In January of this year, Utah utility Rocky Mountain Power launched WattSmart Batteries, a new battery energy storage retrofit program for its 50,000 customers with existing on-site solar arrays. The program– with an eventual goal of aggregating 100 megawatts (MW) of dispatchable energy storage - offers payments to solar customers who add a battery system and allow the utility to control it. Payments include an upfront enrollment incentive of $600 per kilowatt (kW) for a four-year commitment, plus a participation incentive of $15 per kW per year. The customer thus gets a subsidized battery which is designed to provide back-up power in the event of an outage (although, per the contract terms, Rocky Mountain Power does not guarantee that the battery will be charged or available during all system outages. The utility always leaves some energy in the battery for back-up, but since they don’t actually own the battery, they don’t guarantee it).
This type of coordinated distributed energy resource (DER) program offers enormous potential to utilities driving towards carbon reduction goals while coping with increasing levels of variable renewable energy resources on their systems. Variants of WattSmart Batteries are likely to be broadly replicated both in the U.S., and globally, so it’s worth understanding how it came about.
Building on the Soleil Lofts experience: WattSmart Batteries follows on the heels of the successful Soleil Lofts project. This undertaking that was launched just over two years ago was a joint effort between real estate developer The Wasatch Group, energy storage company sonnen (a subsidiary of Shell) and Rocky Mountain Power. The Soleil Lofts apartment complex was furnished with solar arrays and 600 high-end sonnen ecoLinx batteries, resulting in a 5 MW and 12.6 megawatt hour (MWh) virtual power plant controlled by specially designed sonnen software integrated into Rocky Mountain Power’s control room systems. Based on the success of that endeavor, and the optionality created by the existing software and program design, the next logical step was to expand the effort.
That expansion involved the participation of Rocky Mountain Power, sonnen (provider of the batteries and the aggregation software), and solar companies such as ES Solar (the largest residential solar provider in Utah) who are responsible for the marketing, sales, and installation), as well as the Utah Public Service Commission (the regulatory body that determines whether Rocky Mountain Power will earn a rate of return on its investment).
Creating the grid of the future takes work and coordination: In an interview, Blake Richetta – Chairman and CEO of sonnen, Inc. commented that this new retrofit program represented the culmination of “years of work and tons of talk.” He expressed a general frustration with the pace of change in other utility service territories, noting “The grid of the future is supposed to be more responsive, and digitalized, but to date it’s been mostly half measures.” Other dispatchable virtual power plants have been announced, he asserted, but none have yet been developed in which the utility is currently controlling the on-site batteries on a daily basis.
By contrast, Richetta noted, Rocky Mountain Power has moved proactively to create a distributed Battery Grid Management System (BGMS ), and the WattSmart program is well underway. Hundreds of battery systems have already been installed and are being dispatched by the utility on a daily basis. In addition, over a thousand additional customers sit in the WattSmart Battery program queue, driven largely by the efforts of ES Solar, the largest residential solar installer in Utah. Richetta commented on the significance of ES Solar’s commitment, “you’ve got a major solar contractor saying ‘we are changing our business model and abandoning the idea of grid independence to create the grid of the future requiring collaboration with the utility.’ They’re selling this idea that if you have solar, add a battery.”
A Day In The Life
The technology is slightly different than the more expensive high-end 7.2 kW/20 kWh ecoLinx system used in Soleil Lofts with its 15,000 cycles and a 25-year wrap-around warranty. Instead, the battery deployed in the WattSmart Battery program is primarily using the sonnenCore, a relatively affordable sonnen lithium iron phosphate 4.8 kW/10 kWh battery that offers 10,000 cycles and is covered by a 10-year warranty. Cost-effectiveness is a key part of the current value proposition. Between the utility incentive and the federal Investment Tax Incentive (applicable as long as the battery is charged by more than 75% solar energy) the net cost to a WattSmart customer can be around $5,000 (though cost can vary greatly depending on the specifics of each individual install, due to location of the battery and electric panel).
sonnen’s main contribution is the software and program management. While the batteries today are furnished by sonnen, other vendors can also participate in WattSmart and be managed by the BGMS if they can meet Rocky Mountain Power’s program performance and safety standards (after all, these are going into people’s homes). The batteries need to offer a minimum of 7,500 cycles, be able to dispatch every day, and respond within 50 seconds.
Richetta emphasized that teamwork was absolutely critical in achieving the successful outcome to date. He commented that the essential question to be answered is how society can transition to higher levels of clean energy “without creating spiraling upward costs.” On the customer side of the equation, the conclusion was that “you need distributed nodes and intelligent integration.”
