When	Solar+Storage	Make	Sense

Nick	Laws

Research	Engineer,	Integrated	Applications	Center

June	13th	2018	

NAESCO	Technology	&	Financing	Workshop,	Milwaukee, WI
When	Solar+Storage	Make	sense

Costs	vs.	Benefits:		Costs	are	easy,	what	about	the	benefits...

Financial	benefits	can	be	achieved	by:	

1.Utility	bill	reduction	

-	Peak	shaving	(demand	charge	reduction)	

-	Time-shifting	PV	production	(energy	arbitrage)	

2.Providing	ancillary	services	

3.Meeting	critical	load	during	outages

2
When	Solar+Storage	Make	sense

Costs	vs.	Benefits:		Costs	are	easy,	what	about	the	benefits...

Financial	benefits	can	be	achieved	by:	

1.Utility	bill	reduction	

-	Peak	shaving	(demand	charge	reduction)	

-	Time-shifting	PV	production	(energy	arbitrage)	

2.Providing	ancillary	services	

3.Meeting	critical	load	during	outages

To	accomplish	any	of	these	things	well,	one	needs	controls	

(and	ideally	good	forecasts). 3
 

 

 

 

Master 

Planning 

Economic 

Dispatch 

Resiliency 

Analysis 

REopt:	Decision	Support	throughout	the	Energy	Planning	Process

• Portfolio prioritization • Technology types & sizes • Microgrid dispatch 

• Cost to meet goals • Optimal operating strategies • Energy security evaluation 

Cost-effective RE at Army bases Cost-optimal Operating Strategy Extending Resiliency with RE 

REopt	website:	hYps://reopt.nrel.gov/ 4
 

 

 

 

 

Renewable Generation 

Solar PV 

Wind 

Biomass, etc. 

Energy Storage 

Batteries 

Thermal storage 

Water tanks 

Conventional Generation 

Electric Grid 

Fuel Supply 

Conventional Generators 

Goals 

Minimize Cost 

Net Zero 

Resiliency 

Economics 

Financial Parameters 

Technology Costs 

Incentives 

Utility Costs 

Energy Charges 

Demand Charges 

Escalation Rate 

Operations 

Optimal Dispatch 

REopt 

Energy Planning Platform 

Techno-economic Optimization 

Energy Conservation 

Measures 

Technologies 

Technology Mix 

Technology Size 

Project Economics 

CapEx, OpEx 

Dispatchable Net Present Value 

Technologies 

Heating and Cooling 

Water Treatment 

5
Net Zero 

 

Technologies 

Technology Mix

Technology Size

Project Economics 

CapEx, OpEx

Net Present Value

 

6

Renewable Generation 

Solar PV 

Wind 

Biomass, etc. 

Energy Storage 

Batteries 

Thermal storage 

Water tanks 

Conventional Generation 

Electric Grid 

Fuel Supply 

Conventional Generators 

Goals 

Minimize Cost 

Resiliency 

Economics 

Financial Parameters 

Technology Costs 

Incentives 

Utility Costs 

Energy Charges 

Demand Charges 

Escalation Rate 

Operations 

Optimal Dispatch 

REopt 

Energy Planning Platform 

Techno-economic Optimization 

Energy Conservation 

Measures 

Dispatchable 

Technologies 

Heating and Cooling 

Water Treatment 
Solar+Storage	with	flat	demand	charges

Cost-optimal	demand	target

7
A	step	back

1.		Efficiency	measures	come	first	

2.		Demand	management	(depends	on	cost	to	implement)	

3.		Solar	+	Storage

8
Ability	to	shift	load	affects	storage	sizing	and	dispatch

3

0.25

No	demand	 2

TOU	Energy	Rate	($/kWh)

Smaller	Solar+Storage	system

Energy	Rate	($/kWh) Energy	Rate	($/kWh)

kW kW

management 0.20

1

0.15 0

Cost-optimal	dispatches	

	from	REopt

3

0.25

2

With	demand

0.20 management 1

0 0.15

Recommended	reading:	

reference [4] 9
Sunlamp	Study

reference [1] 10
Sunlamp	Study

All	scenarios	resulting	in	Solar+Storage	had:

and/or

reference [1] 11
	 	 	

Sunlamp	Results		

Rate	Structure	when	S+S	is	economical

Every	scenario	with	a	cost-optimal	Solar+Storage	system	had	either:	

• Demand	charges	(TOU	and/or	flat)	

• TOU Energy rates

• or	Both

However,	not	all	scenarios	with	demand	charges	and/or	TOU	

energy	rates	result	in	S+S	systems.

