How Distributed Power Production and Storage Is Changing

We are witnessing a new paradigm in energy production and usage akin to the transition from gas lamps and candles to electric lightbulbs and public utilities. In the late 1800’s building owners installed coal-powered dynamos in basements to provide electricity to the tenants above. Tomorrow, solar power panels on rooftops will provide power for the people below. Two technologies are coalescing to lead to this outcome: advanced battery storage and solar power production. “A distributed energy future is coming.”

Ramez Naam, computer scientist, futurist, and award-winning author, wrote in April, 2015, “Storage of electricity in large quantities is reaching an inflection point, poised to give a big boost to renewables, to disrupt business models across the electrical industry, and to tap into a market that will eventually top many of tens of billions of dollars per year, and trillions of dollars cumulatively over the coming decades…going from being a novelty, to being suddenly economically extremely sensible. That, in turn, is kicking off a virtuous cycle of new markets opening, new scale, further declining costs, and additional markets opening.”


“Batteries serve as the connecting piece between multiple energy generation sources…Home batteries can recharge nightly during the lowest-demand, lowest-price periods. Then, during the day, a home might run solely from battery power and rooftop solar. If there is an excess of energy available on the battery, the homeowner might even sell some energy back to the grid. The homeowner’s electric vehicle (battery on wheels) also charges overnight, and could sell some excess energy back onto the grid during peak energy usage periods while plugged in at the office,” said Jeremy Welch, cofounder @WeChrg.

In February of 2015, Bloomberg reported on Tesla’s plans for home batteries, stating, “Combining solar panels with large, efficient batteries could allow some homeowners to avoid buying electricity from utilities.” That doesn’t necessarily mean being “off the grid”. There are currently advantages and disadvantages to being on and off the grid.

If your home is still connected to utilities, you are eligible for payment for any energy your home provides back to the grid, but when there is a power outage, your solar panels no longer feed your house. This is to protect line workers who may get shocked from your solar panels backflowing into the lines. However, if you have home batteries those will still work.

Overall I see the trend going toward more solar and less fossil-fuels. The problem with big power plants is that a third of the energy is lost in transmission, but part of the reason we need transmission is because we don’t have good capacitors/batteries. By creating storage capacity at home, we can get power from a variety of sources and be less dependent on just one.

This is one possible scenario: each home/business/car becomes a node like a host on a network. Power can be created and shared between nodes at a metered rate. Cars with solar panels might bring home power to add to their home when they get home. Houses soaking up solar all day might feed their car when they get home. Those still connected to a power company can share out unused power.

“Battery storage and next-generation compressed air are right on the edge of the prices where it becomes profitable to arbitrage shifting electricity prices – filling up batteries with cheap power (from night time sources, abundant wind or solar, or other), and using that stored energy rather than peak priced electricity from natural gas peakers.This arbitrage can happen at either the grid edge (the home or business) or as part of the grid itself. Either way, it taps into a market of potentially 100s of thousands of MWh in the US alone,” said Ramez Naam.

But how expensive will home batteries be? “A widely reported study at Nature Climate Change finds that, since 2005, electric vehicle battery costs have plunged faster than almost anyone projected, and are now below most forecasts for the year 2020…It’s now in the realm of possibility that we’ll see $100 / kwh lithium-ion batteries in electric vehicles by 2020, with some speculating that Tesla’s ‘gigafactory’ will push into sufficient scale to achieve that.”

Solar Power

In Western Australia there are a lot of sunny days, so domestic rooftop solar systems are very commonplace now. In California, companies like SolarCity are installing solar panels and guaranteeing you’ll pay less to them than to your electricity provider.

What utility companies fear is that there will be a tipping point where they the amount of people using solar panels during peak periods will begin to seriously impact their ability to be profitable. As more people go solar, the cost of non-solar is spread amongst the remaining non-solar users and therefore the price goes up. This will only accelerate the move to solar and exacerbate the problem.

It’s likely power utilities will get in the solar installation business, mimicking SolarCity’s model, and figure out the protocols for how cellular power networks are going to work in the future. That’s likely why they have invested (or attempted to invest) in ‘smart meters’ that can send power back and forth, turn appliances off/on, and monitor electricity usage inside the home/business better. This will enable the sharing of electricity between units in a power network more efficiently.

However, solar has it’s drawbacks in extreme situations such as during a fire. Solar panels can be a hazard to firefighting operations because the sun doesn’t have a ‘disconnect’. A collapsed roof may bring a tangle of live electrical parts down into the building and create a hazard that persists long after the fire has been suppressed. For example, when disconnected solar panels are ‘open circuit’ the voltages will rise very rapidly. You can actually arc-weld with two fully illuminated 48V panels in parallel.