Incorporating energy storage into pv system design

1. EPRI/Sandia PV Systems Symposium, May 2016
Kevin Christy
Incorporating Energy Storage into
PV System Design

2. P. 2 | SunEdison Confidential
Overview
 New & evolving segment
 Interconnection issues
 Retrofitting complications
 Financing issues for storage
 Operational issues for storage

3. P. 3 | SunEdison Confidential
Interconnection issues-new systems
 If batteries are charged with DC
energy from the PV system,
then the BESS is “an
enhancement of the renewable
generator” and can export
 If batteries are charged with AC
energy from the grid, then the
BESS is considered a non-NEM
device and cannot export
 Specific interconnection
application guidelines must be
followed
SCE external memorandum
dated 7/22/13 Re: Battery-
Backed Storage System and
Net Metering Eligibility

4. P. 4 | SunEdison Confidential
 Can only address one retrofit system with which I’m familiar:
• Existing NEM PV system in SCE territory
• Addition of non-export BESS after the fact
 Required shared interconnect facility and approval &
cooperation of PV system owner and installer
 Utility will need to be satisfied of non-export controls on BESS
Interconnection issues-retrofit

5. Storage Financing Issues
Moving from Balance Sheet to Non-Recourse Finance

6. P. 6 | SunEdison Confidential
Foundational Issue: Joint Financeability
 Will need to find financier willing to finance both solar and
storage at acceptable cost of capital
 May need Joint Facilities Agreement where
equipment/agreements are shared (e.g., interconnection) to
allow solar to go to one financier and storage to go to another
 A number of experienced solar financiers are expressing
interest in financing storage, but it is very early days for non-
recourse storage finance

7. P. 7 | SunEdison Confidential
Supplier Bankability
 Battery & BMS provider
 Bidirectional inverter provider
 Integrator
 Warranty provider
 DCR/Fleet management software providers
 Operator & Operations schemes
 Line up your IE reports

8. P. 8 | SunEdison Confidential
Degradation of Li-ion Batteries
 Note DC/AC conversion losses in battery kWh nameplate rating
 Long-term financing question: how long will these last?
 Predictable rate of degradation?
 Can performance-based agreements be written to reflect
degradation?
Source: NREL, Predictive Models of Li-ion Battery Lifetime, Sept 2014

9. P. 9 | SunEdison Confidential
Methods of Managing Degradation Impacts
1. Oversize
• Chevy Volt depth of discharge “buffer” experience: 1st gen vs. 2nd
gen
• Expect stationary manufacturers to adopt this approach as costs
decrease & energy density increases
2. Capacity Maintenance
• Pay up front/over time for beefed up warranty
3. Underwrite to Expected Degradation
• PV experience:
̶ Straightline to 80% warranty, increased to 90%
̶ Observed degradation, tighter banding
• Would require suppliers to back linear warranties
• Over time, underwrite to experience vs. warranty

10. P. 10 | SunEdison Confidential
Independent Performance Estimates?
 BESS systems have no industry-standard PVsyst equivalent—
this is a major hamstring to modeling & financing efficiency

11. P. 11 | SunEdison Confidential
Storage Modeling Efforts in Flight
 NREL System Advisor Model
(SAM) PV + storage module
 Flow battery module in
development
 EPRI Energy Storage
Valuation Tool
 StorageVET successor tool in
development for 2nd half 2016
release
 Developed under guidance of
the Energy Storage
Integration Council (ESIC)

12. P. 12 | SunEdison Confidential
Key Parameters for Storage Performance Modeling
 Ratio of DC/AC capacity (kWh-equivalent)
 Round trip conversion efficiencies
 Parasitic losses (HVAC, tare)
 Depth-of-discharge limits
 Operating temperature profiles
 Cycle/year profile of application
 Availability
 For flow:
• Additional pump parasitic losses
• Electrolyte consumption

13. P. 13 | SunEdison Confidential
Contracted vs. Uncontracted Revenue
 Only contracted revenue from creditworthy counterparties can
get the lowest cost of capital
Source: RMI

14. P. 14 | SunEdison Confidential
ITC Eligibility for BESS + PV
 BESS eligible for ITC as long as the batteries are charged by
the solar energy (does not require direct DC coupling)
 Proportional loss of ITC if up to 25% of the energy used to
charge the batteries comes from the grid
 Cliff at 25%--anything more and you lose the ITC
 Expect financiers to want solid guarantees that grid energy will
not be used to charge batteries
Note: Conclusions based on private letter rulings, final rules not formed and released.

15. P. 15 | SunEdison Confidential
O&M Issues for Solar + Storage
 BESS maintenance is more time-sensitive:
• Brittle nature of demand charge management
• LDs associated with capacity/RA contracts
• Consider spares
• Consider response time commitments
 Operations will be more hands on:
• Closer monitoring of battery status
• Faster resolution of comm outages
• Need to be able to respond to fleet dispatch orders under
capacity/RA or frequency regulation
 May need backup providers:
• Software for DCR, fleet management
• Operations provider

16. Questions?