COMPENSATION The Big Challenge Facing DGPV + Storage S torage systems are a beneficial and, arguably, a necessary part of future grid viability. Therefore, developers and consumers involved in the deployment of storage systems will need a standard method of compensation. Unfortunately, most compensation structures are not yet fully developed, don’t exist or don’t provide enough benefit to justify deploying an energy storage system. Here are two models currently in play that either focus on energy usage or energy power/capacity.
A PERFECT MATCH As DG solar deployment has grown, naturally so has the deployment of energy storage systems— the two complement each other. Standard Solar’s Vice President of Engineering C.J. Colavito shares some of the vital services storage adds to DG solar arrays: ENERGY ARBITRAGE Absorbing generation during less valuable hours and releasing it later, typically late afternoons and evenings during summertime. CAPACITY FIRMING Maintaining the maximum power output of a solar electricity system during specific hours in a year, i.e. allowing it to provide maximum power even when the sun isn’t shining. RAMP RATE CONTROL Addressing the inherent intermittency of solar energy, limiting the power ramp down as clouds pass over to eliminate issues like voltage flicker.
1 ENERGY USAGE COMPENSATION In this compensation model, system owners are compensated on the kilowatt-hours of energy they produce and hold. This arrangement is most common for power-purchase agreements (PPAs), and how many DG PV + storage deals are currently arranged. The benefit of this model is that the contractual familiarity of a PPA makes the transaction easy to understand and gives a sense of comfort to those involved. 2 POWER/CAPACITY COMPENSATION A more recent and less widely used method of compensation focuses on power or capacity
amount of relief the storage system provides the grid. When batteries are holding the power during low-cost times and discharging at high-cost times, there’s a cost savings involved, and the consumer of the power is compensated on that basis instead of the energy they produce. Capacity payments are most common in virtually net- metered projects, community solar projects and systems with dedicated service lines that feed directly back into the grid. Since capacity payments for DG PV + storage are relatively new, it causes some confusion among consumers and state officials alike. But as it becomes more common, it will likely be the best method for accurately depicting and compensating DG PV + storage on the grid.
instead of energy usage. Payment is based on the
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