SolarCity has reservations for at least 65 energy storage systems in California, according to the latest SGIP summary. (SGIP is California's Self Generation Incentive Program, which provides a subsidy for fuel cells, biogas digesters, energy storage, etc.) In 2009, SGIP started offering credits of $2 per watt for energy storage systems that can store power from an eligible on-site generation system and discharge it at rated capacity for a four-hour period.

SolarCity promotes its system as a way for homeowners to have backup power in case of utility outages. According to the company, there are more than 100 pilot projects under contract. Most of the SolarCity projects in the SGIP spreadsheet are 5 kilowatts in size, using batteries from cousin company Tesla Motors.

Eric Carlson, Lead Architect of Energy Systems at SolarCity, spoke at last week's Energy Storage Association and shared some of the firm's experience in its first 100 energy storage installs.

Carlson said, "We think storage will be absolutely necessary to enable the deployment of solar across the grid at extremely high penetrations," adding, "When you combine solar and storage, you have a dispatchable asset at the load."  

SolarCity has built two community deployments using a 9-kilowatt, 18-kilowatt-hour lithium-ion battery, but Carlson notes, "There is no magic formula for proportions -- it depends on usage at the site." Earlier installations used lead acid batteries.


SolarCity's Energy Systems Architect noted some lessons from the field:

  • The storage system typically gets installed inside a garage. It turns out that people are not happy in turning over precious garage space to a battery and a protective bollard. Carlson said, "Customers hated the space being used in their garage." The new Tesla-labeled 10 kilowatt-hour lithium-ion battery bolts on the wall and mitigates some of the space issues.
  • A new acronym, NIMG, stands for "Not in my garage."
  • "Interconnection costs and requirements need to reflect the true cost of of the interconnect. Requirements need to be consistent, codified and predictable across multiple regions." The process needs to be streamlined and over-the-counter.
  • "We need harmonized tariffs for combining PV and storage." 
  • "We need outdoor-hardened devices that are low- or no-maintenance."
  • Installing solar jointly with energy storage, either where storage was retrofitted or installed with solar, reduces costs and brings the net cost of storage down.


As Jeff St. John reported, "Battery backup could really help solve some of the larger-scale problems associated with connecting lots of intermittent solar power to the grid. Energy storage could help mitigate the distribution grid voltage sags and surges that can occur when clouds pass over neighborhoods with lots of rooftop solar, for example. It could also help shift stored solar power to cover peak loads that may occur slightly later in the afternoon than solar’s peak production times."

Calculations by Sam Jaffe, now of Navigant, found SolarCity offering the systems at a cost of $2,000 per kilowatt-hour, which would add up to $40,000 for a 5-kilowatt system. Adding the ITC benefits to the SGIP incentives cuts the cost of the system to $800 per kilowatt-hour, Jaffe estimated. With time-of-use benefits added to that, “The homeowner is paying about $6,000 for the benefit of having reserve power during short-term blackouts, which is roughly equivalent to what an advanced hard-wired generator would cost,” he said.

Tesla and SolarCity aren’t the first to try out batteries to backup solar power. Japan’s Panasonic and Hitachi are installing home-based, solar-backed energy storage in pilot projects. In the United States, battery startup Xtreme Power is eyeing smaller-scale solar-backed applications to match their big, substation-sized grid batteries, and utility AEP is working with S&C Electric Co. on “community energy storage” systems that back up grids at the neighborhood level. General Electric just inked a partnership to integrate its nickel-salt Durathon batteries with Arista Power’s power-balancing system to back up solar and wind power.

One interesting note on the Tesla-SolarCity effort is that the two are offering the systems for lease in California, according to SolarCity’s website. That could open the door to SolarCity managing the batteries en masse, to maximize the value of the energy they’re storing.  

There is always a policy piece with energy storage. SolarCity's Carlson emphasized, "We need to harvest multiple income streams with energy storage. We need policy to align customer benefits with grid operation and wholesale market value."


SolarCity's SGIP reservations