The path to decarbonization will involve assets on both sides of the meter: In a recent interview, Bill Comeau, Rocky Mountain Power’s VP of Customer Experience & Innovation emphasized that while WattSmart Batteries is important and path-breaking, it’s also part of a larger strategy. Parent company PacifiCorp is on the path to Destination Net Zero, having cut emissions by 20% relative to 2005 levels as of 2020, with future goals of 74% by 2030 and 98% by 2050.
Emissions - on the way down
To help meet those targets, Comeau stated “We need a grid that will allow us to efficiently integrate large amounts of renewables.” To help facilitate that outcome, Rocky Mountain Power plans to install 682 MW of batteries over the next five years, with the distributed WattSmart Batteries as one piece of that strategy.
He and the sonnen team established the fundamental architecture with the original Soleil Lofts project so that it could eventually support an expanded program that would allow more customers to participate. “It was built to be an open innovation platform. We will continue to innovate and it will continue to evolve.”
Comeau noted that while utilities normally try to use technologies that are tried and true, and well-proven, “In this case, we found there wasn’t a solution, so we had to innovate.” From the start, the focus was on increasing optionality and extending the capability of the aggregated storage assets to respond to multiple use cases. Thus, the batteries can be marshalled to respond to the larger bulk power needs of the Western Grid, while also performing daily load shaping - frequently shifting solar output from mid-day into the evening hours and addressing the Western energy grid’s emerging “Duck Curve.” However, the biggest opportunity for the batteries is frequency response (the ability to quickly respond to variations in frequency and helping to address the intermittency associated with integration of increasing volumes of variable renewable energy resources). The batteries are auto-dispatched from the utility control room based on the hierarchy of system needs.
Rocky Mountain Power’s 50,000 solar customers currently produce an estimated 300 MW of solar. While that’s only about 10% of the utility-scale solar capacity, it was a sufficiently large enough resource to target with batteries in a retrofit program. However, many customers traditionally tend to think of solar plus storage as a strategy to get away from the utility, rather than partner up with them. Comeau indicated that the biggest challenge was to change that perception, and “for customers to get comfortable with the utility using the battery or the greater benefit of the electric grid. We had to create trust through partnerships.”
Enlisting effective allies: The most effective strategy to create that trust was the development of an outreach effort to Utah’s solar industry. Fortunately, ES Solar - Utah’s largest residential rooftop outfit – expressed interest and had an internal champion to promote the initiative. Nic Evans, Vice President of Commercial, had done much of the on-the-ground work on Soleil Lofts while working with a former employer, so he was quite familiar with the concept and the other project partners.
In a conversation, Evans commented that he had been intrigued with the idea of taking the Soleil Loft concept to the next level. “I thought, what if we could achieve a similar outcome with smaller batteries as a hive?” That could work, he thought, but it would require a redesign as well as a complete re-think of the entire ES solar business. A company focused on selling and installing stand-alone solar would now have to develop a new message and value proposition. To further add complexity, it would not only focus on the value of a combined solar and storage system, but also how the batteries would be operated remotely by the utility in exchange for new payment streams.
Evans was able to get internal management alignment, but that was only the first step. Once everyone was on board, the sales team had to become familiar with the product, explain the benefits to the customer, and ultimately close the deals. At the same time, field personnel had to learn how to install batteries, integrate them with existing solar systems, and connect them via wireless to the sonnen-RMP BGMS network. To address the inherent complexities of this effort, five sonnen technicians accompany the ES Solar teams on the ground.
Evans commented that ES Solar is also building for future optionality, in particular the coming wave of electric vehicles. “Everybody wants the whole package, he said, “so we have a SolarEdge inverter that has an EV charging option as well. We’re pre-wiring because we know that they’re going to want it down the road.”
What about the regulatory element? After all, those incentives have to be approved and the utility is seeking a return on its investment. Comeau indicated that getting the initial Soleil Lofts concept and associated rate recovery would not have happened without the legislature and state utility regulator support. The utility had to demonstrate that the assets could be integrated into a combined resource that could help cut costs and create a more efficient system. Once Soleil Lofts was running and the system benefits were obvious, he said “all we had to do was request expansion for the WattSmart Batteries program.”
Customers want to be part of the solution: What lessons does Comeau believe the project holds for other utilities that may be considering similar approaches? “You’ve got to go back to the partnership. It’s about industries coming together, communicating together, and thinking about where we want to go.”
As far as the customers, ES Solar’s Evans enthused, they “are all about the battery. They love seeing what has been discharged to the grid, what the battery has consumed, and how much solar is being stored. I thought we’d have more pushback with people saying, ‘I don’t want the utility taking control of my equipment.’ But people have embraced this. People are saying, ’we want to be part of it.’ For me that has been one of the greatest payoffs. People want to be part of the solution.”
