Dive Brief:
- Duke Energy's renewables unit announced this week that its subsidiary REC Solar will offer energy storage with its commercial solar offerings in the Southern California and Hawaii markets.
- Duke said it would partner with storage provider Green Charge Networks and energy management software provider Phoenix Energy Technologies on the offering. Nothing about the scale of the companies’ plans has been made public.
- In the offering, solar generation will be stored by lithium-ion battery systems during off-peak hours when electricity prices are lower, with the stored solar energy used during peak demand hours when electricity is more expensive.
Dive Insight:
When Duke Energy, one of the biggest U.S. electricity providers, purchased its controlling interest in REC Solar, one of the biggest U.S. commercial solar developers, it created a $225 million fund for commercial scale solar development.
With the federal investment tax credit for commercial solar expected to revert from 30% to 10% at the end of 2016, solar companies will need “scale and reach” to succeed, REC Solar CEO Al Bucknam told Utility Dive in February. Duke’s strong balance sheet and deal access gives REC Solar the scale it needs to cover the entire U.S. market, to procure effectively, and to develop more standardized, lower cost construction processes.
“A low cost position is going to be a critical advantage,” Bucknam explained. “The traditionally difficult front end process of getting a project financed is now going to be much smoother and cleaner.”
The cost savings associated with storage is expected to add to the value proposition of commercial solar. Giving commercial-industrial customers the ability to use onsite generation during their peak demand periods can help lower the demand charges that typically compose as much as half their electricity costs.
