SolarCity’s Game-Changing Battery Energy Storage System Held Up By Feet-Dragging Electricity Providers

APR 2 2014 BY MARK KANE 52

SolarCity storage systems will initially be available in few states

SolarCity storage systems will initially be available in few states

As we reported a few months ago, SolarCity is preparing energy storages for new solar installations with Tesla battery technology.  The California company has over 500 customers who signed on for such a system.

Everything looks okay because over 100 installations in houses were already done, but it turns out that the  project has been partially halted. SolarCity has experienced problems with utilities, which are delaying permissions or charging high fees for connections in California.

“For more than two years, SolarCity Corp. has been trying to launch an experiment that could change the way we power our homes.”

“The San Mateo company has installed battery packs in more than 100 houses throughout California, each pack linked to rooftop solar panels. The lithium-ion batteries, made by Tesla Motors, store electricity from the panels during the day for use at night.”

Utilities seem to be fighting for survival because of SolarCity’s growth,  with over 100,000 customers, which becomes a significant competitor to them, especially with energy storage systems included, which lower utility’s role even further.

“California’s big electricity providers are dragging their feet on connecting the batteries to the grid and charging steep fees – nearly $3,700 per customer, in some cases – to do so, according to SolarCity.”

SolarCity CEO Lyndon Rive said at a public forum in which he complained about the delays:

“We all know this is a game-changing product. Those in the game don’t want to change the game. They really like the existing game.”

As of 18 March, just 12 from over 100 installations were working, all the rest can’t use the batteries. Some customers have been waiting several months for connections.

“Pacific Gas and Electric Co. has hooked up 11 customers, while San Diego Gas and Electric Co. has connected one. Southern California Edison has not connected any, even though SolarCity has submitted 10 applications to the utility.”

According to SolarCity, both PG&E and Southern California Edison charge $800 for each application, and another $600 fee for a new electric meter [PG&E] or $2,898 to install and connect the meter [Southern California Edison]. SolarCity stated that application fees are illegal.

Lee Middleman of Portola Valley, a SolarCity customers stated:

“It’s a little remote, here, and when the power goes out, it’d be nice to have a backup system. If there’s an earthquake, we know Portola Valley is going to be one of the last places PG&E will service, because they’re going to start with the more densely populated place first.”

“It seems like they’re throwing every possible roadblock in front of this thing to slow it down,”.

Utilities fend off accusations claiming that there is no rush and waiting time for PG&E is normally about 8-10 weeks.


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52 Comments on "SolarCity’s Game-Changing Battery Energy Storage System Held Up By Feet-Dragging Electricity Providers"

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If I have a large enough battery I would not connect to the grid. I think that the 1000’s in fees could be put into a larger system and I would say bye bye utility company.

The problem with that is if you have an electric vehicle, you want to be able to draw off the grid to charge up fast.

The cost of lead acid deep cycle is 0.17/watt. They are large and heavy though, but if you have the space then these two are not a problem. Now for charging the EV; that is not a problem either. During the day you can use a larger array of solar panels and during the night you can use the large array of the lead acid batteries!

I understand that used EV batteries are a good fit as electron storage for solar systems. Looks like Musk is disrupting not only the auto industry but the power companies. Wait util he can turn out storage devices by the thousands at a low cost. And, you know, innovation should be accepted and embraced by these companies not fought against. We all lose when companies like P.G.& E. fight progress.

People will just go completely off grid…


This. I think what will end up happening in sunny regions like the US Southwest will be a combination of solar, batteries, and 10kW natural gas turbines as a last resort if the batteries are depleted and there is no solar power available. No electric grid necessary.

Change that to about 1 kW, you still have your battery to provide peak demand.

Of course the G in PG&E stands for Gas. Wonder if they could/would put up roadblocks to using NG generators at the home??

It is more where electric rates are high, than where the sun shines. NREL values can be .1 to more than .2, but the guy in New Mexico, paying 6 cents a kwh isn’t going to find the same economies as someone above the 30 cent tier, in CA.

The low hanging battery fruit may not even involve solar. It’s store by night, sell or use battery stored watts by day.

