Resilience Hub + SES Expertise

SES is excited to have completed the successful installation and launch of the first privately owned resilience hub in Montgomery County at Hampshire Towers apartments. Equipped with state-of-the-art technology and resources, this hub was custom-designed with and for the local community. It will serve as a vital resource in times of need, providing essential support to residents and the surrounding community during emergencies and crises.

Hampshire Towers Resilience Hub includes electric HVAC systems, a 159 kW solar system, and 400 kWh of energy storage. During an emergency, resilience hubs are an essential resource. Hampshire Towers in Montgomery County Maryland is now a community-serving facility that can provide support to residents and the surrounding community, including the Red Cross, before, during, or after a natural disaster or emergency. Hampshire Towers will now be a central point for gathering, information sharing, accessing resources, supporting, and providing relief to first responders.

Five Key Components of Resilience Hubs

Financials and Incentives

The Montgomery County GreenBank provided a $4.5 million construction loan, Montgomery County DHCA contributed $6 million, and Hampshire Towers ownership contributed $9 million. The solar system offsets approximately $25,000 in energy costs annually and generates $5,000 in SREC revenue for Hampshire Towers. The solar PV system will mitigate 130 metric tons of greenhouse gas emissions per year and produce a positive net cash flow for the property that helps maintain the affordability of residents’ energy costs for years to come.

Environmental Impact:

The project will decrease natural gas use by 37,292 kWh/year and mitigate 138 metric tons of GHG emissions annually. It will also provide a total of $164,545 in savings per year from lower energy and maintenance expenses while improving the quality of life for the residents. We are proud to be at the forefront of developing sustainable, solar solutions for Montgomery County and beyond. Congratulations and heartfelt thanks to all our partners and stakeholders who made this milestone possible: Maryland Energy Administration, Sandy Spring Bank, Era Building Solutions, New York City Energy Efficiency Corporation, and the Montgomery County Department of Environmental Protection.

We extend special thanks to Hampshire Towers ownership, Orlo Properties, for their visionary leadership in embracing clean energy and their commitment to a sustainable future for all!

K&B True Value of Annapolis (https://kbtruevalue.com/) and Solar Energy Services (https://solarsaves.net/) of Millersville announced the commissioning of what they
believe is the first retail business in the City of Annapolis to become net-zero on electricity consumption. The 224-panel solar energy system, designed and installed by Solar Energy Services, Inc, will replace a 2012 installation that offset about 15% of the hardware store’s annual electricity consumption. Deciding to purchase this new system was a relatively easy decision for Jared Littmann, the owner of K&B True Value on Forest Drive in Annapolis.

Jared commented, “This solar system will offset our annual electricity consumption, saving over $18,000 per year for our business. The incentives have us recouping 64% of the investment in the first year, 100% of the investment by year seven, and then positive cash flow of $269,000 over the course of 25 years. In addition, this furthers our goal of environmental stewardship and responsibility.”

Because the business had invested in solar 10 years ago, Jared was familiar with the process and was already a believer in its value. At the time, in 2012, budget and technological limitations held K&B True Value back from pursuing a 100% offset, when Solar Energy Services installed their first system. However, advances in solar technology since then have made it relatively easy for K&B True Value to offset 100% of their energy without even filling the entire roof of the Annapolis store’s building.

Rick Peters, president of Solar Energy Services, shared that “Jared had the experience with solar and the forethought to plan for this investment, but other county businesses and nonprofits can do this too, with very accessible County-Sponsored financing through a vehicle called Property Assessed Clean Energy (PACE). This kind of project is within reach for many businesses in the region, thanks to advances in solar technology as well as financing mechanisms to help property owners fund their own solar energy projects.”

Based in Millersville, in North Anne Arundel County, Solar Energy Services designs and builds residential and small commercial projects throughout the DMV. Located on the Annapolis neck peninsula, K&B True Value has been the neighborhood hardware store for almost 50 years, since 1974.

On Tuesday June 28th, SES and K&B True Value will host a ribbon cutting to celebrate the commissioning of the new solar generation system. Annapolis Mayor Gavin Buckley, Anne Arundel County Executive Steuart Pittman and Councilwoman Lisa Rodvien, plus State Senator Sarah Elfreth and others will attend the 1 PM Tuesday (6/28/22) celebration of the achievement of these two local businesses.

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Building Owners – Your Time Has Come!

