Risk-modeling accuracy key to selling solar + storage

By Dan Vickery, Director, Market Development & Analytics | August 8, 2016

Anyone who cares about sustainability, free markets, and lower energy costs can reasonably claim that when solar PV providers thrive, so do solar customers. But the opposite is equally true, and no less significant. Because what really drives revenues for solar providers is the cost-saving incentive they provide customers to use self-generated solar power rather than pulling all their power from the grid.

A combined solar-plus-energy storage solution amplifies a solar customer’s savings, not only by reducing demand charges, but also through energy arbitrage, tariff optimization, and other revenue streams.

Few solar-plus-storage projects will get off the ground, however, without the financial leverage of risk-averse institutional investors.

The takeaway from 15k site analyses

Investors must be convinced that the projected savings will, in fact, materialize, and that the storage component of the project will not add to the investment risk. Providing such assurances requires a careful analysis of the proposed solar-plus-storage project.

To date, Green Charge has conducted upwards of 15,000 site analyses, including nearly half on solar-storage combined solutions. This experience is crucial. Because while all energy storage providers conduct site analyses to right-size a storage solution, few can accurately assess the impact of a solar PV installation. Instead, they rely on standard models of how it should function. The models can’t account for the unpredictability of solar, especially with regard to the timing and duration of cloud cover.

Better data loosens purse strings

That’s why Green Charge has developed a patent-pending risk modeling algorithm that considers various cloud cover scenarios and provides performance and savings estimates with varying confidence levels. The risk analysis, in turn, informs our system sizing, which guarantees savings, even under worst-case solar performance scenarios.

As it turns out, our proposed systems to support solar PV installations tend to be sized larger than those of other storage providers. At first glance, the higher upfront cost of a larger system would seem to hamper a solar provider’s sales efforts. But it doesn’t, because what matters here is not the means to the savings (the solar PV and storage installation), but the bottom-line savings themselves. And our data prove unequivocally that larger storage systems lead to larger net savings. Even more important, our data can show exactly how much a customer will save at whatever confidence interval the investors require. The result: more investment, more installations, more customers using self-generated power, and thus, more thriving solar providers.

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