Hawaii Solar Blog

FERC Rules Pave the Way for Solar Energy Storage

Photovoltaic energy has grown significantly from its humble beginnings. With the cumulative U.S. capacity of distributed solar forecast to double between mid-2013 and 2015, federal regulators recently adjusted the rules to make connecting renewable resources to the grid even easier.

On November 22, 2013, the Federal Energy Regulatory Commission (FERC) passed Order 792, expanding its scope of the Small Generator Interconnection Agreements and Procedures, which sets standard rules for interconnecting sources of energy that are 20 MW or less, to also include energy storage via solar battery back-up systems.

FERC Order 784, which was issued in July and went into effect in November, essentially allows enterprises other than public utility companies to sell “ancillary services,” power sources that can be tapped quickly in times of short-term electrical imbalance.

Why are these new orders significant to the solar industry? Combined, orders 784 and 792 open the floodgates for the increasing importance of energy storage as part of the electric grid. Over the past few years, severe natural disasters like Hurricane Sandy and its electrical system aftermath, have prompted desire for a smarter, more resilient energy infrastructure.

Regulators never really specified guidelines for energy storage in the past, making this option seem risky to both utilities and investors. Now, they have “[addressed] energy storage by creating reporting mechanisms to track the installation, operations and maintenance costs for energy storage,” according to the Electricity Storage Association (ESA). “Enabling this information to be available to regulators will ensure transparency as more projects are deployed.”

This means the solar industry can now use energy storage to challenge gas and coal power, which public utilities traditionally use for ancillary services. In addition, utilities must consider the speed and accuracy of the power source without being discriminatory.

In October, California passed the nation’s first energy storage requirement that orders the state’s three main power companies to collectively obtain 1,325 MW of energy storage capacity by 2020 with a requirement of 200 MW by the end of next year.

As reported by The Motley Fool, an IMS Research report estimates the global energy storage market will increase “from approximately $200 million in 2012 to $19 billion by 2017.” With Hawaii’s isolation and costly dependence on diesel fuel, energy storage is a much-needed solution to the greener, more reliable energy grid of the future.

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