Dive Brief:

• EnergyHub announced Wednesday that it has partnered with Vivint Solar to help utilities access attached residential battery storage systems as cost-effective grid-edge resources.
• EnergyHub now has almost two dozen distributed energy resource (DER) partners across assets including thermostats, batteries, solar inverters, electric charging equipment and water heaters. The company's Mercury DERMS platform allows utilities to offer customer incentives to manage the devices to balance distribution systems.
• The COVID-19 pandemic has slowed the growth of residential energy storage, but analysts say they expect delayed projects to be continued into 2021. According to Guidehouse Insights, a total of 172 MW of new behind-the-meter storage capacity is now expected in the United States in 2020, about 33% less than what was projected in 2019.

Dive Insight:

While the spread of the novel coronavirus has set back the installation of new battery storage systems, EnergyHub CEO Seth Frader Thompson says the long-term outlook remains strong and is being fueled by utilities offering customers significant incentives.

"We're seeing double-digit, month-over-month growth in the volume of customers and batteries participating in utility programs," Frader Thompson told Utility Dive, referring to enrollments in utility residential storage programs managed through EnergyHub's platform.

Data from the U.S. Energy Storage Association and Wood Mackenzie shows residential storage installations rose 10% in the first quarter of the year and set a new record for deployments. But due to economic impacts and social distancing related to COVID-19, they say residential growth declined as much as 40% from March to April.

However, that growth trend is expected to recover.

"The forecast for 2020 and beyond are subject to further changes due to the COVID-19 situation," Guidehouse Research Analyst Ricardo Rodriguez told Utility Dive. But he also said project developers and system integrators the firm interviewed "are confident they will continue with the projects in their pipelines."

"We will likely see a greater number of deployments than previously anticipated," Rodriguez said in an email. And COVID-19 could be a factor.

"Whenever we see any kind of disruption like this, whether caused by extreme weather/natural disasters or big blackouts, there is typically, following those events, greater demand for residential solar+storage," Rodriguez said. "Incentive programs are likely to play a key role in the adoption of the technology."

Those incentives for energy storage are a key to wider adoption and providing utilities with a valuable resource, according to Frader Thompson. 

"A larger and larger percentage of customers who are buying solar are getting batteries and attaching the battery to their solar system, and at the same time customers are increasingly enrolling those batteries in Bring Your Own Battery grid service programs," Frader Thompson said. 

The programs offered by utilities can provide participating customers with hundreds of dollars per kilowatt of capacity, said Frader Thompson. "We are starting to see utilities offer really meaningful incentives. ... You could be looking at $500 to $1,500 in customer incentives per year," he said.

Incentives are a key to growing battery storage adoption in the residential sector, said Rocky Mountain Institute Principal Mark Dyson.

"Without some upstream value from the utility getting passed along to customers hosting or owning batteries, it is really hard to make a business case for a homeowner," Dyson said. "They just don't pencil. We see increasing evidence programs like this can provide that."

Power reliability remains a factor as well, say experts.

"Beyond financial incentives, customers recognize that batteries enrolled in utility programs should still have capacity to get them back online in the event of an outage," Guidehouse Research Analyst Jessie Mehrhoff said. "Thus, the resiliency associated with batteries may add value to the customer proposition."

Deployments are also being helped by rapid reductions in battery costs.

"Every year the economics to the end-customer for the battery get better," said Frader Thompson. "Because utilities are willing to pay customers for access to the batteries, utilities are helping accelerate batteries."

Utilities are using EnergyHub's DER management system to avoid or delay costly system improvements and are "typically able to monetize them in a market, one way or another," Frader Thompson said. "That can come in the form of trading the energy on the wholesale market, reducing transmission charges, coincident peak charges ... and often there is a longer tail of other ancillary services you can use the battery for."

Those could be anything from frequency and voltage support to improving solar hosting capacity on specific parts of a utility grid.

"What the utility typically does is stack some number of those together and you end up with a total value to the grid," said Frader Thompson. "And then the utility makes a case for how they then can cost effectively funnel that money, instead of doing traditional wires and capital infrastructure invested directly into the network, how they can get the same effect and benefit for the grid as a partnership with their customer."

The inclusion of more DER devices in demand management programs provides utilities with a greater number of possible grid services, including load shifting, peak demand reduction and renewable balancing, said Mehrhoff.

"Together, storage and other DER assets can reduce strain on grid infrastructure and help extend the life of expensive equipment," Mehrhoff said, adding that utilities will likely continue to integrate a variety of DER asset types as part of their load management programs. Different assets can support a wider variety of grid services, "but can also provide a greater number of avenues for the utility to engage its residential customers."

"Partnerships like that between Vivint Solar and EnergyHub take advantage of each company’s core competency in a complementary way; this allows them, together, to offer utility clients a broader portfolio of solutions," Mehrhoff said.

The list of utilities utilizing EnergyHub's DER platform is growing and now numbers around 50, including Eversource, PSEG Long Island, Baltimore Gas & Electric, Salt River Project, Arizona Public Service and others. This latest partnership with Vivint Solar includes National Grid in Massachusetts, where customers can participate through their SolarEdge inverter.