A new business model that involves homebuilders partnering with energy storage system integrators is “here to stay,” Brett Simon, Senior Analyst for Storage at consulting firm Wood Mackenzie, said on Dec. 3.
“This is a model that really has only started being discussed,” he said at Greentech Media’s Energy Storage Summit in Denver, Colo.
The model involves a storage system integrator that works with a homebuilder or a real estate developer “to offer them storage systems and then ultimately that homebuilder or real estate developer is responsible for getting that system to the end customer,” Simon said.
He said that the great thing about the model is that the homebuilder “can have a new development of several dozen or hundred or even thousand homes and have them come already pre-equipped with storage and potentially a suite of other technologies – solar, some advanced thermostats, some other load control assets, maybe a few smart devices in the homes as well.”
Simon said that this is a “really interesting way for a storage developer to sell a large volume of product” and it is also a “great way for a homebuilder to offer something different and potentially have an upsell to their customers, saying, ‘don’t you want to live in a green home, or an efficient home’ or whatever terminology they want to use.”
He noted that this is a model where a few companies “have dived in head first and really had some pretty interesting early stage successes with it.” One leading example is Germany-based sonnen, which offers a residential storage product in the U.S.
Details on sonnen partnerships
In 2017, sonnen and Mandalay Homes disclosed that they were partnering to build clean energy communities in Arizona. A master planned community in Prescott Valley, Ariz., will include the Mandalay “Discovery Home.”
The eco-homes in the Jasper, Ariz., community will be capable of communicating with each other to form a hive of systems, sonnen said. The hive will act as an intelligent network of energy storage systems that collaborate to form a virtual power plant, sonnen said.
In late 2018, sonnen and Pearl Homes unveiled a partnership to develop homes in the small fishing village of Cortez, Fla. The community is comprised of 148 homes pursuing LEED Platinum certification.
Each home will be equipped with rooftop solar panels, a sonnen energy storage system, a smart thermostat and an EV charger -- all controlled through a sonnen energy automation and artificial intelligence software platform.
The community represents the first time an energy storage system has worked in concert with Google Home in a master-planned development, capable of maximizing the intelligent use of each household's renewable energy, sonnen said.
And, more recently, Rocky Mountain Power, a Berkshire Hathaway Energy utility, in August 2019 disclosed that it is working with Sonnen and the Wasatch Group, a real estate company, on an apartment complex in Herriman, Utah, that will include 600 batteries capable of storing 12.6 megawatt-hours produced by solar panels totaling 5.2 megawatts.
RMP will manage the energy storage as a virtual power plant to provide emergency back-up power, daily management of peak energy use and demand response.
When the Soleil Lofts project is completed late next year, it will be the largest residential battery demand response facility in the United States. The first wave of residents will start moving in September.
RMP expects the battery demand response project will cost $34.3 million, not counting the solar panels. The batteries are expected to cost $12 million.
RMP is contributing $3.3 million to the battery project, which the Utah Public Service Commission approved in late June.
The project will allow RMP to study the value of having behind-the-meter grid-optimized solar and battery storage interconnected to its distribution system, the PSC said in its decision. It will also help the utility evaluate rate design options for customers with batteries and allow RMP to prepare for expected larger-scale deployment of battery storage technology integrated onto the distribution system, according to the commission.
Meanwhile, in July 2019, Georgia Power and PulteGroup marked the opening of Atlanta’s first “Smart Neighborhood” at PulteGroup’s development in Atlanta’s Upper West Side.
The first 46 townhomes developed will be a part of the Georgia Power Smart Neighborhood, where each technology-enhanced home will be served by the utility and supplemented by rooftop solar installations and in-home battery energy storage.
Benefits to the grid
Simon said that a “really great aspect” of projects involving homebuilders and storage system integrators “isn’t just to offer those systems to provide benefits to the end customer, but also the grid. Because the long-term goal of all these projects is to say, hey, we have this group of homes…that already come equipped with storage and we could use them as a networked set of assets to provide capacity or ancillary services or to cut system peak, what have you, to the grid. And so that’s this long-term goal – that you could already have many systems that can be utilized for that end.”
He pointed out that these types of projects are being pursued in a diversity of states. “These are vastly different states. We’re not just talking about the Northeast and California and Hawaii. We’re talking about states as varied as Georgia and New Mexico and Louisiana.”
Simon also said that California’s rooftop solar mandate is another area where the homebuilder channel could come into play.
Starting in 2020, new homes in the state – unless they can obtain certain exemptions – will be required to have solar PV installed on them. “This is going to have knock on effects for the residential storage market,” Simon said.
“This is a really interesting opportunity because now you have new homes that are going to have to have solar. What better to do than when these homes are already getting built to design having storage built into them as well?”
A recent report provided by Wood Mackenzie Power & Renewables in conjunction with the Energy Storage Association said that the power shutoffs over the past few months in California will act as significant drivers of growth in residential storage into 2020 and beyond as more customers explore solar-plus-storage for backup power.
“Installers have already shared anecdotes about growing residential storage volumes in California, and we expect a large uptick early next year as marketing efforts for solar-plus-storage started earlier this year bear fruit. We expect roughly 1 in 5 new residential solar PV systems installed in 2020 to be paired with storage,” Simon said when the report was released earlier this month.