Turning On Batteries for Resilient Homes and a Cleaner Grid | Article

Isaac Ellis is a lifelong environmental advocate who used to install solar panels in his youth. As an architect who advocates for net-zero building designs, he wanted his own home to embody his ideals, so he added solar panels and energy efficiency measures to his house in Glenwood Springs, Colorado. In 2021, Ellis worked with his local utility, Holy Cross Energy, to add battery storage to his house so that he could have a reliable source of backup power when the electricity goes out.

Extreme weather events that are becoming more frequent and intense because of climate change, such as winter storms and wildfires, can cause extensive and prolonged power grid failures. These increasingly frequent blackouts are upending people’s lives, igniting reliability and resilience concerns, and damaging local economies. According to the U.S. Energy Information Administration, Americans experience, on average, eight hours of power outages annually, almost triple the frequency from eight years ago.

As battery storage costs fall, utilities across the country are looking to these devices to store solar and wind energy as backup power sources. Increasingly, utilities use distributed battery packs located at the point of energy consumption (behind the meter) to replace energy from fossil fuels, particularly during peak energy consumption times.

Holy Cross Energy, a rural electric cooperative based in Glenwood Springs that serves about 43,000 customers, is betting on battery storage devices to help them become more resilient to the climate crisis and reach their clean energy goals. In spring 2021, the co-op launched the Power+ program, an innovative financing program that helps electric co-op members finance distributed stand-alone battery storage devices. EESI helped develop the program through its on-bill financing initiative. There are no upfront costs for participants, and their repayments are tied to their meters (this is known as tariff-based on-bill financing) and conveniently paid over 10 years through their utility bills.

So far, the program has financed 111 battery packs worth over $1 million and distributed across 26 residential locations. By leveraging $11 million in zero-percent loan capital from the U.S. Department of Agriculture's Rural Energy Savings Program (RESP), Holy Cross Energy can offer affordable energy storage investments for participants.

Moving to Clean Energy While Keeping the Lights On

Installing grid-integrated batteries through its Power+ program helps move Holy Cross towards its goal of achieving 100 percent renewable energy by 2030 and reaching net-zero emissions by 2035. Currently, 47 percent of the utility’s energy comes from renewable sources.

“Power+ allows us to bring resilience to our participating members and, with our control of these distributed devices, we are able to bring system-wide benefits that can be shared by our entire membership,” Lisa Reed, Holy Cross Energy's energy programs manager, said. “We can save on our power supply costs, reduce our demand curve, eliminate the need for system upgrades due to increased peak requirements, and it helps us in our journey to 100 percent.”

Tesla battery packs. Photo Credit: Holy Cross Energy

Power+ started as a pilot program in 2020, allowing Holy Cross Energy to experiment with different battery configurations before launching a full program. In the pilot, the co-op started out by financing three battery packs per site but, in the process, discovered that financing five Tesla Powerwalls (5 kWh each) per site created larger economies of scale and savings. This is because the labor costs involved in installing the packs and performing electrical panel upgrades to the home are fixed, regardless of how many batteries are installed. When only three battery packs are installed, they can only store enough power to run certain items such as lights and electrical appliances.

“Because we are located in a wildfire-prone area, using batteries for resilience is what is driving members to this program and how the program benefits the whole membership both economically and environmentally,” Reed said. “Right now, we have 40 homes in the program pipeline, which means there are more than $2 million in battery storage investments in the queue for installation. Our contractors are fully booked for more than nine months, which speaks to the successfulness of the program.”

When Ellis heard about the Power+ program, he immediately signed up. He had five battery packs professionally installed by utility-vetted contractors.

“We are very happy with the batteries as we have days and days of autonomy given the pack’s large capacity if the power goes out due to a severe weather event,” Ellis said. “The process for the batteries to connect on is quite easy: we receive a notification from an application about a power outage and within seconds the battery packs automatically switch on. Everything is so fast, most of the time we do not even feel the power outage—the batteries are quickly providing power to the critical loads in the house.”

Making Batteries Work for Both the Co-op and its Customers

As utilities like Holy Cross work to transition to a clean energy economy and rely increasingly on intermittent renewable energy, the challenge comes in managing energy demand rather than supply. Batteries and the Power+ program help manage demand for the co-op by playing a dual role: as energy storage to soak up surplus renewable energy during peak production periods and as a distributed energy resource (DER) technology that helps reduce electricity consumption when demand for energy from fossil fuel plants is high.

The batteries can be charged when there is surplus renewable energy on the grid, such as midday for solar and at night for wind, and then that stored power can be dispatched during peak demand times. This allows Holy Cross to save both energy and money. Holy Cross Energy passes along the monetary savings to Power+ participants through an energy credit on their utility bills, which in part helps to repay the cost of the five battery packs.

Holy Cross Energy partnered with Tesla to offer the Powerwall battery packs to its members and provide them with Tesla-certified contractors to install the devices. The co-op pays the contractor for labor and installation while retaining control and ownership of the batteries for 10 years, at which point ownership transfers to the participant. The five battery packs cost $50,000, including labor, electric control panels, inverters, and system upgrades. After utility incentives, repayments break down to 120 payments of $312 per month, or $37,500 to pay in 10 years. For the right to control the battery during peak demand times, the co-op offers participant's $257 in monthly benefits, meaning participants only actually pay about $55 a month. The batteries themselves, as well as the inverter, control devices, and a self-card, are located behind a gateway panel. The self-card is how the participant interfaces through an app with the co-op and receives alerts regarding discharging events.

Co-op members start the application process for the battery packs on the Power+ website. Once registered, the member provides a self-assessment form that includes pictures of the energy meter, panels, and information about large loads in the house like AC and heating, which the batteries would backup. If the application is satisfactory, the co-op pulls meter data for the location to see how much energy is used on a monthly basis as well as utility bill-paying history for the prior 12 months. To increase equity and expand program access, Holy Cross Energy does not use credit scores to screen participants; instead, it looks at whether bills were paid on time, which is a good indicator of reliable repayment.

Once the member is approved, a site visit is performed to check energy loads in the house and identify the location where the batteries will be installed. The site visit generates an individual quote and a contract for the member. The packs are then installed by certified and vetted contractors. Finally, the repayment is included in the participant’s monthly utility bill.

“For us, a co-op, reaching 80 percent renewable energy capacity is feasible with existing and new solar energy projects,” said Reed. “However, the trick is getting that last 20 percent, without needing the baseload capacity that fossil-power plants provide. To get to that goal, we need to deploy distributed battery storage technology throughout our service territory to firm up the grid and provide ancillary and baseload services. The Power+ is a key program to help us get to 100 percent renewable energy.”

Author: Miguel Yañez-Barnuevo