California bill would force utilities to give rebates for energy-storage systems

Utilities would fund rebates by collecting fees from customers

SDG&E battery
Credit: A new vanadium redox flow battery installed by San Diego Gas & Electric

A bill that recently won state Senate committee approval would make California the first state to require utilities to dole out rebates to customers who install energy storage systems.

The Energy Storage Initiative (SB700) was approved last week by the state's Senate Energy, Utilities and Communications Committee and is awaiting a full senate vote.

The bill, authored by State Sen. Scott Wiener, a Democrat, would require the electric utilities to provide rebates to their customers by Dec. 1, 2018 for the installation of energy storage systems meeting certain requirements.

SDG&E vanadium redox flow battery SDG&E's new vanadium redox flow (VRF) battery substation

SDG&E's new vanadium redox flow (VRF) battery.

SB700 would require utilities to collect up to $166 milliion annually from ratepayers from 2018 through 2027 to fund the Energy Storage Initiative, which would then use the funds to provide rebates to customers who install energy storage systems.

The Energy Storage Initiative bill would also reserve up to 25% of the fees collected by utilities to pay for energy storage systems for low-income residential housing  and disadvantaged communities, and for recruiting and job training for workers in the energy storage systems marketplace.

"If California is to achieve 100% renewable energy and a zero carbon future, distributed energy storage sited near customer load will be key," said Brad Heavner, policy director for the California Solar Energy Industries Association (CALSEIA). "More distributed energy storage also means less reliance on natural gas plants during peak demand and more on home-grown and renewable solar energy."

Additionally, reducing energy costs during peak use hours will mean utilities won't need to build as much power generating infrastructure, Heavner explained, which "saves everyone money."

"Also, as renewables grow, we need to store the clean power generated in the daytime for use in the evening," he continued. "Solar and storage go hand in hand to produce clean energy and have it available whenever customers need it."

California leads the country in the deployment of solar power systems. In recent months, utilities have also been rolling out lithium-ion and flow battery storage systems to store more renewable energy for use during peak hours of power consumption.

For example, in January, Southern California Edison (SCE) flipped the switch on the largest lithium-ion battery storage facility in the world -- a substation with 80 megawatt hours (MWh) of capacity.

SCE's power storage facility was followed by others installed by Pacific Gas and Electric (PG&E) and San Diego Gas and Electric (SDG&E).

The California Public Utilities Commission (CPUC) ordered SCE, PG&E and SDG&E to solicit more utility-scale energy storage systems. In all, the CPUC is requiring the utilities to meet a target of 1,325MW (1.3 gigawatts) of additional power storage by 2020.

Earlier this month, another bill authored by Wiener (SB71) won Senate Energy, Utilities, and Communications Committee approval and would make California the first state in the nation to require solar power installations on all new construction.

In 2006, the California Solar Initiative (CSI) required subsidy programs administered by utilities to support a goal of installing more solar energy over a 10-year period. Last year, the CSI program was updated with a goal of establishing 12GW of photovoltaic solar energy in California by 2020.

As of August 2016, 4.2GW of solar power had been installed statewide, with the average cost for systems with more than 10KW of generating capacity at about $4.38/watt.

The global energy storage market is expected to double this year as homes, businesses and utilities adopt battery energy storage to supplement rooftop solar and other renewable energy systems and to more evenly distribute power during peak hours, according to a recent report by IHS.

tesla kiuc solar battery Tesla

Tesla recently went live with a new power station on Hawaii's Kauai island, which consists of 55,000 solar panels generating 13MW of electricity and storing it in 272 Tesla Powerpack lithium-ion batteries.

According to market research firm IHS, over the next decade lithium-ion (Li-ion) batteries will become the mainstream energy-storage technology, with more than 80% of global energy storage installations including it by 2025.

Last year alone, the global energy storage market was expected to double, from 1.4 gigawatt hours (GWh or billion watt hours) added in 2015 to 2.9GWh.

Over the next decade, energy storage capacity in developing countries is expected to skyrocket 40 fold -- from 2GW today to more than 80GW, according to a recent report by the World Bank Group.

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