Solar-storage combo gains foothold in Southeast

Source: Kristi E. Swartz, E&E News reporter • Posted: Thursday, May 17, 2018

ATLANTA — An outsider looking for a way to uniformly expand solar across the greater Southeast is going to have some trouble.

Hardly any two states treat solar policy the same.

In a region dominated by regulated utility monopolies, some take a competitive bidding approach, others use a standard offer tariff while some stay within the strict confines of a resource planning model.

Solar across the region has grown, regardless of the patchwork approach. The market is 18 times larger than it was in 2012, and states are planning to add a combined 16 gigawatts of solar over the next five years.

“I think we can do much better,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association at the start of the Solar Power Southeast conference, held here annually.

Industry experts stressed that hashing out policies in each state is more important than ever as solar costs continue to fall and technologies like storage are becoming more common. Many solar developers said yesterday that customers are asking for projects that are a combined solar-storage option now.

“When you have new technologies, you have to adopt policies to make that work,” said James Marlow, president and co-founder of Atlanta-based Radiance Solar. “People who don’t participate in policy, they think it’s easy, or that we’ve done policy before, so we’re finished with that.”

That could be challenging for a region where the regulatory structure has been deemed static.

“You look at each market, look at the economics, try to come up with policies, it isn’t an easy thing,” Marlow said at yesterday’s conference, a product of SEIA and the Smart Electric Power Alliance.

The industry has rallied around storage because of its ability to expand solar’s opportunities. When it comes to microgrids, the discussion is a little more complicated. Some argued that last year’s high-powered storms that slammed into Puerto Rico and the Southeast create the perfect opportunity for states and utilities to add microgrids in critical areas. The electric companies at the conference yesterday agreed but said it’s not that simple.

Duke Energy Corp. set up a microgrid at a Charlotte firestation as part of a pilot project in 2015. The system was able to run on a battery and solar combination three times since then, keeping the critical emergency station running, said Tom Fenimore, Duke’s technology development manager.

But when presenting the project to a large group of engineers and technical experts, a statistician told Fenimore the microgrid increased the resiliency but decreased everyday reliability. “I was just floored. We introduced a half a dozen points of failure [on the grid],” Fenimore said. “We’re talking about fundamentally changing the grid. Be careful that in the name of resiliency you don’t impact a customer’s reliability.”

Fenimore’s comments are common coming from utilities, who often push the “let’s pause and take a breath” attitude. This is because they are charged with keeping the lights on 24/7. Others argued that the cautious approach will only mean that outsiders are going to step in.

“This room is filled with people who could probably tackle most of the issues that we’re dealing with, I would venture to say in a less cumbersome, more efficient and less costly way,” said Steffanie Dohn, government relations director for Southern Current, a solar installer in the region.

Dohn called for the Southeast to change to a competitive market, something that is highly unlikely anytime soon.

“I think that there needs to be conversations that are less driven by a utility or whoever is controlling those decision,” she said.

In Florida, the destruction from Hurricane Irma led state Rep. Holly Raschein (R) to introduce a bill that would create a microgrid pilot program for the Florida Keys, an area she serves. The bill, which came with a $10 million appropriation, never got a hearing, however.

Raschein said she will work on the bill this summer and reintroduce it next year. Meanwhile hurricane season is just weeks away.

“You’ve got to start having that conversation quickly, that’s such a key component to this,” she said.

Duke Energy’s competitive power unit has microgrids, and the regulated utility has pilot programs in some of its states. Fenimore said management also has mandated that Duke Energy start offering a residential energy management program by the third quarter.

This means his unit is testing the batteries, but the business side hasn’t developed a market mechanism to monetize them.

“Right now, residential energy storage, we’re struggling to make work — at the 10-cents-a-kilowatt model — that’s the Southeast model,” he said.