National Labs Examine How Solar+Storage Could Help Cut Demand Charges

Researchers from the Lawrence Berkeley National Laboratory (Berkeley Lab) and the National Renewable Energy Laboratory (NREL) have released a new report that estimates demand charge savings from solar and battery storage systems co-deployed in commercial buildings. The report follows two previous studies that examined demand charge savings from solar on a stand-alone basis for residential and commercial customers.

Demand charges, which are based on a customer’s maximum demand in kilowatts (kW), are a common element of electricity rate structures for commercial customers. The researchers say the earlier analyses showed that solar alone has limited ability to reduce demand charges, depending on the specific design of the demand charge and on the shape of the customer’s load profile. This latest analysis seeks to assess the incremental demand reductions from adding behind-the-meter storage in conjunction with solar. To do so, the study estimates demand charge savings from solar+storage systems based on simulations across a large number of commercial building types and locations, over a multi-year period, with varying solar and storage system sizes and a range of demand charge designs.

Schematic illustrating the complementary roles of solar and storage for managing customer demand charges. In this example, the demand reduction from both technologies together (the bottom figure) is greater than the sum of what each would achieve on its own.

According to the national lab researchers, key findings from this analysis include the following:

Solar+storage exhibit consistent synergies for demand charge management. In nearly every simulation, solar+storage co-deployed in commercial buildings results in a greater demand reduction than the sum of what each would achieve alone. The greatest synergies occur for buildings with broad daytime peak loads that extend into early morning and/or evening hours (as shown in the schematic above) and for locations with a high degree of intermittent cloud cover where storage can buffer transient drops in solar production. The researchers say the strongest solar+storage synergies in their analysis were found for hospitals and office buildings, and for most building types in Miami, though these are not necessarily the cases with the greatest absolute level of demand reduction.

Demand reductions from solar+storage are highly customer-specific. Demand reductions from solar+storage systems vary substantially from customer to customer, depending on commercial building type and location. The greatest demand reductions tend to occur for buildings with relatively narrow afternoon peak loads and in locations with the most consistent sunshine. These are the same conditions in which solar, on a stand-alone basis, tends to yield the greatest demand reductions, though the reductions may be considerably greater with the addition of storage.

Demand charge reductions from solar+storage depend on demand charge design. Solar+storage systems yield greater demand reductions under demand charge designs that are based on pre-defined peak periods; this is in contrast to the more typical “non-coincident” demand charge design that is based on the customer’s maximum demand at any point over the course of the month. Separate from that design issue, demand charge reductions from solar+storage also tend to be greater for demand charge designs where billing demand is measured over relatively short (e.g., 15-minute or 30-minute) intervals.

The principal report, “Solar + Storage Synergies for Managing Commercial-Customer Demand Charges,” is published in slide deck form and accompanied by a written executive summary. Both documents can be downloaded here. In addition, highlights of this work will be presented through a webinar on Nov. 8, and registration is available here.

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