Why Is Off-Grid Solar Becoming Increasingly Important?

Grid-interactive system with energy storage installed by Gulf South Solar, Louisiana

By: Mark Cerasuolo, OutBack Power

Solar provided about 22% of the U.S. utility-scale electricity production added to the grid in 2013. If hydroelectric is added to the “renewables” definition then renewables have been providing about 12% of all electricity production in the U.S. since 2012. In energy-challenged places such as California, renewables are mandated to provide a much greater share — the state is on-track to meet a legislature-imposed requirement that 33% of electricity be supplied by renewables by 2020.

Off-grid solar is becoming an increasingly important as solar, in general, grows because these systems possess abilities grid-tied solar doesn’t. Most significantly, off-grid systems can store renewably-generated electricity for use later, instead of requiring continuous consumption or selling-back in the “use it or lose it” scenario presented by simple grid-tied PV/solar schemes.

Storage is the fulcrum over how renewable energy’s leverage will play out as it moves from a single to double-digit contribution to the total electricity mix. On one side of the balance are the utilities. For them, the ability to cost-effectively store renewably-generated electricity is critical since it is a variable, but inconsistent supply with which to meet steady-state power demand. “Clouds so swift, the rain moving in,” as Bob Dylan once sang, is an apt description of the daily technical challenges facing solar electricity harvesting. The solution isn’t simply “blowing in the wind” because that too has its ups and downs.

For example, California has made commendable progress toward its goal by currently generating half (15%) of its electricity from renewable sources. But that’s actually about 40% more renewably-generated electricity than the state’s grid — in its current technological state — can actually use, according to statewide system operator CAL-ISO. Grid instability occurs when greater amounts of inherently-variable renewable sources are present and, when interrupted, require the rest of the grid’s power resources to make up the deficit. Because those sources include coal, nuclear, gas and other fossil-fuel plants that are comparatively inelastic in their ability to meet sudden spikes in demand, the result is grid instability when abundant renewably-generated electricity suddenly disappears.

For this reason alone, it’s no wonder that a variety of industry intelligence sources cite utility power storage as one of the fastest-growing PV-related investment areas. But energy storage on a non-utility scale is the other side of renewable energy’s leverage in influencing future electricity distribution scenarios. While storage gives utilities the means to offset grid instability by more smoothly blending the mix of renewable and fossil sources, it also provides the same benefits to homeowners and other system owners on a more micro-grid or even “nano-grid” scale. It enables them to offset grid consumption around the clock by drawing on locally stored electricity harvested previously.

The economics for small local system owners work out as lead-acid batteries mature to the point of maintenance-free operation and more advanced chemistries yielding longer operational life, making it possible for energy storage to take its place over the long-term solar payback equation for home and business owners. Joining today’s most popular batteries through their growing practicality and affordability are more exotic types including aqueous, flow and lithium-ion technologies. Industry sources predict much more widespread adoption over the next half decade as prices drop and popularity surges.

The emergence of local energy storage is all thanks to proven off-grid technology, through inverters and other power electronics that can intelligently charge and maintain batteries. Cost-reduced versions incorporating grid-interactive design (transfer switching, interconnects and other circuitry) have placed this technology on a more competitive level with simple grid-tied “daytime only” inverters and within the reach of new system buyers. Newer types include operating modes that can “zero out” the grid, effectively keeping the homeowner off-grid whenever possible and drawing on the grid only to meet peak needs or charge batteries when renewable sources are insufficient.

Advanced grid-interactive system for EV charging, Germany

Such systems might never sell-back to the utility, devoting all their functionality to offsetting usage through self-consumption. And most tellingly, these new-technology systems may never have to sell-back to achieve payback, enabling their owners to become true “grid defectors,” cutting the utility wires entirely. Just as this decade has seen savvy consumers “cutting the cord” on cable and satellite TV for online entertainment sources, the next one likely will see a generation successful at off-grid living in urban and suburban settings with their own micro and nano-grids made possible by smarter system electronics and affordable local energy storage.

An indicator of this trend is the fact that the average size of a residential system is inexorably moving upwards. While an 8-kW inverter seemed oversized for home needs just a few years ago, this and larger sizes (and stacked systems) are becoming increasingly “mainstream” as residential users look to move beyond simply selling back and actually living off their renewable system. Solar is scaling-up at the local level to do more than supplement other energy sources. The race is on as to whether utilities or their customers will master energy storage first. For the utilities, the stakes are high: Preventing the much publicized “death spiral” by which their customers increasingly defect as adding more renewables raises the prices for those who remain on-grid.

Ironically, in the early days of nuclear power the technology was promoted with the promise that atomic plants would result in electricity being “too cheap to meter.” Several generations later, solar energy might actually be at the threshold of delivering on that promise as the utility/customer dynamics play out through more widespread adaptation of off-grid technology and energy storage.