Residential Solar PV and Storage Platform Coming Together in California

Energy market stakeholders now recognize that certain distributed energy resources (DER) installations hosted on residential property can also deliver grid benefits to regional transmission organizations, independent system operators, and local distribution system operators (local utilities). This evolution is driving the development of software and hardware platforms. These new platforms can analyze, control, and optimize the performance of not only a DER installation at a single home, but also across an aggregated network of distributed energy storage systems, giving rise to battery-enabled virtual power plants (VPPs).

VPPs Used in New Ways

Guidehouse Research anticipates VPPs that analyze, control, and optimize a network of DER to provide grid and customer benefits will emerge as a key enabling technology for the deployment of low carbon DER. These VPP-enabled low carbon DER will include the emergence of solar PV, energy storage, microturbines, fuel cells, bidirectional EV charging (vehicle-to-grid), and other grid-interactive load control technologies. These types of systems are being deployed in Germany, where the Federal Ministry for Economic Affairs and Energy just announced the installation of the 100,000 grid-connected battery energy storage system. But in the US, the growth of residential grid-connected DER has been limited to pilot scale efforts as technology platforms and market rules have been slower to evolve.

Partnerships Create Opportunity in California

However, a recent announcement by AutoGrid and Swell Energy in California is a positive sign for the development of the type of integrated platform necessary to deliver residential DER across a VPP at scale. AutoGrid is partnering with Swell Energy to install AutoGrid’s software to manage Swell’s 35 MWh pipeline of residential energy storage projects across 2,500 homes in California as a VPP to deliver grid services. Swell provides energy storage systems to residential customers on a financed as a service basis. By allowing these storage systems to generate revenue from grid services to utilities, Swell can reduce the cost of the financed DER solutions for the homeowners.

Through its partnership with AutoGrid, Swell now can offer integrated DER to customers as well as utilities, community choice aggregators, and retail energy providers. This enables the new target customer ecosystem to bundle electricity service with energy storage, solar PV, and smart home/home energy technology. This bundled, integrated solutions strategy aligns perfectly with the residential energy and non-energy solutions framework, which is the focus of the residential portion of Guidehouse Insights’ Utility Customer Solutions research service.

Grid optimization solutions no longer need to be delivered by traditional infrastructure upgrades or equipment replacements as part of new equipment, poles, and wires projects. As these new grid management-focused DER technologies have emerged, a broader set of energy market stakeholders can now focus on providing new services and better meet customer needs, and those of the local grid.