12
	 	 	

TOU	Energy	+	Demand	Charges

Sunlamp	Results		

Rate	Structure	when	S+S	is	economical

Every	scenario	with	a	cost-optimal	Solar+Storage	system	had	either:	

• Demand	charges	(TOU	and/or	flat)	

• TOU Energy rates

• or	Both

However,	not	all	scenarios	with	demand	charges	and/or	TOU	

energy	rates	result	in	S+S	systems.

62%	of	scenarios	with	S+S

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Sunlamp:	Lowering	Tech	Costs

As	costs	lower,	Solar+Storage	is	economical	with	less	complex	rate	structures.

Lowering	Tech	Costs

72% 62% 58% 47%

14 %	Solar+Storage	scenarios	with	TOU	Energy	+	Demand	Charges
Other	potential	benefits

• Ancillary	service	markets	

• Feed-in	Tariffs	and	Net	Energy	Metering	

• Resiliency

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Other	potential	benefits

• Ancillary	service	markets	

• Feed-in	Tariffs	and	Net	Energy	Metering	

• Resiliency

16
Outage

3% ($42k)

Energy

45% ($666k)

Demand

53% ($789k) BAU

Costs

$1,497k

$0

Amount in Thousands ($)

Optimal Solution: PV 113 kW

Battery 5 kW / 6 kWh

Optimal Solution: PV 134 kW

Battery 32 kW / 79 kWh

Resiliency Not Valued Resiliency Valued 

CapEx O&M

Energy Savings Demand Charge Savings

Avoided Outage Costs

(excluding micro-grid 

hardware)

(excluding micro-grid 

hardware)

Benefits Costs Benefits Costs

NPV

$29k

NPV

$58k

$50

$100

$150

$200

$250

$300

Value	of	Resilience

Balance	cost	of	system with	

grid-connected	benefits	(bill	reduction)		

reference [2] 17
Outage

3% ($42k)

Energy

45% ($666k)

Demand

53% ($789k) BAU

Costs

$1,497k

$0

Amount in Thousands ($)

Optimal Solution: PV 113 kW

Battery 5 kW / 6 kWh

Optimal Solution: PV 134 kW

Battery 32 kW / 79 kWh

Resiliency Not Valued Resiliency Valued 

CapEx O&M

Energy Savings Demand Charge Savings

Avoided Outage Costs

(excluding micro-grid 

hardware)

(excluding micro-grid 

hardware)

Benefits Costs Benefits Costs

NPV

$29k

NPV

$58k

$50

$100

$150

$200

$250

$300

Value	of	Resilience

Balance	cost	of	system with	

grid-connected	benefits	(bill	reduction)		

and	

resiliency benefits.	

reference [2] 18
Challenges

• Controls	

• Numerous	active	and	proposed	research	activities	

• Benefits	are	difficult	to	understand	and	quantify	

• REopt	Lite	designed	to	help	

• Resiliency

• Microgrids	can	be	expensive	

• Difficult	to	determine	value	of	lost	load	

• Difficult	to	monetize	resilience

Recommended	reading:	reference	[7] 19
Challenges:	Controls		

What	charges	the	battery	matters

reference [3] 20
Challenges:	Controls		

Dispatching	and	Islanding

21

Excess	PV
Challenges:	Understanding	and	Quantifying	Benefits

developer.nrel.gov/docs/energy-optimization/reopt-v1

reopt.nrel.gov/tool
	 		

	 	 	 		

