Three technologies are now converging that will shake up the fundamental nature of our energy industries and the broader U.S. economy. Rooftop solar electricity, on-site storage, and electric vehicles represent an innovation triangle with far-reaching impacts. Electric utilities are perfectly positioned to develop this trifecta, for the benefit of customers and the economy in general. Intelligent integration is the key to success.
Ample Rooftop Resource
According to the National Renewable Energy Laboratory, there is enough roof area in the U.S. to provide 39% of the nation’s electric power. Rooftops have one distinct advantage over utility-scale solar installations and wind farms. Rooftops are located very close to the loads they serve. Electrons generated on a building travel to the closest light fixture, motor or other device that needs them, often in the same building or neighborhood. Any excess energy then flows into the utility grid, again seeking the closest use and dramatically reducing the need to transmit the energy from far-flung coal plants.
Already, big-box stores such as Target, Wal-mart, Ikea, and Costco are aggressively loading their roofs with photovoltaic panels. Many homeowners are doing the same thing from as far north as Alaska and all the way down to southern Florida.
Unlike fossil fuel power plants, solar panels are well-suited to urban sites, because they generate no harmful emissions and don’t vibrate or make noise like wind machines. They have no moving parts. The only maintenance is an occasional cleaning. There are, though, two disadvantages of rooftop solar. One is the installation cost, although that has dropped dramatically and continues to fall. And, two, the fact that they only generate energy when the sun shines, an issue that can be addressed, in part, by storage. Overall, there are far more benefits than drawbacks to rooftop solar panels.
But no matter where it exists, solar energy creates one big concern for utilities. It’s the disconnect between the time of day when solar panels generate power and when consumer demand peaks later in the day. Daily demand for most utilities peaks in early evening when people traditionally return home from work or school. That’s also when the sun goes down. Because utilities can’t currently store electricity in large quantities, they must carefully anticipate demand and ensure an adequate supply. The late-day spike in demand is often satisfied with “peaker plants” and is generally far more costly than base load energy provided by large coal, nuclear or hydro generators. Traditionally, utilities average the cost of peaking into their residential electricity rates. That practice is changing as more utilities pass this cost on to consumers through time of use rates and demand charges.
Over the last several decades, utilities have attempted to complement electricity generation with controls on energy use. Demand response (DR) programs seek to reduce load during times of peak demand. Many DR programs focus on big energy users such as industrial facilities. However, residential and commercial buildings still make up a large block of the total electricity load. While homes and stores can’t be shut down entirely, there is often specific equipment, such as water heaters, pool pumps or air-conditioners, that can be turned off temporarily without much inconvenience to customers. Utilities have used DR programs for many years to complement their large base-generation power plants.
A more efficient way to even out the peaks and valleys of supply and demand is to use electric batteries for storage. Does storage mean customers can go “off-grid”? No, battery capacity is sufficient for only a day or two. Even truly “off-grid” homes almost always have fossil-fuel generators to supply electricity during winter months when solar energy is weak.
Considered too expensive just a few years ago, the huge increase in manufacturing capacity has reduced battery price and availability. Modern Lithium-ion batteries, very similar to those used in electric vehicles, computers, and smartphones, can now be used in homes. Residential batteries store up to 20 kWh, enough to supply an average household, which uses around 15 kWh per day. High-performance homes use much less, so battery power could last longer.
Batteries on Wheels
Electric vehicles could also be part of the solution to the renewable energy supply/demand dilemma in two important ways. First, vehicles are a flexible load. Like water heaters, they can be scheduled to draw power only when utility demand is low. This can be accomplished to some degree with a simple timer but is more effective when utilities control the charging based on grid needs. Second, the electricity stored in vehicle batteries could be drawn into a home or business or even sent back into the grid when needed. Imagine millions of vehicles providing backup power for a community during times of peak demand.
The benefits that electric vehicles provide to the grid are in addition to the benefits electric vehicle owners get from drivetrains that cost far less to operate and maintain than vehicles powered by internal combustion engines. One possibility is for utilities to enhance the advantages of electric vehicles through policies that encourage more people to buy them, such as preferential energy pricing models for EV charging or development of public charging stations.
The Impact on Air Pollution
The overall impact on air pollution of widespread EV use is complicated because the fuel used to generate electricity matters. In areas with cleaner grid power, electric vehicles dramatically reduce total air pollution. In areas still using mostly fossil fuels to generate electricity, electric vehicles may make pollution worse. While the tide is definitely flowing toward more clean energy in the U.S. grid, solar powered homes can jump-start the transition. By charging vehicles with on-site solar panels, owners slash their total carbon emissions even where grid power is dirty. Widespread adoption of zero energy and positive energy buildings along with zero carbon transportation will contribute greatly to meeting our climate goals.
The Role of Utilities
Electric utilities find themselves, sometimes unwillingly, at the center of this technology triangle. Utilities have existing relationships with customers. More importantly, they have large volumes of data on electricity usage. Those with more sophisticated metering, data collection and analysis can assist in understanding their customer’s end uses. Using real-time energy management, utilities should transform their distribution systems into two-way streets, to both supply and gather electricity. Intelligent leadership can engage these opportunities and guide their development in a way that benefits the utility, all their customers, and the climate.
Utilities have a unique opportunity to serve as trusted advisors, traffic regulators and energy banks for millions of distributed energy generators. This means engaging rooftop solar customers and electric vehicle owners as partners, rather than competitors or threats. Such a partnership would be mutually beneficial for utilities and non-solar customers, as well as for their solar and EV customers.
Many utilities have resisted distributed solar, but it’s unlikely they will prevent the nascent technological boom for much longer. The combination of centralized generation with an extensive transmission grid hasn’t changed much in the last 100 years. The interaction of renewable energy, on-site storage, and electric vehicles holds great promise for creating a cleaner, more efficient energy resource balance. The first to benefit from this new order will be forward-thinking utilities, building owners and consumers who adopt these practices now.