Assigning a dollar value to the impact of climate-driven grid disruptions that solar+storage can avoid would shift the perceived break-even point for making the switch from centralized, non-renewable electricity generation, according to a study by the U.S. National Renewable Energy Laboratory (NREL) and a Vermont-based non-profit, the Clean Energy Group.
“Power outages caused by extreme weather events serve as all-too-frequent reminders of the vulnerability of buildings to grid disruptions,” Greentech Media reports. “But what if building owners accounted for the value of avoided grid outages when deciding whether to invest in projects that could supply uninterruptible power after natural disasters?”
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“Even though a PV (solar photovoltaic) and storage system might not appear to be economical under traditional cost-benefit calculations, placing a value on the losses incurred from grid disruptions can make a PV and storage system a fiscally sound investment,” the study concludes. “In most cases, incorporating the value of resilience will increase the optimal sizing of both the PV and battery systems.”
The study looked at solar+storage systems already in place in three types of buildings in Anaheim, California: a primary school, a large office building, and a large hotel. “To place a value on resilience, the study used the expected cost of a power outage (loss of business or the liability incurred) based on values included in 30 utility customer surveys,” Greentech states. It assumed solar+storage could carry about half of a building’s critical load through a two-hour outage.
For the school, “solar-plus-storage was economical even before accounting for the cost of avoided outages,” but its net present value doubled when resilience was factored in. For the large office building, the solar system was economical before factoring in resilience, but energy storage was not. But by combining the value of avoided outages with savings on electricity bills, the study pointed to $178,000 in net benefits to the building owner over 20 years.
“I would call this a rather conservative estimate of the value you would get for a project from including the resiliency,” NREL renewable energy research analyst Joyce McLaren told Greentech. “The outages that we were looking at were relatively short compared to something you saw in Puerto Rico or elsewhere after a hurricane.”
It’s tougher to assign a dollar value “when you are talking potential loss of life, or impacting quality of life,” added Clean Energy Group Vice President and Project Director Seth Mullendore. “But certainly it is a lot higher than when you’re just talking about business losses.”