New	Resilience	Capabilities	released	June	2018

system designed

to survive 24 hour

outage	has		

negative	NPV

accounting	for	Avoided	Outage	Costs	

can	make	project	NPV	positive

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Summary

When	Solar+Storage	Make	Sense	

• Grid-connected	benefits	from	tariff	with	demand	charges	and/or	timeof-use	energy	charges

• Ancillary	service	markets

• Value	of	Resilience

Hurdles	

• Control	systems

• Difficult	to	quantify	benefits,	especially	to	place	a	value	on	resilience

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Thank	you

		www.nrel.gov

NREL/PR-7A40-71813

NREL	is	a	national	laboratory	of	the	U.S.	Department	of	Energy,	Office	of	Energy	Efficiency

and	Renewable	Energy,	operated	by	the	Alliance	for	Sustainable	Energy,	LLC.	
References

https://openei.org/wiki/Solar+Storage

reopt.nrel.gov 

[1] Joyce McLaren, Kate Anderson, Nick Laws, Pieter Gagnon, Nicholas DiOrio, Xiangkun Li,

Identifying Critical Factors in the Cost-effectiveness of Solar and Battery Storage in Commercial Buildings,

NREL/PR-6A20-70813, February 2018 

[2] Nicholas D. Laws, Kate Anderson, Nicholas A. DiOrio, Xiangkun Li, Joyce McLaren,

Impacts of valuing resilience on cost-optimal PV and storage systems for commercial buildings,

Renewable Energy, Volume 127, 2018, Pages 896-909, https://doi.org/10.1016/j.renene.2018.05.011. 

[3] Emma Elgqvist, Kate Anderson, and Edward Settle. 

Federal Tax Incentives for Energy Storage Systems, NREL/FS-7A40-70384, January 2018 

[4] Eric O'Shaughnessy, Dylan Cutler, Kristen Ardani, Robert Margolis,

Solar plus: Optimization of distributed solar PV through battery storage and dispatchable load in residential buildings,

Applied Energy, Volume 213, 2018, https://doi.org/10.1016/j.apenergy.2017.12.118. 

[5] Kate Anderson, Dylan Cutler, Nick DiOrio, Emma Elgqvist, Nick Laws, Dan Olis, Andy Walker

Optimizing Storage and Renewable Energy Systems with REopt,

NREL/PO-7A40-70333, December 2017 

[6] Otto VanGeet, Emma Elgqvist

Campus Energy Approach, REopt Overview, and Solar for Universities,

NREL/PR-7A40-70252, October 2017 

[7] Kate Anderson, Nicholas D. Laws, Spencer Marr, Lars Lisell, Tony Jimenez, Tria Case, Xiangkun Li, Dag Lohmann, Dylan Cutler

Quantifying and Monetizing Renewable Energy Resiliency. 

Sustainability, 10(4), 933, 2018, https://doi.org/10.3390/su10040933 

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Disclaimer

This	work	was	authored	by	the	National	Renewable	Energy	Laboratory, operated	by	

Alliance	for	Sustainable	Energy,	LLC,	for	the	U.S.	Department	of	Energy	

(DOE)	under	Contract	No.	DE-AC36-08GO28308.	Funding provided by U.S. 

Department of Energy Office of Energy Efficiency and Renewable Energy Federal 

Energy Management Program, by the U.S. Department of Energy Office of Energy 

Efficiency and Renewable Energy Solar Energy Technologies Office, and by the Clean 

Energy Group. The	views	expressed	in	the	article	 do	not	necessarily	represent	the	

views	of	the	DOE	or	the	U.S.	Government.	The	U.S.	 Government	retains	and	the	

publisher,	by	accepting	the	article	for	publication, acknowledges	that	the	U.S.	

Government	retains	a	nonexclusive, paid-up,	irrevocable, worldwide	license	to	

publish	or	reproduce	the	published	form	of	this	work,	or	allow	 others	to	do	so,	for	

U.S.	Government	purposes.

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