the confluence of a new generation of energy generation and storage technology helps cut energy costs, and even help some homes and businesses go carbon-free. As analysts at McKinsey & Company put it, energy storage is the next disruptive technology in the power sector, and may be a key to helping public and private players achieve their sustainability goals.

Photo by Hannah Peters/Getty Images

Since touting the Tesla Powerwall storage battery and solar roof tiles, Elon Musk has waxed eloquently about the possibility of everyday Americans generating and storing their own power. And Tesla is far from the only game in town. Rising electricity rates and better battery tech—the cost of battery storage has plummeted from $1,000 per kilowatt-hour to $230 between 2010 and 2016—have make it more cost-effective for everyone to buy into alternative energy solutions. The company’s Gigafactory in Nevada will soon be eclipsed by an even bigger battery plant in China.

According to a report from the Energy Storage Association, the first quarter of 2017 was the biggest quarter yet for the U.S. energy storage market, and due to extensive installations in California, the megawatt (MW) hours of storage deployments doubled last year. Even Google’s parent company Alphabet is getting into the energy-storage game, funding a moonshot looking at a novel way to store power.

Part of the lure of plugging in is a direct result of the way we pay for electricity. Requesting power during peak hours costs more, especially as rates rise. If a factory or office can time-shift the demand—drawing from the grid when power is cheap, and using the stored energy to when the rates are high—it can really impact the bottom line.

In Irvine, California, LBA Realty installed a 1.3-megawatt battery system, the largest in the U.S., inside its new 2.1 million-square-foot Park Place mixed-use development. The system will save them $900,000 during its first year in operation. And Tesla plans to deliver the world’s largest lithium ion battery to South Australia this summer, part of a test to see if sustainable energy generation and battery storage can create a more stable, sustainable energy supply.

LBA Realty

According to Vikram Aggarwal, CEO and founder of EnergySage, an online marketplace that connects solar shoppers with multiple solar installers, there’s a lot of awareness and interest in residential and commercial customers in solar and battery systems. It’s all about economics, he says, and he sees a massive tipping point just a few years away.

The battery market is still in its early days, with an array of different competing technologies, but utilities are starting to see the benefits of cutting peak-hour power usage, and pushing for more storage capacity to be added to the grid.

While the biggest benefits come with scale, there are increasingly more benefits for homebuyers. Last month, the United Kingdom opened their power grid to storage batteries, and IKEA jumped into the fray by offering solar panel and battery storage kits for $9,155 that the company claims pays for itself in a dozen years. Imagine the additional savings that would come with generating your own power with rooftop solar installation and then being able to store all of it at home.

The economics will only get better as the technology continues to develop. According to a paper by Panasonic, which is part of the Peña Station Next project, by 2025, the cost of battery storage may be half of what it is today. Energy storage may be the “Swiss Army Knife” of the power grid, a “flexible, nimble resource,” says the study. Let’s hope it helps cut the time it takes to build more sustainable energy solutions.