For 100 years, most decisions about the U.S. electric grid have been made at the top by electric utilities, public regulators, and grid operators. That era has ended. Small-scale solar has provided one-fifth of new power plant capacity in each of the last four quarters, and over 10 percent in the past five years. One in 5 new California customers of the nation’s largest residential solar company are adding energy storage to their solar arrays. Economic defection––when electricity customers produce most of their own electricity––is not only possible, but rapidly becoming cost-effective. As the flow of power on the grid has shifted one-way to two-way, so has the power to shape the electric grid’s future.

1. R E V E R S E P O W E R F L O W
H O W S O L A R + B AT T E R I E S S H I F T E L E C T R I C G R I D D E C I S I O N
M A K I N G F R O M U T I L I T I E S T O C O N S U M E R S
John Farrell
July 18, 2018
Credit: (solar house) energymatters.com.au (CC 2.0); (sign) modified from Flickr user InertiaCreeps

2. P O L L : W H E N WA S N E T
M E T E R I N G F I R S T U S E D ?
A) 1968
B) 1972
C) 1979
D)1985
E) 1993

3. 1 9 7 9
Steven Strong

4. S U R P R I S E !
Utilities are just as prepared today

5. S T O R A G E I S H E R E

6. SURGE IN RESIDENTIAL ENERGY STORAGE
Source: U.S. Energy Storage Monitor, Q2 2018
ResidentialEnergyStorages
Deployments(MWh)
0
5
10
15
20
25
30
35
40
Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018

7. WHERE SOLAR+STORAGE WORKS NOW
90%
52%
80%
14%
71%
16%
49%
25%
27%
23%
Percent of residential customers with solar+storage cheaper than the average utility revenue per kilowatt-hour
10-25% 25-50%
50-75% 75% or
more
CT 77%
70%
MA 51%
MD 45%
NH 70%
ME 17%
NJ 57%
RI 80%
VT 73%
Percent of residential electricity customers
Solar+storage at 14.6¢ in St. Louis
DC 0%
DE 0%
2016 prices

8. B R O A D O P P O R T U N I T Y T O AV O I D
D E M A N D C H A R G E S

9. R A P I D LY FA L L I N G B AT T E RY C O S T S
$ per megawatt-hour
$0 $175 $350 $525 $700
Source: Lazard Levelized Cost of Storage Analysis (2015, 2016, 2017)
Lithium-ion Battery
for Peaker
Replacement
2015
2016
2017

10. B AT T E RY P R I C E F O R E C A S T S
Source: Bloomberg New Energy Finance

11. P O L L : A R E B AT T E R I E S G E T T I N G
C H E A P E R T H A N F O R E C A S T ?
A)Yes
B) No

12. Actual
P R I C E D E C L I N E S O U T S T R I P P R O J E C T I O N S

13. WHERE SOLAR+STORAGE WORKS SOON
0%
0%
90%
71%
85%
58%
46%
54%
3%
40%
55%
84%
69%
75%
75%
49%
36%
71% 20%
8%
10% 28%
34%
60%
24%
3%
11%
32% 66%
52%
55%
2%
16%
3%
0%
41%
2%
40%
63%
Percent of residential customers with solar+storage cheaper than the average utility revenue per kilowatt-hour
25-50%
50-75% 75% or
more10-25%
Percent of residential electricity customers
CT 78%
MA 56%
MD 71%
NH 71%
ME 73%
NJ 79%
RI 81%
VT 81%
70%
Solar+storage at 11.7¢ in St. Louis
DE 3%
DC 0%
45%
2022 prices

14. A N I N A D V E R T E N T
T R I P L E T H R E AT

15. A N
I N A D V E R T E N T
T R I P L E T H R E AT
F R O M
D I S T R I B U T E D
S O L A R + S T O R A G E
More valuable
FasterIndependent

16. 1
G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N
3¢ 3¢ 4¢
Approximate cost of energy if ultimate
customer pays 10¢ per kilowatt-hour
+ +
Energy has more value the closer it is produced to home

17. 1 I N S TA L L E V E RY
6 0 S E C O N D S
2

18. P O L L : H O W M A N Y N E T M E T E R E D
S O L A R A R R AY S I N C A L I F. ?
A) 25,000
B) 250,000
C) 450,000
D) 830,000
E)1,200,000

19. 3
800,000
customer-
planned
power plants

20. A N I N A D V E R T E N T
T R I P L E T H R E AT
I M P L I C AT I O N S

21. D I A B L O C A N Y O N
Credit: ”Mike” Michael L. Baird
Closing due to stagnant sales, competitive renewables

22. AFFORDABLE REPLACEMENT POWER
The per-kilowatt-hour cost for supplying the equivalent of 100% or
more of retail sales from wind and sun alone
Sources: wind and solar (ILSR, Level10, Berkeley
Labs); Nuclear plant economics (Bloomberg—
https://bloom.bg/2IpvJtv)
2 0 1 7 - 1 8 P R I C E S
Nuclear power plant with marginal economics
1 to 2¢ per kWh
2 to 3¢ per kWh
3 to 4¢ per kWh
4 to 5¢ per kWh
COST OF 100% WIND AND SOLAR
More than a 10% price premium

