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Move over solar: Big batteries ‘sexiest’ now

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Early adopters of rooftop solar and electric cars are finding a new obsession in energy storage as the first generation of consumer-friendly batteries capable of supporting household circuits comes to market.

Rob Wilder, a globe traveling professor of marine environmental conservation, has a lithium-ion battery mounted on his garage wall at an Encinitas home overlooking the San Elijo Lagoon estuary.

“The batteries are what are the newest, coolest, sexiest,” said Wilder, a devoted environmentalist — and capitalist — who in 2004 founded a socially responsible investment fund for low-carbon energy technology companies.

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Wilder’s new battery, cloaked in a grey metal box the size of a large gym locker, is a trial version of the household “Powerwall” battery developed by plug-in carmaker Tesla Motors. It ties into several electrical circuits in a house equipped with rooftop solar and charging stations for two plug-in cars. In the event of a rare power outage, the new battery keeps lights on and the kitchen fridge cool for several hours. Other California solar customers currently lose all power, including solar, during outages.

Wilder is heralding his experience as an early breakthrough for households that want to use more of their own renewable energy, or even cut ties with the power grid altogether.

“Imagine something like Mad Max,” he says. “The battery merely has to make it through the night, and then I’m running off sunlight again.”

SolarCity, the top U.S. solar provider and a corporate cousin to Tesla, expects super-sized batteries to become routine companions to household solar panels within five years or less. It plans to offer battery backup power and related services as a $5,000 add-on to household rooftop solar.

Lynda Daniels of Carlsbad, a retired pharmaceuticals sales representative, is on the waiting list for a mass-produced Tesla battery with a sleek exterior.

She qualifies for time-based electricity pricing that allows her to charge a plug-in electric car at discount overnight rates, but bristles at recent bill changes by SDG&E. She hopes adding rooftop solar and power storage can help her avoid the highest-priced utility charges during the day.

“You can use it anytime you want, even at peak times,” she said about the stored energy.

Daniels said the Tesla “Powerwall” would add another $3,500 to the price of a $10,000 rooftop solar energy system she has ordered through a company named Sungevity.

Interest in stationary energy storage has surprised even devoted advocates of the technology.

Tesla Motors seemingly stumbled into the business opportunity as it builds a gigantic battery factory in Nevada to bolster battery supplies for its electric-powered cars.

Tesla CEO Elon Musk this month described demand for its home and business batteries as “really crazy,” tallying initial reservations that would translate into sales of $1 billion if requests are fulfilled.

“That’s with no marketing, no advertising, no sales force to speak of,” Musk said.

Big batteries make immediate economic sense for many businesses trying to control special billing charges based on the timing of energy use. Time-base rates are coming soon to small businesses and later households in California.

Musk of Tesla believes the value of battery storage has less to do with rooftop solar than the potential to idle high-priced power plants and portions of the grid.

For California’s major investor-owned utilities, which derive most profits from investments in traditional grid infrastructure, the prospect of customer-owned batteries paired with rooftop solar power presents a business challenge.

Those utilities have watched revenues erode from a growing segment of grid-connected solar customers — now numbering 250,000 — who receive bill credits for solar energy at the full retail rate.

They are seeking higher fixed fees to ensure those solar customers pay enough, among other measures.

Experts have warned that tactic could backfire if prices for batteries and solar energy fall past a tipping point.

“It is plausible that it will become attractive enough for customers to entirely defect from the grid: to altogether drop the traditional power company just like millions of Americans have altogether dropped the traditional phone company,” wrote James Mandel and Owen Smith of the Rocky Mountain Institute, which has issued a series of recent studies on the economics of grid defection.

The latest analysis by the institute, released last week, finds that batteries may ultimately be undercut by other energy-dodging technologies that cost less, like sophisticated new themostats and electric appliances.

Solar panels and batteries already present a cost-effective alternative to the grid in Hawaii, which has the nation’s highest electricity rates. SolarCity plans to offer a lease-style contract for off-grid solar-and-battery systems there next year.

Experts say San Diego could be the next geographic market in line because of its high kilowatt-hour electricity rates — averaging about 23 cents for household customers, the highest among major utilities in California.

The area’s regulated utility monopoly, San Diego Gas & Electric, could end up claiming a prominent role in deploying batteries with its customers, under proposals submitted in July to California utility regulators.

One pilot program, if approved by state regulators, would provide households and small businesses with a monetary incentive toward buying big grid-connected batteries. In exchange, SDG&E would take control of the storage system’s charge and discharge functions to help defer expensive grid upgrades elsewhere.

Proven savings would be shared with the utility’s corporate shareholders — a potential new business model.

In rural inland areas of San Diego County, off-grid life under battery power has long been underway.

Gary Waayers moved from a suburban San Diego home to an off-grid community near Julian a decade ago and soon spent $25,000 to install rooftop solar and lead-acid batteries. The energy shift was a matter of environmental conviction for the biology professor and his wife.

“We’re going to run out of coal and natural gas,” Waayers said. “Why not do it now and also save the planet.”

At the same time, Waayers said it would be wasteful for too many households to follow his example, piling up extraneous batteries to get through the rare series of cloudy days.

He envisions a future with solar-powered households linked to a collective neighborhood battery, in a series of resilient micro-grids. That would leave just a few big power plants standing for extreme backup services.

“SDG&E could have a huge role in managing that system,” he said.

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