We last discussed the economics of energy storage nearly two years ago. A lot has changed since then, including Wake Electric’s residential “time of use” rate and the recent introduction of Tesla’s new Powerwall 2.
Also since that time, Wake Electric has installed a prototype 8.6 kWh energy storage system with solar at our Wake Forest office. We have already learned a lot from the prototype (photo below). We have also ordered a Tesla Powerwall 2 to evaluate in a residential application.
Wake Electric’s “time of use” residential rate has an on-peak rate of 40 cents per kWh for 2 hours per weekday which is 5 times the off-peak rate of 8 cents for the rest of the day. Using energy storage to “time shift” off-peak energy to on-peak energy increases the retail value by 32 cents per kWh.
Of course, it costs something to store the energy, even for a few hours. With the new Tesla Powerwall 2’s advertised storage capacity of 14 kWh at a cost of $5,500, the initial investment to store a kWh of energy is about $400. Assuming a life of 2,500 charge/discharge cycles (about a ten year life) gives you 2,500 cycles to recoup the cost. So, $400 divided by 2,500 cycles is about 16 cents per kWh.
While energy storage economics can work with or without solar, energy storage can solve solar power’s two big limiting factors: the mismatch between solar power’s midday peak and when folks use electricity the most (early morning in winter and late afternoon in summer) and solar intermittency on a partly-cloudy day.
We think the declining costs of energy storage, with or without solar, will make this technology a compelling addition to a typical residential electric power system.
Questions about energy storage economics? Suggestions for future topics? Please contact us at firstname.lastname@example.org.