What Is Commercial Solar Battery Storage?
After publishing our well-received article on combining solar panels and on-site batteries, we started to ask businesses about commercial solar battery storage. More specifically, they wanted to know:
- How to use batteries to grow the savings already generated by solar
- What commercial benefits exist (beyond utility bill savings)
- Whether their business type is well-suited for solar batteries
- What it costs to combine solar power and on-site storage
If you’re looking for ways to make your business greener or more profitable, this primer covers all of the above. It also addresses one of the biggest challenges of storage technology – i.e., how to service and upgrade batteries, given that they ship with far less warranty protection than photovoltaic (PV) panels do.
Before diving in, however, it’s essential that you understand the basic mechanics of how battery storage technology works.
How Do Commercial Solar Batteries Work?
On-site solar batteries act as an extra reserve that can store electricity – whether it comes from your PV panels or the utility grid. This reserve can then discharge electricity, feeding it into your business or the larger energy grid.
As a business owner, you can use the above configuration to slash your monthly utility bills dramatically:
- The first step involves adding on-site batteries to an existing PV installation or a new solar commissioning project.
- During the day, you use the solar from your panels to power your business. Any excess solar electricity goes into the batteries – instead of into the utility grid.
- You use the stored solar energy in your batteries at night or on cloudy days to power your operations – again, instead of drawing electricity from the utility grid.
You only need to buy grid electricity when your PV panels aren’t generating power in the above scenario, AND your solar batteries are 100% empty. And even then, the utility electricity you buy can be used to top up your batteries or power your business – whichever option makes more sense at that moment in time.
Most battery storage solutions are stationary installations – generally near the breaker box. But it’s also possible to duplicate the above benefits using electric vehicles (EVs). Each car comes with in-built batteries capable of topping up solar power and discharging stored energy on command. With this approach, your total storage capacity is limited by the number of EVs, with some businesses using entire fleets of electric vehicles to manage their energy and storage needs.
However, adding batteries to a new or existing solar PV installation costs more upfront. Plus, there are more components in the system now, which means taking on additional maintenance and upkeep responsibilities, further driving up the cost.
Moreover, there are already simpler and cheaper ways to “store” unused solar power. Most states, for example, offer some net energy metering program that allows you to feed excess solar electricity into the grid. Better still, utilities are typically required to compensate you for this power – usually in the form of credits that you can apply to future bills. The entire grid acts as “virtual” storage for your daytime solar electricity with this approach. You only need to buy grid power at night (when rates tend to be lower). And you can use your cumulative utility credits to pay down those bills and save even more money.
And yet, despite the ease and simplicity of net energy metering, a growing number of businesses are embracing solar batteries anyway. The following section explores why this trend is growing.
What Are Some Commercial Applications for Battery Storage?
Battery storage acts as a buffer between you and the utility grid in the scenarios outlined above. It’s an extra reservoir of stored solar energy that you can tap before switching to utility electricity. This configuration automatically saves you money without your needing to manage anything actively.
However, it’s possible to grow these savings by strategically coordinating when and how you use the stored power in your commercial solar batteries. 2 of the most common tactics include peak shaving and load shifting.
1. Peak Shaving
Most utilities set electricity rates for businesses and industrial customers based on each user’s maximum peak load for that billing period. Doing so is necessary to ensure that these heavy power users have access to electricity on demand – whenever they need it. However, it also requires that utilities keep equipment and resources on standby when no one needs that extra electricity.
Utilities apply “demand charges,” which is the energy equivalent of Internet bandwidth to cover these standby costs. The more power you might need at any time, the higher your base rate for that billing period. You can look at your energy bills to identify historic spikes in consumption. Those peaks represented when you used the most electricity. And they are what utilities use to calculate your business’s demand charges.
To reduce these charges, businesses historically had to scale down production to keep their consumption levels consistent. But with batteries, you can use stored solar power when your energy needs are highest. This reduces your max peak load, which in turn reduces your demand charges.
Peak shaving is a very effective strategy for reducing utility costs – especially if your heaviest energy needs follow a set schedule. For example, imagine a municipal fleet of school buses that all finish their routes, return to the depot, and charge at the same time every day. Using on-site batteries to flatten out this daily spike in demand would generate lower overall utility bills for the entire city.
