Tim Kelley, director of renewable and storage solutions at Russelectric, highlights the benefits of turning a solar energy system into a microgrid.
An estimated 9 – 10 GW, representing 100,000 commercial solar energy systems, were installed in the US between 2010 and 2017. This is derived from Solar Energy Industries Association data, and the average size of a commercial solar system in California.
These systems present multiple benefits to the businesses they serve, but one is not being exploited to its full potential.
The three benefits of solar energy systems
Installing a solar system can provide three benefits; the first is a reduction in the cost of energy by generating electricity at a lower cost than the utility.
The second is sustainability, as there are no emissions or greenhouse gases associated with producing electricity from the sun.
The third benefit, which in most cases has yet to be realized, is the provision of backup power. After recent hurricanes, such as Sandy, the owners of many facilities were surprised to realize that their solar systems did not provide power during grid outages. Virtually all existing commercial solar energy systems are designed to perform this way.
An inverter normally shuts down solar systems if the grid goes down and only allows them to turn back on when grid power has returned and is stable. This is a safety precaution; the utility cannot risk power being fed into the grid while workers repair it.
Leveraging solar energy systems for business continuity
It is possible to convert an existing solar system into a microgrid, allowing it to disconnect from the main grid and power a commercial facility’s load during an outage.
To achieve this, battery storage or traditional emergency generation, such as a diesel generator, is required to offset the intermittency of solar power. Also required is a distributed energy or microgrid control system to coordinate and optimize the facility’s demands and generation.
For facilities with existing backup generation and solar energy systems, it is relatively easy to upgrade system controls and integrate the existing solar system into a microgrid.
With the declining prices of battery storage, and control systems like the ones Russelectric have been making for the past 50 years, it is possible to achieve the third benefit of solar energy systems.
There are four factors to consider when converting a solar energy system to a microgrid.
First, it is common for a third party to finance and own an existing solar system, and sell the electricity generated back to the facility owner at a price lower than its utility rate.
In these situations, the respective owners will have to modify their existing agreement to reflect the changes to the original system. In cases where the facility owner also owns the solar system, having a single stakeholder simplifies the decision-making.
Interconnection and metering agreements
Second, the system owner or system integrator should check the existing utility interconnection and net metering agreements, and ensure that changes to the solar energy system will be permitted.
Return on investment
The third factor is calculating the payback, or return on investment. Adding business continuity functionality to a facility is like buying insurance, the value of which varies by company. Industrial manufacturers, data centers, and office parks will all have differing requirements.
For example, if a dairy processing facility pasteurizing raw milk loses power for longer than 30 – 60 seconds, it may have to discard the milk being processed and perform a full shutdown and sterilization of its production line. A data center typically cannot allow any downtime, whereas a commercial office park might place less value on business continuity.
The unique magnitude of the value can be self-diagnosed. Key questions to ask are: How long does my business need to continue operating if the grid is lost and what is the value of that continued uptime? Is it 15 minutes to carry out a controlled shut down, or is it multiple hours or days to continue production? This consideration impacts the size, complexity, and cost of the microgrid.
Most solar energy systems were originally justified because they allow the user to avoid higher cost utility supplied power. Part of working out the payback of converting a solar energy system to a microgrid involves revisiting these original financial assumptions.
Solar energy is generated during the day, when the cost of electricity is historically the highest. But in some states, like California, the huge amount of installed solar generation is reversing the trend. The utilities are starting to adjust rates to shift the peak period to the evening, when solar does not generate.
This is another good reason to consider adding energy storage. In addition, to providing power during an outage, it can be charged up during the day and released in the evening, when the sun is not shining, but electricity prices are high.
Reducing the use of thermal backup generation
Assuming the facility has thermal backup generation, a fourth potential benefit is the reduction of its use. This means less spent on fuel, fewer emissions, and avoidance of potential penalties for exceeding emissions limits.
Additionally, despite fuel supply contracts guaranteeing fuel replenishment for emergency generators, in a severe natural disaster this may not be possible. A solar system depends only on sunshine, providing additional security of power supply in an emergency.
Turning your existing solar energy system to a microgrid can unlock cost and resilience benefits. This is low hanging fruit for commercial or industrial facilities that already have solar energy systems and other onsite power generation, with some distributed energy control systems in place.
Tim Kelley is the director of renewable and storage solutions at RussElectric.