As solar installations continue to rise across the country, people are thinking about how solar can best benefit low-income and underserved communities. A report recently released by the Clean Energy Group looks into how a combination of solar plus battery storage can benefit both building owners and tenants of multifamily affordable housing units.
The analysis compares the economic benefits of installing a solar photovoltaic (PV) system coupled with battery storage against a stand-alone solar installation on nine affordable housing units in California. Fifteen-minute interval electricity data from the buildings’ common spaces was used to to model the potential bill savings of both options under current rate structures.
Adding battery storage to solar installed on affordable housing units can result in significant savings to buildings owners and tenants
The study found that solar+storage installations can result in significant savings to building owners beyond what can be achieved with solar-only installations if the owners have to pay “demand charges.” These charges are different from the charges associated with the kilowatt hours actually consumed, which can be offset by solar installations through net energy metering (NEM).
Demand charges are tied to the highest level of electricity demand over a billing period and are not usually eliminated by adding solar alone. This is because a building may need to draw large amounts of power when the sun is not shining. The analysis showed that the addition of battery storage can reduce or eliminate demand charges, which results in significant bill savings to the building owner.
Solar + storage can also benefit the tenants of affordable housing units
The study demonstrates that adding battery storage to a solar PV system can help owners of affordable housing units save money. But what about the tenants of these buildings? California residential rates do not have demand charges, so what’s in it for them?
If building owners can save money using storage, a greater percentage of the solar that would be installed to offset common area load can be used to instead offset residents’ electricity bills. Solar+storage installations can help make buildings more safe and resilient during extreme weather events or other emergencies that bring down the power grid. Finally, coupling solar and storage helps preserve the value of solar as we move away from net metering and towards time-of-use rates that will charge more for electricity when solar PV resources are not generating power.
There is much left to do to make sure the benefits of solar PV reach the communities that are most in need of a clean energy transition. Policies must be in place to make sure affordable housing units are in good physical shape to host solar systems and that residents of these buildings see direct bill savings as a result of going solar. Coupling battery storage with solar can reduce or eliminate demand charges which directly benefits building owners, but if done the right way, these benefits can flow to residents as well.