2. Load Shifting
With load shifting, businesses move their most energy-intensive operations to the cheapest times (solar power is most abundant). And they rely on batteries whenever grid prices are highest. Note that these businesses are consuming just as much energy as before – they’re just “shifting” when they consume it.
This strategy is well-suited for businesses with predictable energy needs like peak shaving. For example, most solar-enabled office buildings switch over to grid electricity when the sun goes down. Not only does this generate a sudden spike in consumption (leading to demand charges), but sunset also coincides with peak rates in many utility markets.
However, you can use stored solar energy to power your operations at dusk with batteries. This helps to smooth out consumption spikes while still allowing you to perform the same amount of “work.”
Additional Benefits of Using Commercial Solar Battery Storage for Your Business
For most business owners, the ability to save money is reason enough to combine solar power and battery storage. However, the advantages of this pairing go well beyond utility bill savings. Below are just some of the driving forces behind this increasingly common combination.
1. Reliable Backup Power
If you operate in an area with frequent grid outages, adding on-site batteries can help make your business more resilient. In effect, backup energy allows you to continue powering your operations even if the rest of the grid goes down.
This approach is critical in places like California and Texas – both of which have suffered significant grid failures in recent years. But as climate change continues to upset weather patterns, more businesses worldwide will likely incorporate batteries into their continuity and resiliency plans.
2. Emergency Backup Power
There are situations in which backup power goes beyond business continuity. Having 24/7 access to electricity is about survival. Medical services, data centers, emergency response facilities, and military installations fall into this category. Because even a temporary loss of power could lead to catastrophic consequences, adding on-site batteries allows these stakeholders to continue providing essential services.
3. Smaller Carbon Footprint
They are going solar offers immediate environmental savings since you’re generating electricity from clean sunshine instead of relying on dirty utility power generated from oil, natural gas, or coal.
Adding batteries grows those carbon savings since they delay when you need to draw electricity from the grid. On-site storage also reduces how much utility power you take across the board.
4. Corporate Social Responsibility
This point follows the previous one, but going green can increase sales. According to a business sustainability study by GreenPrint, 80% of US consumers are more likely to buy products labeled as eco-friendly. And a roughly equal percentage factor “environmental impact” into their purchasing decisions.
If you already have PV panels on your property, you’ve likely seen this trend play out. Americans increasingly prefer doing business with companies that take the environment seriously. Installing solar demonstrates your commitment. Adding (and showcasing) batteries can further solidify your role as a responsible corporate citizen who cares about the planet.
5. Energy Independence
Most businesses install enough storage capacity to save money or provide emergency backup power. In both cases, the utility grid still plays a critical part in this energy mix – especially at night.
However, with enough solar and storage, it’s technically possible never to take electricity from the utility grid. Your batteries are no longer a buffer. When combined with panels, they’re able to power your entire operations using nothing but pure sunshine – day and night.
This approach represents the ultimate in energy independence. And it’s often the sole option for remote commercial facilities far off the utility grid. The only alternative is to use expensive, noisy, and dirty diesel generators.
However, you don’t need to live in the woods to become more energy independent.
Many grid-tied solar customers add extra storage capacity to shield themselves from tariffs, rate increases, outages, and other utility headaches. The more power these users can generate and store on-site, the more control they have over their energy needs.
6. Improved Frequency Response
Frequency response is an electronic component’s ability to adjust to sudden dips or spikes in power. Relying exclusively on the grid or PV panels exposes your business’s appliances to potential surges or breakages. A passing cloud, for example, could stop blocking the sun – sending a sudden jolt of solar power that could damage some internal circuitry.
Batteries help prevent this.
Acting as a buffer, they can absorb sudden spikes in power. And when there is an unexpected dip, these same batteries can be used to power your operations with a steady charge.
What Types of Businesses Benefit from Solar Energy Storage?
Any organization looking to generate more considerable financial or environmental savings can benefit from adding on-site batteries to a new or existing solar PV installation. However, this combination is trendy among the following segments below:
1. Educational Institutions
Schools often have sprawling campuses with lots of rooftop PV potential. They also have higher-than-average energy needs once the sun goes down (if students live in dorms).
