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SolarCity using Tesla batteries, software to allow businesses to manage energy

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One of the biggest challenges to solar energy is what happens at night or on cloudy days when the sun is not shinning? The solution was to use an energy storage system, but until recently, that technology was not perfected. Now, there is a solution, at least for businesses and large electrical users.

A publicly-traded solar provider, SolarCity, announced Wednesday that it is using battery packs supplied by electric car manufacturer Tesla to allow business customers to store solar-generated energy. Then to manage that stored energy efficiently, SolarCity has developed a system called DemandLogic™ that that automates the discharge of the stored energy to optimize utility charges resulting in savings for customers.

The batteries offered by SolarCity are the same lithium-ion ones that power Tesla's electric vehicles, reconfigured for stationary use. SolarCity's chairman is Elon Musk, founder and CEO of Tesla Motors.

In its press release SolarCity reports that its storage systems are available to new solar power customers through 10-year service agreements including monthly payments, with no upfront cost required. SolarCity will customize the system size to make it possible for businesses to save money immediately by saving more on energy costs than they spend for the storage service.

Unlike load shifting approaches to demand management, this product requires no change in operations for the business and is fully automated. DemandLogic can also power IT functions, security systems, cash registers and other critical business systems during power outages. SolarCity analyzes each organization’s energy usage to design a storage system that can offset peak load and support high priority backup functions.

One of the biggest problems following natural disasters is that the electrical grid goes down even businesses that were not hit by the storm must close due to lack of electricity. They can’t run cash registers, and often suffer spoilage of food stored in coolers and freezers. If Exit lights and fire alarms are down, they can’t legally open.

This system could also help schools and other agencies get through a power outage and avoid food spoilage if the electricity shuts their coolers down. SolarCity has installed solar systems in many schools across the country already including 14 schools in Boulder, Colorado.

The utility grid is aging and outages are increasing. The U.S. experienced 679 major weather-related power outages between 2003 – 2012 and 7 of these were among the 10 costliest storms in American history.

This combination of solar panels, storage packs, and a computerized energy management system could solve that problem and prevent many businesses from losing revenue simply because the electricity is down. Those savings would be on top of any savings from grid charges, peak charges or other fees assessed by utilities. Businesses in areas prone to power outages should look very seriously at this.

At the same time, while overall electricity usage in the U.S. has increased only modestly since 2001—approximately 10 percent according to the U.S. Energy Information Administration—utility revenues have increased more than 50 percent in the same time period.

“Utilities have altered their rate structures such that demand charges are rising faster than overall energy rates, and businesses are bearing the bulk of those increases,” said Peter Rive, SolarCity’s chief technology officer and chief operations officer. “Time is money, but so are control and predictability. Our storage systems can give businesses the tools to address all three—delivering immediate savings, protection against escalating demand charges and optional, grid-independent backup power in case of outages.”

Business customers are bearing the brunt of this cost increase because they are hit with “peak energy charges” and other fees that boost utility revenues exponentially. Solar systems can help because the peak usually occurs during the day. This new system will extend solar’s benefits to periods when the sun does not shine.

SolarCity storage systems will initially be available in areas of California serviced by Pacific Gas & Electric and Southern California Edison, areas of Massachusetts serviced by NSTAR, and areas of Connecticut served by Connecticut Light & Power. If successful, it will likely be extended to other areas.

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