In recent months, Hawaii Electric Company’s (HECO) 2016 Customer Self Supply program (DER) is becoming much more attractive as the costs of Battery Energy Storage Systems (BESS) decrease, and technology and chemistry advances make the systems more reliable and efficient. This is great news for consumers in Hawaii who have pulled back on installing solar systems because of the expense of adding an energy storage system.

In 2016 HECO changed its immensely popular Net Energy Meter program (excess energy produced during the solar day was “stored” by HECO and returned at night or rainy days when needed) and instead offered two different programs: Customer Grid Supply (CGS) and Customer Self Supply (CSS). Under the CGS program excess energy was still “banked” by HECO, and when used, the customer was given a $0.15 per kWh credit ($.17 on neighbor islands). This program was limited to 5MW and was quickly subscribed leaving only the CSS program, which did not allow export.

The result was that solar PV systems needed to be sized so that there would be no excess energy exported to the grid. In many instances that meant that the systems were very small, covering only a small percentage of the load.

The alternative, the addition of a storage component (usually batteries) to capture excess energy for later use, significantly increased the cost of the system. These PV systems with storage, also known as microgrids, are localized grids that can, if necessary, disconnect from the utility grid to operate autonomously. Because they are able to operate while the main grid is down, microgrids can strengthen grid resilience and help mitigate grid disturbances as well as function as a grid resource for faster system response and recovery. ¹

Microgrids support a flexible and efficient electric grid by enabling the integration of growing deployment of distributive energy resources like we are experiencing in Hawaii. Simply put, when PV system production exceeds the customer’s demand, the surplus energy must be redirected to a battery bank by a charge controller. Later when the demand exceeds the system output, which is typically in the evening, the stored energy is used.

There are a number of advantages to adding a storage component to a PV system — beyond any support or stability it may offer the utility:

1) The battery bank allows the system to operate as a backup power supply if there is an electric utility service interruption. It is also possible to use the battery bank for loads that must run without interruption, such as a computer server running a critical application.

2) It is the only viable option if there are plans to eventually go off the grid. A stand-alone PV system with no means of storage can’t provide electricity effectively due to the shifting output and lack of production at night.

3) Owners of electric vehicles can charge their car from the battery bank if available, effectively gaining solar-powered transportation.

4) In specific cases where electric rates are very high during peak demand, energy stored in a battery bank can be used instead to maximize savings.

5) When HECO offers time-of-use rates across their service areas, expected to roll out in several months, the BESS can be charged when rates are lowest and discharged when highest. Time-of-use rates means that the electric utility charges a higher price per kWh on peak hours and less during non-peak hours.

In short, although initially more costly, a PV system that uses battery backup provides better possibilities in terms of potential savings and backup power. With emerging storage solutions that use lithium-ion batteries and have autonomous capabilities, battery backup may become a more attractive option by reducing costs and complexity.

1 Source: energy.gov Office of Electricity Delivery and Energy Reliability