DISTRIBUTED SOLAR PV 150 U.S. Power Outages Over Time FOR ELECTRICITY SYSTEM 120 Weather-related RESILIENCY 90 Non-weather-related POLICY AND REGULATORY 60 CONSIDERATIONS Number of Major Outages 30 ABSTRACT 0 1984 1988 1992 1996 2000 2004 2008 2012 Distributed solar photovoltaic (PV) systems have the potential to supply electricity during grid outages resulting Figure A. Major weather-related power outages—those affecting ≥50,000 customers—increased dramatically in the 2000s (Kenward from extreme weather or other emergency situations. As and Raja 2014) such, distributed PV can significantly increase the resiliency of the electricity system. In order to take advantage of this capability, however, the PV systems must be designed with THE NEED FOR RESILIENCY resiliency in mind and combined with other technologies, As shown in Figure A, the number of weather-related power such as energy storage and auxiliary generation. disruptions has grown significantly within the past decade. Strengthening policy and regulatory support could encourage Severe weather is now the leading cause of power outages deployment of PV systems designed for resiliency and in the United States (Kenward and Raja 2014; EOP 2013). improve public access to power during emergencies. Sustained weather-related outages impact daily life, health This paper specifies the goals of power resiliency and and safety support services, communities, and the economy, explains the reasons that most distributed PV systems with inflation-adjusted cost estimates of $18 billion to $70 as installed today are technically incapable of providing billion per year, on average (Campbell 2012). Electricity consumer power during a grid outage. It presents the basics of losses associated with Hurricane Sandy (2012) are estimated designing distributed PV systems for resiliency, including the to have resulted in $27 billion to $52 billion in economic use of energy storage, hybrid fuel-use and microgrids.1 The losses from lost wages, spoiled inventory, grid damages, and paper concludes with policy and regulatory considerations for other sources. According to the Edison Electric Institute, the encouraging the use of these distributed system designs. economic impact of blackouts caused by natural disasters can be significantly higher than the cost of system repairs (Johnson 2005). Electricity System Resiliency Focuses on: Electric utilities and local, state, and federal governments understand the urgency for prompt electric system restoration, • Prevention of power disruption but are often constrained by limited resources during • Protection of life and property dependent on emergencies. Increasing the grid’s resiliency can reduce electricity service the time and resources needed to supply power to critical • Mitigation to limit the consequences of a facilities—such as hospitals, shelters, and wastewater treatment power disruption facilities—and return the entire system to normal operations. • Response to minimize the time needed to –––––––––––––––––––––––––––––––– 1As defined by the Department of Energy, microgrids are a group of restore service interconnected loads and distributed energy resources with clearly defined electrical boundaries that act as a single controllable entity with respect to the • Recovery of electricity supply. grid, and can connect and disconnect from the grid to enable them to operate in both grid-connected or island mode. NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. 2012$/kWh] BNEF Averaged Navigant EIA Why don’t most existing rooftop PV systems $900 provide power when the grid is down? $800 $700 For a solar PV system to provide electricity during a $600 utility power outage, it must be designed to function as a standalone system that can isolate itself from the $500 grid, continue power production, and store excess $400 generation for later use. $300 For safety reasons, current operating standards require $200 that grid-connected solar PV systems automatically $100 disconnect from the grid during a power outage. Most $0 of these systems are not designed to function as both 2013 2018 2023 2028 2033 2038 2043 2048 a grid-connected and a standalone system. Instead, they disconnect from the grid and completely cease Figure B. Battery price projections. The cost of electricity storage power production during a system outage. In addition, capacity is typically given in $/kWh, while the cost of electric most PV systems in place today are not coupled with power delivered from storage is usually amortized over thousands batteries or an auxiliary power source (such as a diesel of charge-discharge cycles and presented in cents/kWh. generator) to allow them to provide continuous power Source: The Economics of Grid Defection (RMI 2014). Courtesy of to a load. Rocky Mountain Institute. Used with permission. Designing a PV system for standalone operation and the solar panels and/or storage unit. The system must also adding batteries and/or an additional generating be capable of isolating all local load from the grid, to avoid resource allows it to produce power even when the grid creating a grid fault. is down, offering resiliency during an emergency. To date, the major barrier to the deployment of energy storage devices in conjunction with PV systems has been cost. But battery prices have declined notably in recent years. One DESIGNING PV SYSTEMS TO PROVIDE study indicates that the incremental cost of adding batteries to ENERGY RESILIENCY a residential PV system in California declined at an average Deploying solar PV technology in conjunction with energy rate of 11% per year between 2007 and 2013 (NYSERDA storage, in combination with auxiliary generating sources, or 2013), and costs are expected to continue dropping (see within a microgrid allows solar to contribute to the resiliency Figure B). Based on analysis by Rocky Mountain Institute, by providing localize power when the grid is down. The PV systems with storage will be cost-competitive with grid roles of these supporting technologies and applications are power in some locations within this decade (RMI 2014). covered below. Lower battery prices, increased demand for backup power, and uncertainty in the future cost of grid power are all Electricity Storage stimulating interest in distributed energy storage (Ammon Given the variable nature of renewable energy resources, 2013). Other possibilities receiving attention include using including solar, energy storage is a necessary component electric vehicles as multi-use storage units and reusing for a distributed PV system to provide reliable power during vehicle batteries for solar applications. a grid outage. Batteries are the most commonly used and In conjunction, more focus is being placed on optimizing the well-suited storage technology for small, distributed solar PV economic viability of energy storage by identifying the most applications, although other types of storage may be available cost-efficient system size for solar applications. Rather than for utility-scale systems. aiming to capture all excess generation from a PV system, Batteries are integrated with solar PV panels through the the battery unit is sized to match the on-site demand for inverter. The inverter must be able to automatically select electricity with the on-site supply of electricity as closely between charging the batteries, providing electricity to the as possible (Doelling 2014). When systems are designed on-site load, and/or feeding electricity onto the grid. The to supply emergency backup power, load shedding to limit function that is selected at any moment depends on electricity electricity use to critical loads reduces the size (and cost) demand from the on-site load, the grid status, battery status, of the battery unit. Batteries may also be used to help a PV and the available solar resource. When the grid goes down, system ride through a utility outage long enough for auxiliary the inverter must isolate the PV system from the grid, while generation to come online, or to help auxiliary fuel supplies continuing to supply the on-site load with electricity from last longer. National Renewable Energy Laboratory • 2 Another means of making storage more economical for the is providing incentives for the development of advanced PV system owner is to compensate owners for the benefits storage associated with distributed energy through the that storage provides to the broader electricity system and to Self-Generation Incentive Program (CPUC 2014a). Storage society. Storage may add value through the provision of: procurement targets have been set for load serving entities (AB2514), and the California Public Utility Commission • Ancillary services to the grid, such as voltage control, (CPUC) has been directed to consider methods to place • Demand-side management to smooth peaks in the load appropriate value on the services that storage provides. on the utility system, To remove interconnection barriers to storage, the CPUC • Improved power quality (e.g., batteries can smooth the issued clarification on the issue, specifying that customer- variable output of a PV system), side storage associated with generating systems that are eligible for net-metering should be treated as an “addition or • Electricity to critical facilities during major power enhancement” to the system, and are exempt from additional outages interconnection application fees, supplemental review fees, • An increased