2. Clinics and Hospitals
They need 24/7 reliable, uninterrupted power. And relying exclusively on solar panels and the utility grid is too risky when delivering life-saving care.
3. Hotels and Resorts
Hotels receive guests around the clock. And in addition to rooms, they also have to power their heating, cooling, pools, ice machines, restaurants, and bars. And because many resorts are often in the sunniest locales (or busiest during the brightest times of the year), they’re ideally suited for this solar and storage combination.
4. Offices (with Night Hours)
All office buildings can benefit from solar and storage. But if yours follows evening hours, adding batteries can help you claim substantial savings. That’s because on-site storage reduces how much grid electricity you purchase at night.
5. Factories and Plants
With heavy machinery and 24/7 schedules, factories have some of the highest energy requirements on this list. And this makes them especially vulnerable to demand charges. Adding batteries can help smooth out peaks across the board.
6. Car Dealerships
Many dealerships already use solar-enabled carports to generate power and shade their vehicles. But there’s a growing push to add on-site batteries and EV-charging capabilities at car dealerships specifically – and commercial parking lots in general.
How Much Does Commercial Solar Battery Storage Costs?
Because batteries are a modular technology, you can combine many units to increase the total storage capacity. There is often little distinction between commercial vs. home battery storage. Even Tesla’s Powerpack commercial storage solution is just a bunch of Powerwall units stacked together in a new case.
This means we can rely on residential storage pricing as a baseline. And for this market, Energy Sage reports that batteries range from $8,500 to $10,000 off-the-shelf, with installation labor driving up the range to $10,000 to $20,000.
What you’ll ultimately pay depends on how much storage capacity you add. It also matters which manufacturer you choose. Some (like Tesla) use certified dealers, limiting the pool of installers and potentially driving up the cost.
Just keep in mind that you probably won’t have to pay the total price. That’s because state and federal incentive programs exist to help you partially cover the upfront cost. The federal investment tax credit, for example, reduces the total cost of solar and PV-tied energy storage solutions by 26% (parts and labor included). And some states – like California, Maryland, New York, and Massachusetts – offer storage-specific rebates and incentives to help you save even more.
Does Solar Commercial Battery Energy Storage Make Sense for Your Business?
It depends on your goals. If you’re looking to save money, for example, you should run a cost/benefit analysis to determine which option is cheaper:
- Using net energy metering to boost the savings from your solar installation
- Using batteries to reduce your reliance on electricity from the utility grid
This analysis requires requesting a free quote from a local installer and running the numbers to see which option delivers higher savings.
If the goal is to have backup power, you’ll need to assess your risk tolerance and determine how vital energy is for your operations. If you’re adding batteries to boost your energy independence, increase carbon savings, or enhance your corporate social responsibility efforts, only you can determine what makes sense for you. But we hope you move forward anyway since your becoming greener benefits everyone.
However, there is one final point to consider – i.e., what to do when your commercial solar PV battery storage system needs servicing and repairs.
The Challenges of Solar Battery Maintenance
Most modern solar PV panels ship with 25 years of warranty protection. Even still, monitoring, maintaining, cleaning, and occasionally upgrading your system is essential for long-term savings.
Because most batteries ship with 5 to 15 years of warranty coverage, routine upkeep is even more critical.
However, finding service repair teams is challenging since the solar storage revolution is relatively new. If a battery malfunctions for some reason, it’s tough to find service technicians who can correctly diagnose and quickly fix the problem. As a result, many customers replace broken batteries, which is incredibly costly and can extend the payback period of your clean power investment.
We offer a different approach.
We can instantly pair you with a local technician who specializes in whatever solar battery technology your PV system uses with our AI-powered matching algorithm. Our platform analyzes your installation specifications before identifying area experts with the training and certification required to repair whatever issue you’re facing. We can instantly connect you with any solar maintenance team you need – whether to service batteries, repair an inverter, or replace a router.
Conclusion
Commercial solar battery storage offers many utility bill savings, environmental protection, and energy security benefits. And with proper maintenance, it’s possible to extend those benefits and extract even more value from your on-site batteries.
To learn how our AI-powered matching platform can streamline your maintenance requirements and help you save even more, get started today.