Deployment of both residential and large utility-scale solar systems has exploded in the last 10 years.  Much of that growth has been driven by policy and further sustained by scale and competition, which combine to continue bringing us cost reductions and technology advancements.  To provide some historical perspective on this, our installed costs today are 75-80% lower than 10 years ago, before any incentives are applied. 

With all that amazing progress, our industry still has not made similar inroads in the Commercial & Industrial (C&I) solar market.  Many believe that is about to change.  Washington, D.C. has led the way in this market segment with strong SRECs and a flexible rooftop Community Solar program that motivate building owners to monetize their rooftops.  Property owners enjoying these benefits include churches and non-profits who are going solar at a remarkable pace, despite their lack of tax liability.  Over the past several years, SES has installed more than 10MW of solar energy systems throughout the D.C. region, including several churches, apartment buildings and office/retail spaces.

Maryland has been noticing, learning from their neighbor that all this private investment in a cleaner and more reliable grid is something we should be incentivizing.  Increasingly over the last few years, Maryland has improved commercial solar economics with enhanced incentives, driving the urgency for property owners to act now to maximize their solar incentives.  Below is a quick summary of incentives and financing that exist for Maryland commercial property owners to act now on long term solar investments.

Tax Credits

• Federal Investment Tax Credit (26% until Dec 31, 22% in 2021, 10% in 2022)
• Maryland authorized a 2020 commercial storage tax credit to incentivize businesses to add energy storage to their solar investment

Grants from Maryland Energy Administration (MEA)

• MEA provides solar grants of up to $20,000 based upon system size
• MEA offers incentives for solar carports of up to $200,000

Production Incentives (SRECs)

In addition to the value of the energy produced, the system owner in Maryland also benefits from selling the environmental attributes of that clean energy in the form of solar renewable energy certificates (SRECs).  Legislation passed in 2019 in Maryland to increase the state’s clean energy goals has impacted the value of SRECs dramatically, further improving the economics for any system owner, regardless of tax appetite.

Financing

PACE (Property Assessed Clean Energy) is a program available in many Maryland counties to help property owners deploy energy improvements, even a new roof.  The loan is backed by the improvement and is paid back through a property tax assessment.  The return on the investment must exceed the loan payment to ensure positive cash flows for the building owner.  The financing is off-balance-sheet and does not require personal guarantees.  This underutilized program is a tremendous vehicle to make customer-owned energy investments with no out-of-pocket costs.

Solar Loans:  Solar has become one of the most reliable and predictable long-term investments around.  With projected annual returns for the building owner in the 10-20% range over 25 years, most banks are entirely comfortable loaning for commercial or residential solar projects.

PPA’s: Third-party entities will own and maintain solar systems for property owners, selling them the energy at a discount over the traditional supplier’s rate.  For commercial building and land owners, these Power Purchase Agreements (PPAs) typically require relatively large projects to provide the necessary economics.

Aside from all the benefits above, there are two more strong business cases for solar investments.  First, aside from the money savings, if you can fix a large portion of your energy expense by investing in solar, you’ve giving your CFO more control over future expenses while locking out price increases from the supplier for that energy.  Secondly, by investing in solar, you are able to show your customers, your employees, your prospects and your recruits that you are committed to clean energy.  In this day and age, there is a truckload of value right there.

So don’t wait another minute.  SES is using technology to conduct remote meetings and preliminary evaluations in order to get budgetary numbers to prospective customers very quickly.  We currently have availability for projects to be complete this calendar year, but let’s not wait another minute people – commercial contracts signed in 2020 get to realize the full 26% Federal Tax Credit and highest SREC values.

In other words…Sunshine’s a Wastin’!

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A 5-year payback for 25+ years of electricity?
That’s a no-brainer!

The year 2020 is the last year that commercial building owners can qualify for the 26% Federal tax credit and other solar incentives that, together, combine to offer an excellent return on investment.  Economics that work, speak for themselves.  In that spirit, let’s have a real-time, real-design, real-numbers, deep-dive into the solar conversation between SES and a Maryland business owner looking to decrease their utility costs.

The Status Quo…

The Solar Solution…

The Payback…

The questions from this building owner followed much the same track as most solar prospects: 

#1 = Economics: Is this good for my bottom line?  

#2 = Building Preservation: What risks are there to my building and/or daily operations?

#3 = Construction Process: Why SES and how long will it take?

