As the US solar market continues to crush growth records, this green form of energy generation has become quite popular in Texas. Especially with the government’s extension of the 30% Investment Tax Credit (ITC) through 2021, businesses are increasingly turning to solar installations with storage functionality to save big on their energy bills and their grid energy usage. It’s time you take advantage, too. Here’s how:
You might have heard the argument made: renewable energy is unreliable; the sun is—literally—not always shining and it’s almost impossible to predict the wind. While yes, renewables do suffer from intermittency, coupling your solar installation with a battery (or a Solar + Storage system) allows you 3 key advantages: you can maximize your ability to use the power generated by your panels; you gain the flexibility to Peak Shave; you can participate in voluntary 4CP curtailment. Let’s get into these last two in a little more detail.
What is Peak Shaving?
In power generation, Peak Shaving is a fancy term for “improving your load factor.” It allows you to reduce the amount of energy you have to purchase from the energy company during peak hours.
Your electrical load factor is a measure of the efficiency of your electrical energy usage. Simply put, it is an expression of how much energy was used in a time period, versus how much energy would have been used if the power had been left on during a period of peak demand. It is a useful indicator for describing your energy consumption patterns over a period of time. By reducing the amount of energy bought from a utility during peak demand hours, a business can change its load factor or Peak Shave to save on its energy bills. This will improve electric prices on future rounds of procurement.
Many utility companies have variable pricing based on tiers of demand. Naturally, pricing is typically highest during times of greatest demand, when utilities bring on the additional capacity to meet the system needs. This additional capacity (sometimes referred to as Peaker Units) tends to be less efficient, often older, and more expensive to operate. Aside from additional capacity, the higher prices incentivize customers to reduce demand, thereby cutting electrical costs.
Ways to shave:
- Reduce consumption by turning off non-essential equipment during peak hours
- Install automation (thermostat, lighting, timers)
- Install renewables (solar battery solutions)
- Generators – offer the added benefit of being able to meet the demand for some or all needs during a power outage or brownout. Generators typically have a life of approximately 15-20 years. With TX peak shaving yielding ROIs between 3-5 years, having a generator could result in utility cost savings for 10 years plus!
- Work with an energy professional to develop a custom plan of action
To maximize the impact of peak shaving, I always recommend working with an energy professional like me to develop a custom plan of action.
- What is 4CP & how does it impact you?
Think the hottest day of the summer, late afternoon – businesses are still open and many folks are getting home and adjusting their A/C to its lowest setting. During a 15-minute interval when energy loads and demand are highest, coincidental peaks are set.
During the 4 summer months – June, July, August, and September – when demand is at its highest, there’s a huge strain on the grid, and system operator ERCOT (Electric Reliability Council of Texas) experiences periods of peak demand. During these times, your peak value is recorded and used as a factor in determining transmission costs for the coming year. This is called the Four Coincidental Peaks (4CP) program.
If business owners can avoid using power when the TX market is experiencing peak demand, they can significantly impact their bill. For customers with IDR (interval data read meters), 4CP values are recorded during the 4 events each year. These 4CP events are then averaged to create a new multiplier for the (transmission cost recovery factor) TCRF, which directly impacts a customer’s transmission distribution service-related charges on your bills, also referred to as demand charges.
How to Reduce Your 4CP Energy Costs
By monitoring and controlling your energy usage and making use of an alert system (like the one customized for your business units by Power made personal) during 4CP readings, you can save big on your business’ energy bills for the entire next year! Here are a few tips for 4CP curtailment:
- Alter scheduled maintenance periods
- Coordinate shift changes
- Reduce or halt use of non-critical loads
- Automated response solutions
*work with an energy professional to develop custom curtailment program*
The Benefits of Solar + Storage Don’t Stop There
While you might think of solar storage technology as “out of your league,” the cost of this technology is rapidly declining while its efficiency is rapidly increasing. According to the National Renewable Energy Laboratory (NREL), costs for installing solar are projected to drop up to 43% by the year 2020. In addition to directly reducing your energy bill, Solar + Storage also increases your facility’s resiliency and enhances flexibility for additional financial benefit.
A solar storage system will keep your business running smoothly during temporary outages called “brownouts.” It also allows you to participate in a number of initiatives that can save you costs and/or serve as an alternative revenue stream. Such programs include: LaaR (load acting as a resource), and of course, the 4CP (Four Coincidental Peak) program, among others.
The Bottom Line
With ERCOT’s reserve margins tighter than ever before, Solar + Storage solutions are great investments that reduce your business’ energy spend, protect against outages, and reduce grid reliance on what many fear may be an overburdened electrical system in coming years.
