Selecting Commercial Battery Energy Storage Systems

Battery energy storage systems (BESS) or energy storage technology isn’t new. Alessandro Volta (of “voltage” fame) developed a working electrical battery as far back as 1799. And archaeologists have unearthed even earlier prototypes dating back to ancient Mesopotamia (250 BC).

Starting during the Industrial Revolution, however, price drops and efficiency gains helped bring energy storage into the mainstream – powering everything from flashlights to children’s toys to cell phones. And more recently, battery technology is being used to store renewable energy and even power automobiles.

This article explores why this trend is happening. It also examines how batteries and other energy storage technologies are increasingly playing a central role in the global decarbonization movement as the world transitions away from dirty fossil fuels.

Different Types of Battery Energy Storage Systems

Regardless of their design, all batteries serve the same basic purpose – i.e., capturing and storing energy now to do “work” later. How they deliver on this depends on the underlying storage technology itself.

Below are some of the most popular battery types, complete with use cases, benefits, and limitations.

1. Chemical Batteries

This type of battery stores electrical energy as chemical energy – before converting it back to electricity:

Some can only be discharged once (i.e., disposable AA batteries).

Others are rechargeable – from AAs to lead-acid to the lithium-ion batteries powering your phone or computer.

There are advantages and disadvantages when using chemical batteries as with all storage technologies.

Chemical Battery Pros

Their small size makes them an ideal storage technology for portable applications (like cell phones).

They’re modular and scalable, allowing one to combine numerous batteries for larger applications – like powering electric vehicles (EVs).

Chemical batteries are relatively affordable, making them a popular option for most consumer needs.

Chemical Battery Cons

Chemical batteries lose storage potential over time, with only a limited number of “charge cycles” before they must be discarded.

Chemical batteries generate much ecological waste. Many of them use toxic compounds. And most batteries in this group can’t be recycled easily.

Their small size means they can only store a limited amount of energy per charge cycle. This is perfect for small gadgets. But stacking multiple batteries together for more extensive applications can get expensive.

2. Pumped Hydro

With pumped hydro, energy is literally “pump” water to a higher elevation. When work needs to be performed, water can flow back downhill – passing over turbines to generate electricity. The first large-scale applications of pumped hydro date back to the 1890s, but variations of the technology go back centuries.

Just as with chemical batteries, pumped hydro has certain advantages and disadvantages.

Pumped Hydro Pros

Pumped hydro doesn’t lose storage potential over time. There are moving parts, and thus more wear and tear. But the capacity of the water reservoirs used to store and discharge energy remains unchanged. With proper maintenance, a pumped hydro station can continue operating for 150 years or longer.

Pumped hydro is source-agnostic, meaning you can use any energy input to pump water up the hill – from solar to wind to coal. You can even use chemical batteries (although this would be expensive and impractical).

This battery technology can store reserve energy, making pumped hydro ideally suited for utility-scale applications.

Pumped Hydro Cons

Pumped hydro is not practical in all locations (or during all seasons). To operate, you always need liquid water – even during the coldest times of the year.

Developing pumped hydro facilities is disruptive to local habitats. However, the negative environmental impact is partially offset because pumped hydro facilities don’t pollute over their long lifespans.

Pumped hydro only makes sense at scale, with millions of dollars in investment. This storage technology isn’t something you’ll see on the consumer market.

3. Hydrogen Fuel Cells

Hydrogen fuel cells convert chemical energy (from hydrogen and oxygen) to generate electricity. However, unlike conventional chemical batteries, hydrogen fuel cells aren’t limited by their number of charge cycles. As long as there is enough incoming oxygen and hydrogen, they can theoretically work indefinitely.

Hydrogen Fuel Cell Pros

Once in use, hydrogen fuel cells are very eco-friendly, with water and heat being the only two byproducts.

Hydrogen fuel cells are source-agnostic, allowing you to use fossil fuel, nuclear power, or renewable energy as the input.

According to the US Department of Energy, 1 kg of compressed hydrogen gas delivers the same power as 2.8 kg of petrol. And compared to lithium-ion batteries, hydrogen offers an energy density of 35,000 W/kg, compared to only 200 W/kg.

Hydrogen Fuel Cell Cons

There isn’t much infrastructure to support things like refueling, being a relatively new technology. As such, generating and transporting compressed hydrogen is still quite expensive.

