Shave Your Electric Bill with Battery Storage and Microgrid

When we hear the words “battery backup,” most of us think of the simple way our laptop switches to battery power when it’s unplugged. We might never consider that such a system could be used for something as big as a commercial multifamily building.

However, Glenwood Management, which owns luxury apartment buildings in New York City, did make that leap. The Wall Street Journal reports that the company is upgrading nine buildings by installing 100-kilowatt battery packs that can keep elevators running and common areas lighted, and even provide extra electricity on hot days to reduce the buildings’ reliance on expensive grid power.

The cost? $500,000 for each system, a price that was reduced by 45% through state rebates.

The return? Immediate. According to the WSJ article, “The company has cut its annual electricity cost at one 396-unit high rise by 15%, saving $82,000 in one year.”

Energy: The lion’s share of operating costs

Energy expenses comprise a large share of the operating costs for commercial multifamily building owners — around 25%. Battery storage and microgrid solutions are quickly emerging as viable energy efficiency tools that could help owners of multifamily buildings and other commercial utility customers cut their energy costs by shaving monthly peak demand.

Such “shave-and-save” solutions reduce the demand charges that a utility assesses based on a customer’s monthly peak demand — and building owners see these lower charges reflected in their monthly bills. Energy storage and microgrid solutions may also help protect multifamily buildings from disruptions in energy services (such as from weather disasters like Hurricane Sandy).

[sidebar width=”300″]Battery Storage and Demand Response Rebates and Incentives

NYSERDA and Con Edison through its GreenTeam initiative offer a variety of incentives and rebates for commercial customers who implement battery storage and/or demand response programs. ETS is certified with NYSERDA and Green Team; for more information regarding these programs, please click here.

• Battery storage incentives pay customers up to $2,100 per kWh saved.
• Demand response incentives range from $6–15 per kWh saved, depending on the program.
• NYSERDA and Con Edison’s jointly offered Demand Management Program provides incentives for battery storage ($2,100 per kWh saved), demand response enablement ($800 per kWh saved), and others.

Note that there are limitations and minimum requirements for incentive programs.

In addition, NYSERDA and Con Edison are jointly administering a new Enhanced Energy Load Reduction Program. The program aims to offset the effects of the expected retirement of the Indian Point Energy Center, one of the largest electricity-generating plants in New York, by permanently cutting demand by 125 MW over the next two years.

To accomplish this goal, the program will provide financial incentives to building owners and building managers who are Con Edison electric customers and implement energy-efficiency, demand reduction, or combined heat and power solutions. Incentives will be offered for improvements such as thermal storage, battery storage, demand response enablement, building management systems, chiller/heating ventilation and air conditioning, lighting, and fuel switching. You can learn more about the incentives by contacting ETS; this PDF lists the incentives now offered in the Enhanced Energy Load Reduction Program.[/sidebar]

Battery storage

Improvements in battery storage have made this technology more accessible and affordable than ever before. In addition, incentives around New York’s Demand Management and Demand Response programs are also encouraging customers to tap these innovative ways to manage their energy usage and save money.

Players in the battery market are investing in technology that improves performance and lowers cost. More than a dozen companies are working on battery materials research. Tesla, General Electric, Green Charge Networks, and others are producing powerful battery energy storage devices for multiple purposes. As the technology improves, applications for battery storage are expanding into multiple sectors, commercial and multifamily properties among them.

Benefits of battery storage include

• reduction of peak-demand charges, which lowers monthly energy costs, resulting in increased net operating income (NOI) for building owners,
• reduction of energy costs overall through load shifting,
• integration of renewable sources of energy for storage,
• enhanced electric vehicle (EV) charging capabilities, and
• reduction in greenhouse gas emissions.

Battery storage is an attractive energy-management option for commercial and multifamily property owners for several key reasons. First, it’s a “plug-and-play” technology that’s relatively easy to implement. Battery modules are scalable and flexible. And since battery modules are the size of a server rack, it’s easy to expand modules so that they grow with your company and adapt to your building’s load profile and changing energy management needs.

Shave and save

Batteries can be used for peak shaving — to reduce your site’s energy usage during peak-demand times, which lowers the utility’s monthly charges on the demand portion of your electric bill. As part of an onsite energy storage system in a multifamily or commercial building, battery usage can shave over 30% off peak demand during primary-demand billing hours — which can reduce your utility charges by more than 15%.

But perhaps the greatest overall benefit of this dynamic technology is its role relative to the microgrid model.

The power of the microgrid

Microgrids enable buildings to work in tandem with the utility to access power, but they can also operate independently of utilities to generate, distribute, and regulate the flow of electricity to consumers. Microgrids can also be used in a grid-to-gas energy savings strategy, which can enable a building to operate “off the grid” and switch to using cleaner natural gas. The heart of a microgrid is a natural gas microturbine (a combined heat and power, or CHP, unit) such as those manufactured by Capstone, a small turbine engine (CHP) for small-scale power generation. These units allow for conversion from natural gas to power and provide a permanent hedge against rising volatile grid power costs as well as grid power outages. Furthermore, these CHP units utilize waste heat to reduce the cost of gas used in related building systems, such as domestic hot water and pool heat.

As small-scale versions of a centralized system, microgrids are specifically designed to meet commercial portfolio property owner goals. Such goals can include reliability, carbon emissions reductions, incorporation of renewable sources, cost reduction, and increased resiliency during emergencies and outages (for example, to mitigate power disruptions caused by a storm).

The advantages of a localized system are clear, but successful implementation hinges on three factors: First, participants must fully understand their property’s real energy signature, as calibrated by interval meter data that smart meters provide. Second, they must work to reduce consumption of electricity, water, and gas through conservation and physical improvements, including retrofits and upgrades for lighting, metering, and HVAC. And third, they must target onsite generation and energy storage equipment, such as CHP units and battery storage, working with a professional engineering team to select, install, and service their microgrid system.

ETS works with owners and operators to develop microgrid systems to achieve energy reduction and storage initiatives, and we qualify property owners for robust state-run programs that offer generous cash-back incentives.

Attractive incentives

In New York, significant rebates and incentives are available for commercial utility customers that implement energy storage systems. Con Edison is targeting many of its incentives toward owners and operators of commercial, industrial, and multifamily buildings. These rebates and incentives can return 30–50% of the cost of buying and installing energy storage solutions to building owners. ETS can qualify large multifamily and commercial properties for these rebates and incentives. Click here for more information.

Battery storage is among the measures that qualify for incentives under the utility’s Demand Management Program. The program will look at energy efficiency and demand-reduction projects completed prior to June 1, 2016, and projects that achieve a peak reduction of 500 kWh or more can also earn additional bonus incentives. Con Edison’s Demand Response Program, now available to commercial, industrial, and residential customers, pays customers who are able to temporarily reduce electric usage when the utility requests it.

Energy storage solutions will largely determine how we consume energy in the future, and battery technology with its numerous applications and benefits is already a dominant force in the industry. Learn more about battery storage and other energy efficiency technologies by contacting ETS to do a feasibility study. We’ll explain your options and develop a plan that will save money, improve reliability, and increase efficiency.

[cta]Want to make your building energy efficient but don’t know where to start? ETS can help! Contact us to learn more and request a feasibility study.[/cta]