I pay 48c during the day and 11c at night with the SCE time of use electric car rate. My solar pays back at 48C during the summer. You can see why they don’t like solar and batterys

48 cents? This must be to pay for SCE’s ongoing San Onofre disaster. So people have to have solar panels to give the Utilities’ and politician’s crap right back to them, economically speaking.

But going off-grid would suck if you have an EV because how do you charge it quickly without that grid power?

I wouldnt need to charge quickly and I assume a lot of others would not need to either.

If you have storage, you can fast charge (receiving an 80% charge in about 20-30 minutes. I observed this setup at the new Honda Smart Home on the U.C. Davis campus.

Someone who wants a grid connection but is not going to be paying much in charges per kilowatt hour costs the utility a lot of money, especially if when they do want power it is during a time of peak demand.

For natural gas supplies in the US around half of bills are down to transmission and distribution.

So if that cost is amortised over a very small amount of kilowatts per year, it is going to be expensive.

That is capitalism, and that is the real cost of the grid.

If these solar panels are producing enough excess energy to require batteries to store it all, that will all be done during peak demand.

Many of us without batteries already make the grid more stable. My panels produce during peak demand, and my EV charges during times of excess production. It is win-win for the utilities. With batteries, one could control the timing of energy flow even better.

I don’t think “that cost will be amortized over a very small number of watts”. Solar is just getting above 1% of total watts generated, in CA.

Capitalism should reward those who pay up for storage, as it should be. They should use as they see fit. Traders do arbitrage. Let the rate payer eat some cake.

From a utility approval standpoint, I don’t understand how this is different from any other solar NEM installation. The solar will already feed energy into the grid and the battery is just changing the profile of the draw vs. feed-in. As long as the system is inspected by the local building department, I don’t see why the utility has any right to charge additional fees.

Actually, in principle, I would prefer that the battery system absorb all the surplus energy and the utility should never see any feed-in energy.

Mandates compelled the utilities to connect solar arrays.

How is the grid going to be paid for if people are using minimal amounts?
The transmission lines, back up and so on cost big, big money.

Off grid entirely or perhaps half of your former bill anyway when you were drawing average amounts of power, even if usage is minimal using solar and batteries, are the only way to finance the grid.

If you are saying that a rash of people disconnecting from the grid will leave the overhead of the power transmission system unpaid for, and cause a spiraling downfall of the power transmission companies, then I would have no choice but to break out in sheer joy.

Oh, but you are saying that’s a bad thing….

Dave is supporting nuclear power and as nuclear power is an epitome of centralized power production, Dave must therefore must hate solar power that promises not too soon in the future very affordable off-grid solutions.

In Australia pilot projects for going off-grid are already well underway:

For the record I have supported solar for 40 years.

I did not conceive however that solar would be treated as a panacea, and installed regardless of its applicability in a particular location or whether the sunshine happens when it is needed, as is often the case now.

Large areas of the US though can in my view reasonably deploy large amounts of solar, especially in areas where the summer peak in demand is pronounced and the winter peak not very high.

That does not change the fact that the grid costs money if you want a connection.
Please stick to the subject we are discussing rather than straying into questionable assumptions of motivation verging on ad hominem.

I am making the simple point that the grid costs money and needs paying for unless you are off grid.

Dave, I had the benefit of visiting DC and advocating for solutions to this problem, and found myself suggesting that the business risk of stranded assets is shared between ratepayer and corporate utility. If returns are allowed to fall on amortization of unused generation, or fewer watts across lines that’s Capitalism, too. It can, and perhaps will go hand and hand with a rising “price of backup”.

I never signed a 20 year PPA, for coal, while someone appointed by a “business friendly” Governor might have. Did they really do it on my behalf? This business recovers a lot on building, and in some cases (CWIP) it not only receives free financing from the ratepayer, but gets paid to walk away (through a PUC approved ROE).