E C O N O M I C S

Do I pay the whole amount upfront or are any of the incentives deducted first?

You are responsible for the $172,200 upfront cost upon contract execution.  Over 60% of the incentives are realized in YEAR 1 (tax credit, state grant, depreciation).  The remaining incentives (ongoing sale of SRECs and energy savings) recur throughout the 25-year warrantied life of the system (and beyond!).

How do I know I’m eligible for the Federal Tax Credit and 100% Year 1 equipment depreciation?

A quick phone call to your tax advisor will answer this.  Most for-profit businesses that owe Federal taxes have plenty of tax appetite, even if they carry some of the earned credits into future tax years.  In this case that is a $44,902 tax CREDIT (as opposed to the less valuable “tax deduction”).   NOTE:  2020 is the last year for a 26% credit – in 2021 it drops down to 22% and then 10% in 2022, but projects started in 2020 can carry the 26% credit into future tax years. 

What are SRECs?

SRECs = Solar Renewable Energy Certificates.  Their goal is to encourage building owner’s like yourself to invest in solar.  As per the legislated Renewable Portfolio Standard, each time any grid-tied solar system in Maryland (residential or commercial) generates 1MWhr of energy – the system owner earns  a tradable credit that is sold on a competitive SREC market.  Currently, an SREC in Maryland is worth $77 (or, 77% of the ACP – Alternative Compliance Payment, currently $100).  The 88.62kW system SES as designed for this car wash is slated to generate ~102 SRECs annually allowing the system owner to receive payment quarterly via an SREC aggregator such as Sol Systems in Washington DC.

Who buys my SRECs?

Ultimately, SRECs are purchased by electricity suppliers who are mandated by the State of Maryland (and various States throughout the US who have adopted the Renewable Portfolio Standard) to deliver a specific % of their energy from renewable sources.  They can do this in one or more of three ways:

1. Build their own renewable energy plants
2. Pay a fine (Alternative Compliance Payment currently at $100 per MWh here in MD)
3. Purchase SRECs from currently operating solar systems (currently $77 per MWh)

For many of these electricity suppliers, the most cost-effective path is to buy your SREC.  They do not buy your SREC directly from you – but through an SREC aggregator (broker).  SES’s preferred aggregator is Sol Systems – although we are happy to support you in contracting with the SREC broker of your choice (SES has no involvement in your SREC contract after the initial setup).

How do I apply for the Maryland State Grant?

SES takes care of the paperwork requiring only your signature.  Grants are usually received several months following the application.

Are there any loan products available?

PACE financing is an excellent vehicle for small/mid-sized commercial solar projects.  The solar asset is financed with private financing and is repaid through the property’s tax account (much like a sewer or road assessment).    Some of the many benefits include:  cash flow positive from day 1, loan is off-balance sheet, no personal guarantees, little or no out of pocket costs, and the solar system asset and any loan balance, simply transfers with sale of building.

D E S I G N

How does the solar energy work to reduce my utility bill?

Your solar system has 3 major components:  the solar panels, the panel racking , and your inverter(s) that are usually installed near your electric panel/utility meter.  Your solar panels will generate energy as the sun shines on them.  This energy (DC/Direct Current) flows to the inverter whose job it is to convert this incoming DC energy to AC (Alternating Current) which is fully accessible both by the utility grid as well as all of your building’s electrical infrastructure/appliances.  At any point in time the solar energy will be immediately offsetting your electricity consumption with any and all excess energy flowing to your BGE meter and essentially spinning it backwards, generating credits with the utility.  This function is known as Net-Metering and ensures you receive full credit for 100% of the solar generated by your system.  Any credits will be used up at nighttime or during winter/low sun.

I am concerned about the risk of leaks due to penetrations on my flat roof.  How do the solar panels attach?

The current design utilizes a no-penetration attachment technique commonly referred to as “ballasted.”  The solar panels are attached to racks, which are designed to incorporate a number of concrete block/bricks that – along with the weight of the solar panels and racking – ballast or weigh the system to down to the roof without us having to pierce holes and attach to the substructure.

If you have a pitched asphalt shingle roof or a metal roof, you can rest easy.  We have time-tested racking solutions for each.  These fully-engineered systems take into account the building structural loads as is required for permitting.

What informed the choice of solar panels for my design – are there other options?