Despite the theoretical energy density of hydrogen, modern fuel cell technology isn’t compelling yet. A typical hydrogen fuel cell is only 25% efficient – compared to lithium-ion’s 70% efficiency.

It’s important to note that the above limitations are only temporary. Hydrogen fuel cells are a young technology. And many of the most significant efficiency boosts and price drops are still on the horizon. By contrast, lead-acid batteries are a mature technology that isn’t likely to improve significantly.

Thermal Storage Technology

This broad category of different technologies use temperature differences to “store” power for later use. For example, you can use energy to turn crystal salt into a molten liquid that stays in a highly insulated container. You’re basically injecting fuel into the salt and raising its temperature. When work needs to be performed, you then retrieve that energy by reducing the temperature of the salt and releasing heat. Sometimes this heat is used to turn a turbine and generate electricity. Other times, the heat is used to take a hot shower (like solar thermal panels).

Thermal Storage Pros

Although salt is a common storage medium, you can use anything heats up – including water, silicon, aluminum, and even rocks.

This battery technology is power source-agnostic, meaning you can use any input to heat the storage medium. Solar thermal showers, for example, take their energy directly from the sun.

With proper maintenance, there is no degradation over time. As a result, you benefit from an infinite number of charge cycles.

The storage capacity is limited only by the size of the container, making thermal storage ideal for many utility-scale applications. And depending on how insulated that container is, thermal batteries can store power for a very long time.

Thermal Storage Cons

Although the solar thermal water heaters you often see on homes are relatively affordable, larger-scale applications require a lot of time and money to get off the ground.
Charging and discharging aren’t immediate since raising or lowering the temperature of whatever storage medium is being used takes time.

Mechanical Batteries

Mechanical batteries store “kinetic” energy, with the simplest example being a spiral spring that can absorb and store power when compressed. However, the flywheel energy storage system (FESS) is a more popular example. With this technology, energy is used to spin a large, heavy disc that stores power in the form of rotational energy.

Mechanical Battery Pros

Automatic batteries don’t pollute – nor do they use toxins when operating.

Automatic batteries can charge and discharge very quickly (in theory). This is in sharp contrast to molten salt’s relatively slow response time.

Mechanical Battery Cons

The spinning wheels used to generate angular momentum are incredibly heavy. And changing their speed requires a lot of energy, limiting how quickly flywheels can charge and discharge (in practice).

In addition to discharge speed limitations, there are also mechanical limits to how much energy a flywheel can reasonably store.

The technology is inherently dangerous, with high-velocity rotors and spinning components. Flywheels are not a consumer item.

The Benefits of Battery Energy Storage Systems across Industries

Again, energy storage technology isn’t new. The first commercially available battery in the US was the Columbia Dry Cell back in the 1890s. And in the decades since, batteries have enjoyed exponential growth across nearly every sector of society. This is especially true in the consumer market, with portable batteries being used to power increasingly sophisticated (and mobile) electronics.

However, not all energy storage solutions are designed for portability.

There is a growing movement to use stationary batteries for a wide range of applications – particularly as solar and wind power become more popular:

Both are intermittent energy sources with unpredictable output.

Both are crucial for weaning us off oil, natural gas, and coal.

Batteries are what helps bridge the gap.

1. How Utilities Use Energy Storage

Many large-scale power producers now use batteries to store excess solar and wind power. When electricity demand suddenly spikes, these utilities can discharge their batteries and send energy into the grid quickly.

Some of the benefits of this strategy include:

More reliable energy delivery at a lower cost since battery storage allows utility operators to “smooth” out peaks and valleys in renewable power generation.

Less “dumping” since unused electricity can be stored for later – instead of being sold to a neighboring utility (at a loss) or sent into the ether (also at a loss).

A greener overall grid features increasingly more renewable power – and less fossil fuel combustion.

2. How Homeowners Use Battery Energy Storage Systems

Because energy storage prices keep falling, large-capacity batteries are now affordable enough for a growing number of homeowners across the country. These residential battery solutions allow someone with photovoltaic (PV) panels to capture and store excess solar from their systems to power appliances at night or during grid outages.

This approach is cleaner and cheaper than relying exclusively on utility power at night when your panels stop working. And despite the upfront cost of solar-ready batteries, adding on-site storage can help shorten your entire renewable energy system (panels and batteries together).

