Five important factors when considering energy storage

December 1, 2014

Energy storage has firmly entered the mainstream as a means of making renewable energy more reliable and convenient as well as lowering electricity costs. A growing body of research suggests that storage is integral to the future of renewable energy, building efficiency and building operating cost, so design and construction decision makers can benefit from taking a closer look at energy cost-reducing storage solutions. Knowing what to look out for will make it easier for building owners to recognize when energy storage could be a boon for their facilities.

1. Understanding electricity rates
Though distributed energy storage is slowly becoming become a common feature, some energy storage technologies have been in implemented for decades. Prior to the solar boom, thermal energy storage was utilized as a means for shifting the burden of peak energy demand to hours of the day when power is less expensive, according to Fierce Energy. Most buildings have bell shaped demand curves due to HVAC loads that use chiller systems. This shifting load strategy has been effective for reducing daily energy costs since the 1980s, and has now gained new relevance as a means for storing and delivering energy collected by wind turbines. Today's electricity tariffs are complicated, so a clear understanding of these utility taxes is necessary.  Particularly in deregulated markets where suppliers like to over-simplify blended rates for comparison shopping.  This oversimplification obscures the savings potential of shifting demand to off peak times. Successful users of thermal energy storage understand how to find the value of reducing demand.

2. Do public policies support the adoption of energy storage technologies now and into the future?
Politics always weigh heavily on the industry and technological development, including the implementation of energy storage solutions. Thankfully, recent policy changes have been drafted to encourage the use of energy storage and make it easier for utilities to begin adopting the technology, said Forbes. California, for example, recently passed legislation that includes the deployment of energy storage as a requirement for utilities seeking compliance with state construction codes. Likewise, legislators in New York recently approved a $25 million fund for encouraging new energy storage research. Other policies in places such as Texas, California, New Hampshire, New York, Kentucky, Indiana, Hawaii, Florida plus Toronto and India offer incentives to companies that install thermal storage.

3. Watch out for startups that enter a crowded market
The developing renewable energy market has created a window for innovators to develop answers to the industry's problems and leverage those solutions in the form of a business venture. However, the size and rapid advancement of the market has made it difficult for any one company to stay in business. Many go bankrupt before their products can hit the market, while others are absorbed by bigger players just as they begin to build momentum. Given the rapid turnover for some renewable energy startups, building managers and designers are encouraged to trust in brands that have operated in the energy storage industry for a longer period of time.

4. Always remember, new technologies are a work in progress
While energy storage solutions like thermal storage have been implemented for several years, the vast majority of storage solutions are relatively new. It's no surprise, then, that many of these solutions suffer long term viability challenges. Companies depending on battery storage, for instance, must work to mitigate the fire risks that come with operating rooms full of lithium-ion cells. How long will these new systems last? What are their replacement costs and/or disposal requirements that must dealt with down the road? Building managers must implement their due diligence in researching the potential design flaws of the latest energy storage innovations. Failure to perform this research can result in higher operating costs, disappointing performance and shortened life cycle.

5. Investors continue to gain confidence
Forbes pointed out that while investors are typically slow to jump on new technology, the importance of renewable energy and distributed energy storage's proven past have helped encourage backers to support technological development. Clean Fleet Investors provided $5 million in funding for California energy storage company Stem last year, while B Asset Manager provided the company with another $100 million in 2014 while established companies such as CALMAC continue to thrive and improve performance. ESCOs (Energy Service Companies) use innovative financing methods to fund energy efficiency projects such as chiller system upgrades with thermal storage. Funding is much easier to find once a company can show results, though this can be a major challenge for new energy storage companies.  Data collected by Pike Research expects thermal to grow over the next five years, reaching $3.5 billion in annual installation revenues by 2020.