We chose a REC 385 watt solar panel for your project for these reasons:

1. Economics: These are highly cost-effective solar panels, without sacrificing quality. There are, for example 400 – 450 watt panels that are either currently or about-to-be available.  However, when I plugged in the numbers for these higher-wattage panels, the increase in cost decreased the overall Internal Rate of Return.  In a nutshell, those extra 15 or so watts per panel were not worth the cost increase, when considering the project strictly on economics.  That said, some buyers choose to maximize energy production and the lifetime savings, even if it modestly degrades the 25 year economics (Internal Rate of Return).
2. Warranty: Because SES is a certified REC installer, this bumps the manufacturer’s workmanship warranty from 20 to 25 years.  So these panels come with a 25 year performance (typical) AND 25 year workmanship (atypical) warranty from the manufacturer.  Most other panels – including higher wattage – do not offer this type of warranty

That said, SES offers a wide range of solar panels to meet all budgets and design criteria.

How will I know my solar system is working every day?

Your system will come with robust 25-year online monitoring.  Each day you will be able to see both your current and historical solar output.

What warranties come with the system?

• Solar Panels = 25 year performance and 25 year materials and labor
• Inverter(s) = 12 years (extension to 25 years are available)
• Optimizers = 25 years
• Installer Workmanship = 2 years for all workmanship items

What kind of maintenance does the system need?

As Solar PV systems have no moving parts, there are very few and infrequent maintenance items.  Your monitoring system (referenced above) will alert you to any errors in the system’s operations (we also have access to the online portal).  Some solar system owners, especially out of town investors, may elect to contract with us for an annual Service agreement with 2 site visits per year and accompanying reports.  However, most of our small/mid-sized commercial building owners simply monitor the systems and contact us with any questions as needed.  SES does have a dedicated Service Department with hourly services available to both our own customers as well as solar systems installed by the many solar contractors who may have come and gone over the years.

C O N S T R U C T I O N

What are the permitting requirements and how long do they take?

We typically allow 12 to 16 weeks for the design, engineering and permitting phases of the project.  Both building and electrical permits are procured through the county or city jurisdiction, and an interconnection permit is required through your utility company.

How long is construction?

An 81.62kW project such as this one would likely take around 4 weeks for material installation.  Inspections and approvals require another 3 – 4 weeks post-installation before the system can be energized.

It is safe to say this is a minimum 6-month project from contract signing through fully operational.

Will there be any disruption to my daily operations?

80% of the construction process takes place on the roof, so there will be little to no disruption to the daily operations taking place in the car wash.  Wiring of the solar system will require access to the Main Service Panel in your electric room.  Any temporary disruption to the electric service will be arranged with you ahead of time and completed during an agreed-upon time.

Are there any time constraints regarding the current solar incentives applied to my system?

Yes.  In order to qualify for the 2020 Federal Tax Credit of 26%, you must have a signed contract in place with us AND we need to have spent 5% of the total contract amount (permits/engineering) in 2020.

Additionally, the Renewable Portfolio Standard (RPS, which is state legislation that determines the length and the amount of SREC values) is designed to decline as more solar is installed and the State meets its clean energy goals.  In a nutshell, the sooner the system is energized, the sooner you can realize the near-term, highest SREC values.

By Lisa Walsh | Commercial Solar Developer | Solar Energy Services, Inc.

For the newly-finished Taylor Street Storage facility in North East DC, a 17,500 square foot green roof with fully integrated solar panel array that showcase a value-stacked, elegant design providing both a cost-effective solution to storm-water management. All without forfeiting the solar panels that generate income via federal tax incentives and DC’s superb solar production-based financial incentives.

With over three million square feet of green roofs in Washington DC and 50MW+ of solar installations – the City is no stranger to either technology. However, the integration of both on the same roof is less common, despite the symbiotic relationship between the two offering a number of advantages.

Storm-water Management

Approval for a commercial building permit in Washington DC must include a storm-water management plan as defined by DC’s Department of Energy and the Environment (DOEE). For Taylor St, the Development team could have chosen between:

1. Lost parking spaces to house costly underground containers for capturing and storing runoff
2. Payment of ever-increasing storm-water management fees
3. Implementation of a multi-layered Green Roof to treat 100% of the rainfall obligation with a perennial, sedum based plant surface – as per DOEE requirements.
   The green roof offered a cost-effective storm-water management solution that required no additions or demo’s to the existing structure.
   Solar Panels

