SolarCity has a reputation as an innovator. It was the first solar company to offer customers financing for little or no upfront costs, and buyers have responded enthusiastically. Now the company wants to sell its new turnkey microgrids-as-a-service to cities, hospitals, military bases, island communities and others in remote areas.
It appears to be a solid strategy in a number of ways. The customer pool SolarCity has targeted is certainly the right one, and the company’s experience with distributed solar, energy storage and related systems is indisputable.
What are the advantages?
SolarCity spokesman Jonathan Bass told Greentech Media the usual plan for developing a microgrid meant working with a major engineering company and spending a lot of money, or finding the right vendors and hiring someone else to make it. Bass said SolarCity’s technique was much more direct and less expensive.
“In addition to providing the software and integration, similar to our other products, we will provide a financing option and O&M,” Bass explained. He added that the company is working on distributed generation projects with three California cities and has built a microgrid.
Utilities are warming up to microgrids too
Revenues for global utility distribution microgrids (UDM) are expected to climb from $2.4 billion in 2014 to $5.8 billion in 2023, according to a report from Navigant Research. Utility microgrids are now a fraction of the microgrid market, but Navigant believes utility owned and operated microgrids are seen as “the next logical extension” of their smart grid deployments. And, as others have observed, the utility interest could also be seen as an expression of a “If you can’t beat ‘em, join ‘em” approach.
Duke Energy, a heavyweight in the U.S. utility industry, wants to come up with a way to develop interoperability between equipment operating at the grid’s edge. Exploring the potential for microgrids is expected to be a major – if later – element of that massive undertaking. Duke has been actively recruiting partners for what it refers to as its "Coalition of the Willing." Among them are Council Lead Partners Cisco, GE, Alstom Grid, Itron, S&C Electric and Schneider Electric, as well as Associate Partners ABB and Elster.
These partners represent a variety of background and expertise in microgrids and related technologies. For example:
- GE is working on a Department of Energy (DOE) funded project with the National Renewable Energy Laboratory and Clarkson University to develop an Enhanced Microgrid Control System for a New York village that is subjected to ice storms.
- Alstom is doing the research, design and development project for a microgrid at the Philadelphia Navy Yard, also supported in part by the DOE.
- S&C Electric designs and builds smart microgrids as one of its services.
Council Associate Partner Black & Veatch believes in microgrid technology so much that it installed a microgrid in its Rodman Innovation Pavilion at its World Headquarters in Overland Park, Kansas. This 30,000-square-foot building features a microturbine, solar PV, geothermal technology and battery storage. Take a video tour >>
Why should cities care?
Microgrids are increasingly seen as solutions to problems that communities everywhere face -- from providing power outage mitigation and protection to serving remote locations where grid connections are impractical. They also are used as emergency backup power for critical infrastructure.
Doug Peeples is a Portland, Oregon-based writer specializing in technology and energy. Follow @smartccouncil on Twitter.