The grid is not a stranded asset whilst it is useful. If it were not the issue would not arise as the homeowners with the solar array and storage system would not ask for connection. What is happening is that the grid is normally paid for over a large number of kilowatt hours supplied. When that same cost is passed on as a one off charge customers are not going to like it, as the bill is hefty, but the cost has to be paid for somehow. I am no expert in Californian charges, but my understanding is that to reduce use the rates are set in a statutory manner to favour low usage, and charge a lot for usage over a certain amount. Here in the UK there is no incentive to economise, and so the utilities set charges with a connection fixed rate, so that small users pay a lot per kilowatt, and big users relatively little. I am not concerned here to advocate one method over another, but to make the simple point that the grid, if it continues to be used at all, needs paying for, and that charge per customer is substantial. Previously due to… Read more »

Meh. You don’t get it.

As a Californian solar user.
1) I pay $5/month for a “distribution fee”, so I do contribute to the distribution costs for the grid.
2) The excess solar PV electricity I generate is put onto the grid and the utility sells my electricity to my neighbor at peak day-time rates. The utility pays me back with excess power they have at night. Thus the utility profits off my solar system with rate level arbitrage.

So the utility makes money off of me & my PV system in two different ways. That is more than enough to pay for my share of the distribution system. So when the utility whines about solar PV systems not paying their fair share, they are just full of BS. They are just worried about losing more and more customers. But hey, that’s the way the competitive world works.

And the UK should change their rate structure to the California system as it has proven very effective at causing people to more efficiently use electricity.

When you charge to much people vote with their feet. I don’t lioke SCE very much they are a for profit company and lie to make more money.

This is a non-problem. Installing a transfer switch, instead of a grid tied inverter, takes care of the issue. The power company requires, with justification, that if you produce and feed power back to them that you get the installation completely certified with them. The issues are quality of power, matching of frequency, and that your inverter stops feeding power back if the central power is cut — otherwise you could be creating a live line after a power worker has shut down a section for servicing. A transfer switch however, only connects to external power if your own system is not producing power. That is, you run as your own power system, and only use the external power as a backup source. There is no reason to even tell the power company that this is the case. The transfer switch is on your side of the meter panel. If the power company is going to get huffy about such a grid tie method and claim it is illegal, I would argue that so was killing 8 people in San Bruno. However, that aside, the answer is really simple. You tell them that they can disconnect you. If you are… Read more »

What I don’t get is the use of Tesla batteries for this application. A stack of much cheaper deep-cycle lead acid batteries seems like a far more cost effective solution. Tesla batteries are expensive but their energy density to weight ratio is excellent for automotive applications but not necessary for a grid storage application.

The total life cycle cost of the Tesla batteries may be cheaper than lead acid, irrespective of mass. I don’t know if this is true or not, but it is possible.

Yeah, I really don’t like lead acid batteries. Tesla batteries are probably needlessly expensive, though. For now, LiFePO4 or LiMnO2 might be better choices. Eventually we could move to a sodium based battery technology or something.

These days, I’m always looking for a more sophiticated take on how the gigafactory can play a role in the grid. I’m not sure the economies of $150/kwh storage beat lead-acid. What may be true, however, is that QC could have massive pallets of lithium batteries not suitable for cars, but perfect for this alternative. Sort of like Sam Adams making less beer than Budweiser spills.

plausible answer – B grade batteries, not fine for cars but great for powering houses.

An even more plausible answer, used up old Tesla batteries amortized to zero in a car.

Perhaps it’s time to separate the transmission, servicing, etc businesses. From production. My understanding is that this is the system in the UK. Thereby removing these conflicts. You pay the local service and delivery monopoly a basic fee for connection. While “buying” your power from any number of producers.

The utilities are indeed being butt-heads and dragging their feet.

But that said, I don’t know why people would bother getting batteries. It just raises the cost of your system, add maintenance requirements, and you get almost no benefit from them. You are better off spending that extra money on more solar panels.

This is a great system. I am sure they will work out the details.

It’s funny how the power companies are jumping up and down about EVs plugging in to power up. But connecting solar panels with remote power storage, making the grid just about unnecessary, they stall.

But with enough solar panels, and enough battery storage, why not go without the grid until it’s cost effective to connect to resell energy back.

Solar City quoted me about $180 per month on those Tesla batteries…

Hmm… NO thanks!