Solar Panels

Most savvy developers realize that an empty roof in Washington DC is money left on the table. With the best solar financial incentives in the USA, the payback is rapid followed by years of production-based paydays. Small wonder that the development team at Taylor Street were interested if – and how – a solar array could integrate with a Green Roof. The good news is not only does the solar system seamlessly integrate with the green roof but the relationship is one of symbiosis and cost-effectiveness. Here’s why:

BALLAST. Most solar systems installed on DC’s commercial flat roof areas are ballasted. i.e. an assortment of concrete blocks, along with the weight of the solar panels and racking, is engineered to hold down the weight of the array with minimal or no penetrations to the roof membrane.
With close to 35 PSF of weight, a green roof more-than provides this ballast negating the need for concrete blocks or supplemental attachments. This is worth mentioning as the Green Roof is now a fully engineered component of the solar system bringing the question of tax credit eligibility into play. Is the Green Roof, or portion of, now eligible for the 30% Federal Tax Credit? Certainly worth conferring with a tax adviser.

CREATION OF A MICRO-CLIMATE: Furbish designs their perennially healthy green roofs with a wide palette of sedum species. These drought-resistant succulants require little maintenance and have varying requirements for daily sunlight – from full-sun to all-shade. Contrary to first impressions the intermittent shading and weather protection provided by the solar panels provide a micro-climate highly conducive to the plants underneath, in between and around the solar arrays.

DESIGN: Most ballasted solar systems have ample aisles between each row of solar panels insuring that each solar panel is optimized and avoiding shading from the panel row in front. Solar panels can also be tilted anywhere between 5 and 35 degrees. This is adjusted to account for shading, panel count and orientation considerations. This flexibility of design was helpful for integration the green roof. Aisle spacing, solar panel size and tilt were designed with the Green roof in mind – not only as it relates to healthy plants, but also for annual maintenance access requirements.

CHALLENGES: Solar-integrated green roofs are not as common as their singular counterparts. Fair to say this project did not come without some challenges

DOEE DESIGN STANDARDS: Department of Energy and Environment is responsible for DC’s Stormwater Management and insuring all DC buildings comply with runoff standards. The burden was on SES and Furbish to ensure that the solar arrays were not going to impede the ability of the plants to thrive and provide the necessary water retention requirements. The design and permitting side of the project insofar as panel tilt, aisle spacing and racking integration were designed in collaboration with DOEE.

INSTALLATION TIMELINES: Furbish Company are Green Roof specialist, Solar Energy Services, Inc. are solar specialists. Integrating these technologies took heightened coordination between our installation teams, mostly in terms of labor efficiency, communication and timeliness. The latter was particularly stringent as the Certificate of Occupancy, required to meet the developer’s lease requirements, was contingent upon the completion of the Green Roof which now included solar racking, wiring and panel installations. Throw in some PEPCO Permission to Install challenges related to the solar portion, and the pressure was on.

The project came with some unusual PEPCO interconnection timing challenges at the end. Ironically not related to the Green Roof aspect of the application. Nonetheless, this system is now outputting electricity like gangbusters. All’s well that’s ends well.

Washington DC has been a leader in solar development for many years.  In the last 12 years, DC legislators have set aggressive targets, helped to streamline solar permitting, introduced a solar access rights law, and passed a landmark community solar bill to increase access to solar for those without an available sunny rooftop.   Many of these policies include mechanisms to help bring the benefits of solar to communities of low and moderate income.  The collaboration between the solar industry and DC policymakers has helped to build a robust market where solar installations are happening throughout the city, from downtown office buildings to churches, warehouses and residential rooftops across the city.   These policies and the resulting private investments are creating good jobs in the District and reduced energy costs for many of its residents.

Double Down

Since solar and clean energy have been delivering in DC, the stakeholders decided they wanted a more ambitious goal.  In the summer of 2018 the District started on a path to double down with their commitment to renewable energy by proposing the most aggressive renewable energy target in the country when compared to other state policies.  The new goal calls for 100% clean energy (5.5% solar) by the year 2032, with 10% solar by 2041.  Hawaii and California are the only other states that have 100% goals, but both of those targets are positioned for 2045, quite a few years later than DC. 

