Armed with a $1.8 million grant from the CPUC,  SunPower is looking to demonstrate the integration of energy storage systems with existing PV systems for commercial customers.  SunPower is partnering with Ice Energy, Xtreme Power and ZBB Energy (NYSE Amex: ZBB), and working with an unnamed major retailer to demonstrate the benefits of combining PV with energy storage. 

The "unnamed major retailer" is, in fact, named in the CPUC release -- it's Target Stores.  The program will be implemented by SunPower in conjunction with PG&E, KEMA, Sandia National Laboratories and Target.

The CPUC grant is part of the California Solar Initiative (CSI) RD&D program ('RD&D,' oddly, stands for Research, Development, Deployment and Demonstration.)  The CSI aims to create 1,940 megawatts of new, solar-produced electricity by 2016 with a budget of $2.2 billion over 10 years.

I spoke with Greg Tropsa, EVP and co-founder of Ice Energy, who said, "These technologies have the potential to be more valuable together than any single one of them alone, and that's what this project sets out to demonstrate."  The project will demonstrate the cost-effectiveness of combined solar-storage integration on commercial buildings for peak demand reduction.

"As the sun begins to set in the afternoon, the Ice Bear units will deliver stored energy to bridge the gap between increasing building electrical demand and decreasing solar energy production," Tropsa explained. "The project will demonstrate that the combination of solar and ice storage will significantly reduce a building's peak demand charge, saving money for the consumer and helping the environment by reducing the need for utilities to dispatch fossil fuel-fired peaking generators. The bonus is the Ice Bear storage units are recharged during the off-peak hours, absorbing wind and surplus low-cost baseload generation."

Tropsa said, "The commercial properties are very repeatable in their load shape. The box retailers are incredibly predictable.  Whether it be fans, motors, cash registers or people -- the load shapes are very repeatable," adding, "The one space that's not repeatable is residential."

I spoke with Julie Bluden at SunPower about the grant.  She expressed SunPower's corporate interest in understanding, "What are the consequences of adding storage to a rooftop?"

It's not SunPower's first look at combining solar power and energy storage.  "We have worked on the Lanai 1.5 megawatt battery storage project," said Blunden.  She added, "This is the perfect experiment to assess different types of storage."  Ice Energy uses ice as storage, ZBB is a flow battery, and Xtreme Power is a battery system.

"This is an important step in understanding the economic effects of storage, and an extremely useful step for understanding the commercial and industrial customer's storage requirements."

Blunden spoke about energy storage and variable generation resources.  With "the low levels of [solar and wind] penetration in the western grid, ancillary services will continue to manage variable generation," said Blunden, citing an LBNL report on the ability of robust grid networks to withstand variable generation.

Blunden pointed out that photovoltaics and variable generation can reach enormous penetration levels and exist on a grid without storage.  She cited the 7 gigawatts of variable resources on a 70-gigawatt system in Germany and 3 gigawatts of renewables on a sunny day in Spain. She said, "We have the data -- it's just in the EU."

NEA-funded Solar Storage is a startup, still in stealth, with some interest in this area, as well.