It took a long time for commercial solar installations to take off. In fact, despite an increasing tendency for big corporations, big box retailers and vast data centres to make high profile, headline-grabbing long-term commitments on rooftop PV, you could see why many businesses, often going from short-term lease to lease on their properties, weren’t as keen to take the plunge.
By contrast, on paper at least, even at this relatively early stage of its market development, energy storage could have instant appeal for a broad range of companies – and is already doing so. Over five years, commercial and industrial (C&I) energy storage in the US is forecast by IHS Markit to grow from 60MW of annual installations in 2017 to 400MW in 2022.
That would mean the market reaching a total installed base of more than 1,500MW by then. With the cost of this once-expensive and no-longer-so-exotic (at least as far as the finance community is concerned) set of technologies falling, C&I energy storage can enable benefits to the customer, and even when installed behind the meter in this way can offer benefits to utilities and the grid in front of the meter.
Behind-the-meter (BTM) energy storage systems at C&I sites are well positioned to provide benefits to the end customer (e.g., demand charge management and back-up power) and utilities (e.g., meet capacity requirements and provide demand response). As such, they form a crucial part of a more decentralised energy system. From the commercial customer’s point of view, signing a relatively flexible contract for a service-based proposition – where the provider takes care of even the economic modelling of the system throughout the life of the contract simplifies the whole process. And unlike rooftop solar, the customer does not have to effectively take custody of a huge structural addition to their building, batteries are perhaps more like industry equipment that can be deployed – or removed again – fairly easily.
Not to mention that while economics vary hugely from project to project, in some specific cases, a C&I energy storage system in the US could achieve payback in not much longer than a year.
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