Other Benefits of the legislation

In addition to doubling the renewable energy target, the proposed legislation would provide a few more benefits to solar advocates.  The bill:

1. Limits geographic eligibility over time to concentrate the solar development in the District or on the District’s grid
2. Pulls the current solar carve-out schedule forward by two years to increase SREC demand
3. Extends the solar carve-out from 5.5% in 2032 to 10% by 2041
4. Addresses specifics about previously contracted (“grandfathered”) load that is exempted from the newest RPS
5. Includes transparency requirements on the energy suppliers to provide insight into the exempted load and associated time periods
6. Modifies Alternative Compliance Payment (ACP) schedules to require $300 ACPs through 2041
7. Increases the shelf-life of an SREC from three to five years, increasing SREC price liquidity and stability.
8. Introduces various reporting requirements on the Public Service Commission in order to keep the Council and the Public apprised of the progress of renewable energy development.

We’re in the Home Stretch

The Clean Energy DC Omnibus Amendment Act of 2018 was introduced in July 2018 and made its way through the Council over the fall with hearings and two unanimous votes of support on November 27^th and December 18^th.  In January, the bill was submitted to Mayor Bowser for her signature and she obliged on January 18^th “Click here to read the bill“.   The remaining hurdle is for approval by the US Congress within 30 legislative days.  The only way that Congress can stop this legislation is with a joint resolution and the President’s signature.  As a result, passage into law is considered by most to be inevitable and in fact we are seeing market pricing for SRECs responding accordingly.

Thank your Legislators

So now that the law is almost passed, it is time to prepare to deliver.  The industry has a lot of solar to build and we’re working hard at that.  As a solar advocate who cares about renewable energy in DC, please consider taking a few moments to call or write to your Councilmember to thank them for their support of Clean Energy DC Omnibus Amendment Act of 2018.  It’s always important to show our gratitude.

Thank you for your support of solar!

For the month of February SES is offering $1000 off of any solar system that includes US Manufactured Panels.  That’s right, support US manufacturing and Save!  All you have to do is reference this offer during or before your site visit.

Here’s 5 More Reasons Why:

1.    Provides Jobs

The Solar Industry’s growth and inherent job creation is no secret, we are leading the pack among every other industry nationwide. Most of these jobs are being created on the installation side, but we also need to support the rest of the value chain.

2.    American Independence Includes Energy Independence

We as Americans have pride in our nation and in our independence. By generating our energy locally, with renewable resources, and US products, we strengthen our country and our independence, both individually and collectively as Americans.

3.    Do It for The Environment

Current technologies allow manufacturers in the US to support a greener, cleaner solar manufacturing process. If we invest in American-made products, we strengthen our manufacturing base, support US jobs, while insuring  that we are doing our part to contribute to a cleaner environment for ourselves, and the generations to come. Also, by reducing the need to ship overseas, the net carbon footprint is much lower

4.    We Control Labor Standards, They Don’t

The US is a leader in fair labor and safety standards. With minimum wage and safety regulations in the workplace being upheld, you can be sure that your panels are made by people who are being supported and treated fairly in the workplace.

5.    Guaranteed Quality of Goods

The term “Made in the USA” speaks of quality, excellent craftsmanship and a superior product. With a lower cost of labor abroad, many factories rely on fabrication and assembly processes by hand. This introduces higher rates of  failure when compared to the American Standard of automated soldering and assembly. While panel quality continues to improve in the aggregate, US products remain the leaders in quality and performance.  Price tags are slightly higher for Made in USA products, but you find true value among longevity and performance.

As we’ve seen the cost of solar drop rapidly in the last ten years (more than 80%), we continued to endure those naysayers in the distance arguing that “no matter how cheap you make solar; much like wind, it will never dominate the energy landscape because of intermittency.” It’s hard to believe people still say “Never” in the context of technology? That term only provokes our great American drive and ingenuity, which continues to deliver. Witness electric storage costs have dropped 80% in the last eight years, outpacing the dramatic solar cost reductions!

Battery technology today

Today, electric batteries continue to back up solar in more and more markets every year. Batteries are giving solar system owners a lot more control and choice about energy independence, while giving grid operators a game changing tool to help manage the modern grid with greater economic efficiency. We’ll talk more about the how and why, later in this post.

Storage market is heating up

So far SES has contracted for 7 battery installs already this year in Maryland, up dramatically from 2017. The residential solar plus storage market has begun to take off in many markets. In fact, the preferred battery suppliers were out of stock for more than 4 months this year, both from increased demand to complement solar projects, but also due to the soaring demand increase for Electric Vehicles (EVs) that use the same battery technologies.