For tips on optimizing your residential storage solution, read our article, Choosing a Battery Backup for Your Home.

3. How Businesses Use Battery Energy Storage Systems

Most commercial and industrial customers use energy storage for the same reason as homeowners – i.e., financial savings and carbon offsets. But whereas residential battery solutions are mostly set-it-and-forget-it, many businesses actively manage their energy storage schedules to optimize peak shaving & load shifting:

Peak shaving involves using batteries to reduce your business’s most energy-intensive hours artificially. These peaks are what utilities use to determine your rates for that billing period.

Load shifting involves using batteries to power more of your operations during the most expensive times of the day (and using utility electricity when rates go back down).

Many commercial customers also use energy storage for “solar smoothing” – just like utilities do.

If you’re also thinking about investing in battery storage, we recommend reading our earlier resource, How to Connect Solar Panels to Battery Storage. This article features practical tips for both residential and commercial users alike. But because commercial battery installations are often more extensive and more expensive, there are additional factors to consider.

Top Criteria for Selecting Commercial Battery Energy Storage Systems

Every business is unique, meaning there is no one-size-fits-all energy storage solution that applies in each situation. But below are some of the essential criteria worth considering before investing in on-site solar batteries for your own business.

1. Integration

Most batteries are “solar-ready,” making it easy to pair them with existing PV infrastructure. However, many inverters aren’t “battery-ready” since solar storage is a relatively new trend.

This point is moot when installing new solar panels and batteries simultaneously. Choose an inverter that is up to the task. But if adding on-site batteries to an existing PV installation, you may need to upgrade your inverter. And this can increase your costs significantly.

2. Sizing

Battery storage sizing is another important factor. You want enough capacity to store any unused solar power your PV system generates. But you shouldn’t add more storage capacity than the maximum output of your panels.

Threading the needle requires taking exact measurements to keep costs low while still receiving the benefit of as much storage capacity as your PV system can handle.

3. Installation

Installing solar batteries used to be a highly customized task. But the rise of residential and commercial storage solutions means that more solar installers are now equipped to complete the job – whether adding batteries to a new PV system or retrofitting energy storage to an existing solar installation.

However, not every solar installer has the skills and training to handle this pairing. So it’s essential you conduct careful research in advance.

4. Cost

Solar battery costs depend on various factors, including capacity, chemistry, make, model, and the labor involved. But off-the-shelf, you should expect to spend at least $10,000 for a commercial battery energy storage solution. And you should budget an additional $10,000 to $20,000 for installation workmanship.

5. Savings

Adding batteries helps to reduce your reliance on grid electricity. But how much you save ultimately depends on how you use your energy storage:

Your savings will be modest if your batteries are an all-purpose reservoir for excess solar power. This is the hands-off approach favored by most homeowners.

The savings can be substantial if you strategically use batteries for peak shaving, solar smoothing, or load shifting.

It also matters what utility prices are in your area – and how much solar power your PV system generates. Fortunately, you can determine these things in advance during your initial consultation and property inspection with installers. And based on the numbers, you can decide whether installing batteries makes sense.

A Critical (but Often Overlooked) Commercial BESS Criterion

One component often missing from the above cost/benefit analysis is the maintenance required to ensure your batteries reach (and exceed) their rated lifetimes, with most energy storage solutions shipping with 5 to 15 years of warranty coverage.

This maintenance is critical. Although most solar contractors know how to install batteries, very few know how to repair them. Even when a battery is technically fixable, replacing it is often the only viable option.

At 365 Pronto, we believe this is wasteful – both financially and environmentally.

Many service repair technicians specialize in solar batteries (as opposed to PV panels or inverters). Finding these repair teams can be challenging, especially if:

The components in your system are highly customized. Tesla, for example, requires that you use authorized dealers to preserve the warranty protection that ships with its Powerwall batteries.

Your installation uses outdated technology. The older the system, the harder it becomes to troubleshoot. Legacy components are also more difficult to source if you need to order replacements.

With 365 Pronto, however, you can instantly connect with experienced and trained service technicians for whatever solar-related maintenance and repairs you might face. After uploading your PV project’s specifications, our AI-powered algorithm assigns a unique DNA profile to your system before identifying a local repair team that can provide whatever repairs or replacements you need.

To learn how our automated DNA-matching technology can connect you with a qualified, on-demand solar repair team, schedule a free demo with us today.