Assessing Cost-Optimal Battery Energy and Solar-Plus-Storage Systems for Federal Customers: A Nationwide Assessment: Preprint

Prior research has identified that the financial viability of behind-the-meter battery energy storage systems is heavily dependent on technology cost, utility rate structure, energy consumption patterns, and co-deployment with synergistic technologies like solar photovoltaics (PV), among other factors. This study builds on existing research by comprehensively evaluating the economics of battery energy storage systems (BESS) and solar-plus-storage systems for a reference office building at 755 reference sites under 834 utility rates, and four storage capital cost scenarios. Results indicate that even with dramatic cost reductions, BESS is likely to be cost-effective only under utility rates that include demand charges, and possibly include time-of-use (TOU) pricing as well. Even under these utility rates, BESS systems provide marginal savings, and office building operators are unlikely to deploy the technology for cost savings alone. Solar-plus-storage systems provide more savings than BESS and allow for larger economic storage capacities. Solar-plus-storage provides compelling savings opportunities at baseline prices, and even at capital costs 25% higher than baseline. Solar-plus-storage is most effective where there are demand charges and energy pricing schemes include TOU pricing, or where electricity is expensive (at least $0.30/kWh). Our case studies illustrate that the presence of demand charges, even at similar energy costs, can be the deciding factor in BESS and solar-plus-storage viability. The findings and maps from this assessment may be of use to planners, building owners, and developers looking for potentially economic storage opportunities.