Storage is like bacon

Why is storage so valuable? One of my favorite energy experts, Katherine Hamilton (https://38northsolutions.com/team/bios/) once said that “storage is like bacon, it makes everything better.” Storage has almost a dozen value streams that can be monetized now or in the future. The two biggest and most obvious value streams are that it can provide extra capacity in times of high demand, and it can provide extra demand in times of excess capacity. In both cases, it provides stabilizing value to the grid and more efficient use of generating assets.

A testament to the value of storage on the grid was seen several years ago when the California Public Utilities Commission required utilities to procure a minimum amount of storage. Not only did the major utilities comply, they all procured more storage than mandated. They are well aware, storage helps them modulate an increasingly dynamic and decentralized grid.

Why should I consider solar plus storage for my home?

If you deploy solar along with your energy storage solution, you can utilize the same federal tax benefits as you do for solar, namely the 30% investment tax credit. In Maryland, you are eligible for an income tax credit on the storage portion of the system, in addition to the other state solar incentives (https://energy.maryland.gov/business/Pages/EnergyStorage.aspx). As a result, the economics in Maryland for residential solar + storage are much improved from a few years ago.

The main reason our residential customers are deploying energy storage is for backup power during a grid outage. This is typically done by way of an essential loads subpanel in their electric system. SES often installs these subpanels as part of our solar + storage project.

Another factor driving this trend is a residential customer’s desire to position themselves to cut the cord in the future, if the utility relationship becomes unappealing or uneconomical for them.

Lastly, future changes to electric rate design and/or net metering policy, could present solar + storage owners the ability to increase their savings or even generate revenue from the services that their frequently-idle storage can provide.

Are you building a new home and want to be sure it is ready for the energy architecture of the future? It’s easier than you think. Ask your builder or electrician to insure you have an essential loads subpanel (to use with electric battery storage, or possibly a generator). Secondly, request they install an empty (capped) electrical conduit from attic to electric room for us to easily add your solar energy conducting wire in the future.

Please see Roger Perry’s technical writeup on residential storage applications recently implemented by SES.

What has brought about this market opportunity?

Electric storage has long been an essential part of any true off-grid solar/wind application and this is where the earliest developments have taken place. As solar began to penetrate the grid in the last 10 years, there has been a lot of R&D investment in this future “holy grail” of renewable energy development. The investment is now paying off.

Storage broke into the US grid-tied market about five years ago. In the case of Hawaii, it was mostly a market driven change. Extremely expensive power, a grid congested with rapid solar growth, denials and delays of solar interconnection applications, and abundant sunshine, all contributed to the new paradigm. This resulted in economics that justified a certain segment of residential customers in Hawaii to cut the cord and embrace storage as a long-term solution. This sent an alarming message to utilities around the world: You better embrace these changes or plan to go the way of the buggy whip!

At about the same time, California’s PUC mandated a specific quantity of storage on the grid, much of it behind the meter. The utilities went on to exceed that mandate in the first auction and later in 2017, the target was increased again, with little to no resistance. In the past year, we’ve seen California utilities choose new battery storage over new gas fired peaker plants to meet peak loads in three separate cases. This is a tremendous validation of the economics of storage, particularly in an age of record low natural gas prices.

What’s ahead for energy storage?

The horse is out of the barn. Distributed energy generation combined with storage, will be the foundation of the future electric grid. The role that storage will play in this transformation will be enormous at the macro level, but somewhat uncertain at the micro level due to regulatory policy, incentives, and local market conditions.

We should expect to see strong storage growth in markets with the following attributes:

• Places where local or state incentives are promoting storage – Maryland is one of them.
• Markets where system owners can capture supplemental revenue from their storage investments (Our grid operator, PJM has piloted bundling distributed storage as a revenue generating resource for storage system owners)
• Markets with high electric rates or Time of Use (TOU) rates.
• Markets where electric “demand charges” represent a large cost for commercial and industrial (C&I) customers. This is because storage can dramatically lower a building’s electricity demand profile, and thus add energy bill relief to a portion of the bill where solar has had limited impact.
• Microgrids are increasingly popular, particularly with campus style environments and military installations. These applications will increase storage demand and further drive down costs through scale and experience.

Next steps

Be sure to contact SES if you are interested in solar + storage. We will be happy to design a system that is customized to your needs. As always, we’ll provide you all the support you need to capture the Maryland solar grant and the storage tax credit (which has a limited budget) so contact us right away.