$180 per month ? Is that battery rental or some such thing? I guess Musk has to eat too.. Or else he’s doing economics like a $1000/ month car only costs $500 or some other such statement.

The flip side of course, is that your California Utilities and Politicians are even more greedy than ours here in NY State, (The greediness of my British utility – and also their incompetence and dishonesty – charging twice for supplying ‘energy’, is what convinced me to install a 9 kw solar system).

Utilities that screw people by charging 30 cents / kwh or even more in the summertime – regardless of whether idiot politicians are responsible for the overall cesspool conditions or not, have to realize that ‘confiscatory’ rates are not like confiscatory taxes. Its harder to move than it is just to avoid usage of your product, so that is what more and more people in PG&E and Southern California Edison (more great brains) will do, that is, not use your service.

Yes, battery “rental”. And the ads clearly stated that I get to have a “Tesla battery” for that $180/month.

I wonder if they are new or used batteries….

So they really call them “Tesla batteries”? I guess they are riding that trademark.

That is what I keep telling people . . . don’t even think about batteries unless you have a far off-grid cabin, it just isn’t worth getting batteries. The people that get them are largely very wealthy people building the expensive system that will provide them power even if there is a power outage. I can deal with losing power a few hours per year.

I agree. The battery is nice to have b/c they are quiet in back up mode when the power is off.

However, the cost is just too much in my opinion.

In Texas, going off-grid makes zero financial sense. Solar would have to net out at 5c/kwh. And even then the up-front cost would be prohibitive.

Up-front cost is merely a problem of access to capital. If your annual cost of funds is less than what you would pay to the utility for what the system generates, then you have a viable proposition. My situation in California is clearly beneficial because the increase in my HELOC payment is far less than the decrease in my utility bill.

Well if you self-install and amortize over 30 years it might make sense.

But for a lot of people it makes sense to stay off grid . . . i.e., to get grid power they would have to pay tens of thousands for telephone poles, distribution lines, a local drop, etc. Instead, they can just build an off-grid system with a battery.

I went on vacation last year to find an electricity bill of about 4000 dollars, which is several times what I pay in a year.

The meter was very apparently broken. The utility just did not care, they wanted the money and threatened to cut me off unless.

It took me half a year of weekly visits and a couple of meter tests whatever until they recognized the obvious.

So I hate utility companies they should all go broke.

I’ll go off grid the moment I can and the arrogant utility people should die of hunger begging at the train station.

Here here

“Utilities fend off accusations claiming that there is no rush and waiting time for PG&E is normally about 8-10 weeks.”
Seems funny that they would fend off accusations of foot dragging with people with solar panels by saying its not you, we’re always this pathetically slow.

In addition, the utilities don’t like it b/c of the net metering.

PG&E charges peak rate at $0.30/KWh. You can totally rig the system to pump the power back at the peak and then recharge it at off peak hour rate.

Sure, it is helpping the grid, but it won’t help the Utilities company pocket and they don’t control when and how the power is pumped back…

Yeah, I wonder if they are trying to prevent rate arbitrage. Although people would be stupid to do it because it would probably cost you more than you would make based on the wear & tear of your battery.

I’m on PG&E E-9A, the old EV TOU rate. Tier 3 rates which kick in over 500kWh/mo are $0.17/kWh Off-Peak, $0.32/kWh Part-Peak and $0.53/kWh Peak. I was thinking about doing this on a small scale. I have a server at my house that is on 24/7 and already has a UPS. The UPS has an external battery connection. I calculated how much it would cost to get enough batteries to run it all day except the Super-Off-Peak EV charging hours and how to charge those batteries during the midnight to 7am window. I also calculated how much the normal cost of power is to leave it like it is. The rate arbitrage definitely works, but the hardware it not simple and is too expensive. I would have to disconnect the external batteries from the UPS with an automated switcher to charge them at a higher rate during the off-peak window. Using the charger in the UPS would take too long. Also, cycling the batteries every day is pretty aggressive and the lead-acid batteries I was looking at would wear out pretty fast. With more sophisticated Li-Ion batteries, charger, and BMS it would probably work, but not practical as a hobby… Read more »