SolarCity taps Tesla battery tech for new energy storage biz

SolarCity is launching an energy storage system that will use management software and Tesla's battery technology to help businesses reduce their electricity bills and keep the lights on during power outages. 

The move illustrates a shift within the power industry, specifically renewables, to offer a suite of products, including energy storage in a bid to distribute risk and become more competitive.

The so-called DemandLogic system uses learning software that automatically discharges stored energy to help commercial customers increase their savings. The stored energy can be used to power all operations including IT functions, security systems, cash registers and other systems that are critical to businesses.

The electric bills of big commercial and industrial customers—like data centers—include energy and "peak demand" charges. Those demand charges, which are based on the maximum amount of electricity used at a specific point in time, are often the biggest piece, or at least the costliest, of a commercial customer's utility bill. 

Solar power can offset the overall amount of electricity used. But if a company's peak electricity demand is still high during the day, they can be hit with high demand charges. The system SolarCity is selling will allow commercial customers to tap into stored energy during those peak demand times. 

“Utilities have altered their rate structures such that demand charges are rising faster than overall energy rates, and businesses are bearing the bulk of those increases,” said Peter Rive, SolarCity’s chief technology officer and chief operations officer.

The energy storage systems are only available to commercial customers. The storage systems are available to commercial solar power customers through 10-year service agreements including monthly payments with no upfront cost required.  

SolarCity started a a residential pilot plan a few years ago with 200 customers in California and are installing those at a rate of about 30 per month, according to SolarCity spokesperson. The company plans to work with another group following the initial pilot. 

Solarcity and Tesla Motors' ties run deep. Tesla CEO Elon Musk is on SolarCity's board of directors. And the two companies have been working on energy storage since 2010. SolarCity announced back in September 2010 it was teaming up with Tesla Motors and the University of California, Berkeley to research advanced grid-interactive distributed photovoltaic and storage. SolarCity said it would receive $800,000, and UC-Berkely would get $900,000, as part of a grant from the California Public Utilities for the California Solar Initiative (CSI) Research Development, Deployment and Demonstration program.

SunPower has also dipped its toe into the energy storage market. In May, the company announced plans to roll out its first energy storage product, possibly lithium-ion batteries. SunPower has delved into energy storage before, carrying out pilot projects and working with different technologies.

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