The case for distributed solar with storage

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Solar-plus-storage systems translate into multiple benefits for rooftop, mini-/micro-grid, and standalone off-grid segments. Consumers can save on their utility bills. A solar system with battery storage adds to home value. A 3-10kW solar system with 5kWh battery size may cost INR 1.5-5 lakh or more and reduce consumers’ power bills by at least 50%. 

Consumers can run their appliances when they want, not when electric companies tell them. With a solar system plus a home battery, consumers are in control. Excess energy is stored in the home battery, and they can use it when they need it the most.

Net energy metering allows customers who generate their own electricity from solar panels to sell the excess electricity generated back to the grid or store it in the home battery.

However, in India, not all states have uniform net energy metering policies, and these policies vary state by state. The state regulators can explain and play a significant role in the uniform adoption of net energy metering policies for the individual state location as central and state incentives are available for going solar with home batteries.

Environmental and societal impact

People worldwide are now using solar energy + battery storage systems to push through power outages caused by grid failure, blackouts, storms and other natural disasters that can lead to loss of life and property. 

Events like floods, wildfires, hurricanes, rising sea levels, and hunger related to environmental damage have caused devastation worldwide. The costs associated with climate change are growing and include rising health care costs, destruction of property, increased food prices and more. 

Wide-scale adoption of solar with storage is the ultimate solution to address the adverse societal and economic impacts of dirty fossil fuels. 

Solar energy means clean and healthier air. Storage makes it 24×7. Solar+storage energy supports the planet that is clean and green by eliminating harmful toxic emissions from fossil fuels.

Solar+storage shall be a significant contributor to the economy. 

Large-scale deployment of solar with storage for distributed services, i.e., rooftop, standalone mini-grid systems and energization of 33/11 kV substations in rural areas will gainfully employ the community. Everybody benefits as these solar jobs cannot be outsourced.

Coal and natural gas are not free, and they are expensive and dirty. Their price is volatile too and has increased systematically over the past decade.

The solar energy cost has declined to INR 2/kWh in India, and so are the cost trends for utility-scale lithium-ion batteries. Upscaling subsidized prices even with higher financing costs for off-grid standalone systems, mini-grid systems and distributed solar generation with storage can supply 24×7 clean energy to all. 

A co-located PV plus storage plant will technically fit in an existing transmission network, provide grid stability, improve tail-end feeder voltage and eliminate accidental blackouts. Apart from that, all issues related to the permitting process, biology, water, noise, or any other possible environmental impact will disappear in execution. 

Scale of adoption

This concept can quickly spread all across the country for high-level penetration into the grid and will technically accommodate 200 GW solar energy in the grid. DSG with storage penetration at this level will transform India’s future energy resilience for its 2030 electricity roadmap and significantly replace all other formats of power generation.

Concurrently, the access to multilateral funding for the distributed solar generation with storage and smart grid functions will rationalize grid harmonization costs. 

Micro-grid solar systems, off-grid standalone solar power generating mini-grid systems, net-metered rooftop solar systems, and small-capacity (500 kW – 2MW) grid-tied distributed solar generation systems with 25% storage to be connected to the existing 33/11 kV substations are the key to achieving India’s mission of supplying clean energy at affordable cost, i.e., INR 3 – 3.5/kWh, to all. 

Solarization of all rural 33/11 kV substations by installing distributed solar generation systems with battery energy storage will ensure day-time power to the rural population, provide energy security, eliminate transmission losses, and generate huge employment.

Pairing with electric vehicles

The good news is that residential solar systems can power electric vehicles. Consumers can use clean power from the sun to fuel their car, and run their home appliances. 

The potential of energy storage systems combined with PV panels for electric vehicles represents a step towards sustainable mobility, and the same is verified with a combined heat and power system. 

Economic advantages

Using energy storage systems in combination with solar PV systems reduces the electricity costs by increasing the self-consumption of self-generated PV energy by 15-25% points with a 0.5–1kWh energy storage system per installed kW of PV power. With the rapid decline in costs, batteries can increase self-consumption to 20–50% in the near time. 

The economics of ESS in distributed solar generation and residential buildings has been advocated by several experts in various publications that typically consider the levelized cost of electricity (LCOE) as the main indicator. 

Input parameters for batteries are characterized by a great uncertainty. LCOE changes as a function of application and technology (lead-acid, lithium-ion, sodium sulphur, vanadium redox-flow batteries). Energy storage could be used for utility energy time-shift, transmission and distribution investment deferral, energy management at community scale, increase of self-consumption, grid harmonization and frequency regulation, and support of voltage regulation. Considering all these applications, the technology is in a dominant position now. 

The value of the distributed solar PV is increased by the utilization of ESS and load control. Their combination is also called “Solar Plus”. A case study shows that an 8 kW PV facility coupled with a 7.8 kWh battery presents a profitable residential and commercial application model under net metering regulations. The integrated system is profitable with PV plant cost varying between INR 40,000/kW and INR 45,000/kW and battery cost between INR 20,000/kWh and INR 50,000/kWh. 

Grid-scale batteries will play a crucial role as solar energy penetration into the Indian grid increases over time. Attempts are required to project future capital costs of BESS and encourage such solar + storage penetration at a large scale.

A study report by Lawrence Berkeley National Laboratory, as assigned by the Indian government, estimates the cost of grid-scale lithium-ion battery storage over time. The report projects the capital cost of a 1MW/4- MWh PV plant co-located BESS in India drop to $122/kWh by 2025 and $92/kWh by 2030, which is 46% and 59% lower than the current estimated capital cost. 

Recommendations

Radical changes are required in the tariff policy and Indian electricity rules to encourage large-scale penetration and deployment of solar with ESS systems in India and transform the energy sector. Germany and Australia are a role model to follow. 

Inputs by Gopal Lal Somani

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