23. P U E N T E G A S
P L A N T

24. R E G U L AT O R S VA S T LY O V E R S TAT E C O S T
O F L O C A L A LT E R N AT I V E S

25. S O L A R U N D E R C U T S P E A K I N G G A S
P L A N T S
Solar PV — Rooftop C&I
Solar PV — Crystalline Utility-Scale
Gas Peaking
$ per megawatt-hour
0 75 150 225 300
Source: Lazard LCOE, November 2015
$109 $193
$58 $70
$165 $218
Inexpensive solar +

26. $0
$50
$100
$150
$200
$250
2016 2017 2018 2019 2020
Source: Kittner, et al. Energy storage deployment and innovation for the clean energy transition
F O R E C A S T E D B AT T E RY PA C K P R I C E S
W I T H T W O - FA C T O R L E A R N I N G M O D E L
$ per kilowatt-hour of capacity
Inexpensive solar + inexpensive batteries =

27. PLANNED GAS PEAKERS IN TROUBLE
395
939
2700
34
80
260 300
40
90
6031
171
250
93
9
Nearly 10 gigawatts of planned gas peaking power plants are in states with competitive solar + storage
CT9 0
MA5 2 5
190
NJ4 3 4
CT9 0
Megawatts of planned gas peakers
300
277
PV insolation:
http://bit.ly/2pwou7C (NREL, 2012)
Power plants: http://bit.ly/2DZDm2N
(EIA, 2018)
Places where regulators have
halted gas peaker deployment
States with a similar solar
resource

28. ILSR modeled a
peaking plant
alternative to
shaving entire 1-
hour super peak
window: 271 MW
and ~271 MWh
P E A K I N G P O W E R P L A N T A LT E R N AT I V E

29. 0
50
100
150
200
250
300
4pm 5pm 6pm 7pm 8pm
P E A K I N G P O W E R P L A N T A LT E R N AT I V E
Megawatts
Using demand response, solar, and storage in place of a peaking plant
11 MW Demand response
292 MW Solar
230 MW Batteries
271 MW peak demand

30. L O C A L A LT E R N AT I V E G O O D F O R
L O C A L E C O N O M Y

31. R E V E R S I N G T H E P O W E R
F L O W

33. B O N F I R E O F R I S K Y
S P E N D I N G ?

35. B O N F I R E O F R I S K Y S P E N D I N G ?
0 gigawatts
15 gigawatts
30 gigawatts
45 gigawatts
60 gigawatts
Planned
retirements of
nuclear, gas, and
coal
Planned gas
power plant
capacity additions
Source: Energy Information Administration
In the next 4 years…

36. S O L A R + S T O R A G E P R E S E N T S S T I F F
C O M P E T I T I O N F O R G A S
$0 $20 $40 $60 $80
$ per megawatt-hour
Sources: Lazard LCOE, November 2017; Utility Dive
Gas combined cycle
price range
Solar+storage bids
to Xcel Colorado

37. RECENT GAS PEAKERS IN TROUBLE
3262
5
18
40
520
47
129
37
35
87
24
42 79
2
2055
235
20
60
6 147
5
9
Over 5 gigawatts of recently built gas peaking power plants are in states with competitive solar + storage
Places where regulators have
halted gas peaker deployment
States with a similar solar
resource
CT9 0
MA1 5
564
NJ6 3
CT9 0
Megawatts of recently built gas peakers
16
148
Power plants: http://bit.ly/2DZDm2N
(EIA, 2013-18)
PV insolation:
http://bit.ly/2pwou7C (NREL, 2012)
143
1644
MD1 2 9

38. U T I L I T I E S R E S P O N D
I N C O N S I S T E N T LY

39. DC
AK HI
Source: The 50 States of Solar: Q1 2016, NC Clean Energy Technology
- Q1 2016 action
- No recent action
D I S T R I B U T E D G E N E R AT I O N
U N D E R F I R E
1 Lobbying against distributed generation

40. Blue Wing Solar Project, San Antonio; Credit: Duke Energy
2 Building utility-scale renewables

41. T O T H E O W N E R , T H E S P O I L S
$0
$5,000
$10,000
$15,000
$20,000
Tucson Electric Power customer AZ Public Service customer
$19,400
$14,900
$5,600
$6,800
Utility-owned Customer-owned
25-year net benefit to the customer of utility-owned v. customer-owned solar
$13,800
utility
benefit
$8,100
utility
benefit
3 Building utility-owned distributed generation

42. N E E D E D R U L E S

43. C A P T U R E T H E S E VA L U E S T R E A M S

44. A S A M P L E 4 R U L E S F O R C A P T U R I N G
VA L U E O F E N E R G Y D E M O C R A C Y
•State regulators: Issue a moratorium on new gas
power plants
•Regional markets: Lower thresholds for distributed
energy resource aggregation
•State legislators: Adopt “A” level interconnection
rules
•Local officials: procure energy storage for public
buildings and simplify permitting for distributed
energy

45. www.ilsr.org
C H A N G I N G
T H E R U L E S
P R O V I D I N G
T O O L S
1 0 0 % R E N E WA B L E
L O C A L E C O N O M Y
H U M A N
S C A L E
L O C A L
O W N E R S H I P
D E M O C R AT I C
A U T H O R I T Y
I L L U S T R AT I N G
T H E V I S I O N

46. www.ilsr.org
R E A D M O R E
@johnffarrell
F O L L O W
S H A R E