The U.S. Department of Energy’s National Renewable Energy Laboratory and Clean Energy Group (CEG) have released the first comprehensive public analysis detailing the potential size of the commercial behind-the-meter battery storage market in the United States.
NREL analyzed over 10,000 utility tariffs in 48 states, finding that more than five million of the 18 million commercial customers across the country may be able to cost-effectively reduce their utility bills with battery storage technologies.
These findings, grouped by utility service territory and state and illustrated in a series of maps and tables, are presented in NREL and CEG’s white paper, Identifying Potential Markets for Behind-the-Meter Battery Energy Storage: A Survey of U.S. Demand Charges, available here.
The researchers looked at the number of commercial customers eligible for utility rate tariffs that included demand charges of $15 or more per kilowatt, an industry benchmark for identifying economic opportunities for behind-the-meter storage.
They concluded that nearly five million customers were at or above this demand charge threshold, accounting for over 25 percent of commercial customers in the United States. This represents a substantial market opportunity for behind-the-meter battery storage, which can be installed to control peak demand and lower electricity bills by reducing demand charges.
The analysis determined that economic opportunities for storage exist not only in first-mover states like Californiaand New York, but also across the Midwest, Mid-Atlantic, and Southeast. For example, tens of thousands of commercial customers in Georgia, Alabama, Kentucky, Michigan and Ohio may be subject to utility tariffs with sufficiently high demand charges to make storage a viable economic investment. Anticipated future declines in battery storage costs would enlarge the market potential in these and other states.
“With this analysis, we have identified the areas where customers have the greatest potential to benefit from investments in battery storage,” said Seth Mullendore, coauthor of the paper and a project director at CEG. “Utilities know where these opportunities exist, and now the rest of us have that information too.”
Nearly all medium to large commercial customers in every state are subject to utility demand charges, yet customers often do not understand how these charges are structured or accounted for. (For more information about demand charges, see the accompanying fact sheet here).
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