SolarCity, one of the largest solar installers and leasing companies in the US, has moved into providing energy storage via pilot programmes for residential and commercial customers in key regional markets including California. Will Craven, company spokesman and director of public affairs, spoke by telephone to PV Tech Storage about the regulatory situation facing SolarCity and others in the rapidly growing area of energy storage-plus-solar.
Craven said that he hoped recent problems in California, where the company successfully campaigned to have grid interconnection charges levied on its customers installing storage lifted, would not be repeated elsewhere and described storage as an “opportunity” for utilities to rethink their business model in the wake of disruptive challenges from solar and other renewable technologies.
SolarCity told PV Tech a while back that adding storage is an “inevitable next step” for solar. How are things looking at the present moment and what are some of the challenges being faced?
Everyone agrees now that storage is a key component of the grid’s evolution. From what I’m hearing, those discussions [on storage] at Intersolar were packed, more so than almost any other topic and the really forward-looking regulatory bodies and public utilities commissions certainly recognise its role.
I’m wondering if after this recent episode in California, if we’re going to fight a lot of the same… if we’re going to have a lot of the same conversations that we had about solar, which I find unnecessary because having already answered all questions about solar’s impact and interaction with the rest of the grid, it doesn’t make a whole lot of sense to go through the same hoops for storage per se.
There are differences, different hoops that absolutely do need to be addressed with storage. There’s a lot more interplay between it and the grid but I hope that we don’t have years of stalling from other utilities.
An analyst we spoke to while ago said that the kind of tactics that are put in place to be obstacles to solar seem to crop up in state after state, meaning the solar industry seems to have the same arguments from one state to the next. Is that fair and do you have a strategy prepared to fight that?
It’s certainly coordinated at the national level really, with [utilities’ lobbying group] Edison Electric Institute at the hub of things. As the utilities’ industry association, that is the central hub of what I believe is a national strategy to undermine solar.
You simply counteract it by demanding a back-to-basics discussion on solar’s interaction with the grid and then frankly what the goals should be in having these discussions. Are we trying to somehow fit solar and storage and other exciting new technologies into this old paradigm? Is that how we’re approaching the discussion or are we saying… I would hope that regulatory bodies would start first with the question – “what do we want?” Rather than saying, “how do we maintain as much of the old system as possible and sort of patch these new things in”, I would rather start with the question, “What do we want and then, how do we get there, in the most cost-efficient way?”
Because really, the old ways are often an impediment to what we actually want going forward, which is a cleaner, more ambitious, more affordable grid.
Is it problematic when you’ve got investor-owned utilities that might look at short-term profit?
It appears that that may be a problem, but I don’t think it has to be. I think this is an opportunity. The utilities need to address the fact that they do have some competition and like other businesses, it’s an opportunity to try to cut costs in order to compete.
Likewise, I believe you’ve seen Pete Rives’ blog post on storage? What he was saying there is that utilities are often best positioned to kind of direct stored energy when and where it’s needed and we are perfectly willing to engage in discussions with utilities on how to enable them to utilise behind-the-meter or customer-side storage to manage the grid, for example at peak times when it’s under strain. So, you know we see opportunity. It’s going to require some creative thinking on their part.
Storage has been touted as a technical solution to many of the ‘problems’ that solar has been claimed to raise due to the variable nature of its energy output. Could storage have a more direct appeal to utilities than solar does?
It’s just such a useful tool for them that it makes sense. Historically utilities have tried to develop a rate-based power plants and power lines and other things like that that increasingly, one would think that in the 21st Century, batteries are one of the main pieces of infrastructure that…. It is the tool by which you’re really going to manage and smooth grids for maximum efficiency.
Do you think the regulation they’re subjected to is adequate, through utilities’ commissions and so on to make sure they don’t exploit that monopoly position?
Absolutely. I think so. Also, increasingly, I believe the consumer awareness is I think greater than it has been in the past, typically the public hasn’t been too engaged in these discussions. Now that consumers are proactively buying the grid - or a stake in the grid - and investing in it themselves, they’re going to demand more of a say in what happens. So I expect that’s going to be a new variable in discussions going forward – greater public awareness and participation in the “electricity discussion”.
For example, 20 to 25 years ago, none of us had really any choice as far as how to get our electricity, who to buy it from and what type of electricity to buy. That has changed and every day, many thousands of people go solar and so, those people are interested in a grid that supports solar, that makes sure its value is recognised and understood and that essentially protects their investment. Likewise, SolarCity is hiring around 400 people a month, so we have a growing solar workforce. So it’s a growing economic interest in a place like California or Arizona and across the country I believe solar added 20,000 jobs last year. So, on the customer side and the industry side there’s going to be greater participation in these regulatory discussions.
Are you surprised or impressed with how quickly this public acceptance of solar in the US has got to this point and do you think a similar curve is coming in storage?
It’s hard to say because looking back it appears to me it was the advent of the lease and the power purchase agreement (PPA) that really facilitated solar becoming affordable for most of the American public. Prior to that, you had to have the cash upfront and most Americans did not have that, so it used to be a boutique item, mostly for the wealthy. That’s been the biggest shift. Now solar is genuinely within reach of the middle class.
What about the cost of storage?
I would say, just as certain solar hard costs needed to come down that’s also true of storage but I think with scale and competition and demand, you can expect storage costs to come down significantly in the coming years.
This article has been amended to correct a reference to Will Craven's job title. Craven is a spokesman and director of public affairs at SolarCity, not head of public policy, as originally published.