As the energy storage industry continues to rapidly develop, systems in large commercial buildings are becoming one of the most attractive applications. Energy storage systems in these settings can offer reduced utility bills by continuously monitoring facility usage and taking action when demand is about to cross a specified limit, thus avoiding costly charges. This business model has been successful in California, where high demand charges combined with incentives through the state’s Self-Generation Incentive Program (SGIP) make for an attractive return on investment. As battery prices continue to fall, this model is likely to be replicated in other regions. As explored in Navigant Research’s report, Community, Residential, and Commercial Energy Storage, global deployments of storage in commercial buildings are forecast to increase from 75.2 MW in 2015 to 1,773 MW by 2020, at a compound annual growth rate of 88%.
There is a natural synergy in energy service companies already providing building automation and energy management/efficiency solutions partnering with storage system providers or offering these solutions themselves. These companies already have a deep understanding of building operations and energy usage, typically using energy management software, which can be upgraded relatively easily to include an onsite storage system to shave demand peaks. Similar partnerships already exist between building management and solar energy companies that work together to reduce a facility’s energy costs. Additionally, the increasing popularity of workplace electric vehicle charging is expected to result in a greater demand for storage systems, as they can help reduce the cost of providing day-time charging to employees and visitors.
New Partnerships and Offerings
The benefit of these types of partnerships has been demonstrated by recent announcements from leading storage and building energy management providers. Notably, Tesla Motors, which recently announced a line of commercial energy storage systems, has partnered with demand response and energy management software provider EnerNOC. EnerNOC’s energy intelligence software (EIS) will serve as the connection between batteries and a customer’s facility, enabling more effective demand charge management and demand response programs. Tesla has also recently announced a partnership with Black & Veatch to provide a similar offering for larger commercial, industrial, and municipal facilities. Black & Veatch has existing experience in this area, having already designed more than 24 MW of behind-the-meter energy storage capacity for commercial and industrial facilities.
Tesla is far from the only battery manufacturer targeting this emerging space. Leading lithium ion provider LG Chem recently inked a similar partnership with energy management firm ONEnergy to offer lithium ion-based storage systems to commercial, industrial, and residential customers in northeast North America. However, one of the most interesting players in this space is likely to be Johnson Controls. The building and automotive systems giant already manufactures a line of battery products, and it is expected to soon be launching a lithium ion offering primarily targeting its existing building automation and energy management clients. These existing relationships and the company’s expertise with building systems may give it a significant competitive advantage. The coming years will likely see more partnerships of this nature as increasing attention is paid to this rapidly growing market.