The Renewable Battery Connect initiative will call on home battery owners to discharge power to the grid when electricity demand is especially high, and provide them with financial incentives in return.
Customers in Colorado who own a SolarEdge Technologies’ home battery system can now participate in a new virtual power plant (VPP) incentive program run by Xcel Energy.
The initiative – called the Renewable Battery Connect program – will call on home battery owners to discharge power to the grid when electricity demand is especially high, and provide them with financial incentives in return. SolarEdge software will automatically handle the charging and discharging of the battery when called upon to do so.
VPPs are aggregations of distributed energy resources, and offer many benefits. In an article on the barriers to VPPs, Jigar Shah, director of the Department of Energy’s Loan Programs Office, touted their virtues. “By deploying grid assets more efficiently, an aggregation of distributed resources lowers the cost of power for everybody, especially VPP participants,” Shah wrote.
SolarEdge worked closely with Xcel Energy to design a program that meets Colorado’s specific energy requirements, Peter Mathews, the company’s North America general manager, said.
“The combination of our highly efficient DC-coupled technology and innovative software lays the groundwork for future VPP growth, as we continue to move towards a net-zero economy,” Mathews added.
Customers who enroll in Xcel Energy’s Renewable Battery Connect program will be given a $500 per KW upfront incentive, working out to $2,500 for one SolarEdge home battery, and an additional $100 for each year that they are part of the program. Customers who meet certain income thresholds or come from disproportionately impacted communities could receive a higher $800 per kW incentive. The program’s enrolment period is five years, and customers could be called upon to discharge power to the grid up to 60 times annually.
VPPs present the electricity sector with a host of potential benefits. They can reduce reliance on fossil fuel resources, and play a role in electrifying different sectors of the economy. In the report Virtual Power Plants, Real Benefits, RMI estimates that VPPs will reduce peak demand in the country by 60 GW by 2030, and potentially 200 GW by 2050. Moreover, VPPs can reduce yearly power industry costs by $17 billion by the end of the decade, since they can avert the need to build out generation, transmission and distribution infrastructure.
“Over the next decade, VPPs could play a central role in meeting grid and societal needs,” the report stated.
However, the report also identified three potential obstacles to the growth of the VPP market – whether regional transmission organizations craft wholesale market rules that fairly compensate VPPs; whether utilities provide retail programs and rates that promote VPPs in areas that are not served by wholesale electricity markets; and the low awareness among customers and policymakers regarding the benefits offered by VPPs.
In July, SolarEdge announced it had entered a multi-year capacity reservation agreement with global semiconductor company Infineon Technologies, under which Infineon would supply it with components for multiple SolarEdge products. The two companies also plan to work together on developing solar products and other future technologies.
SolarEdge reported record revenue of $991.3 million in its Q2 earnings report on Aug. 1, 5% higher than the previous quarter and 36% higher than the second quarter of 2022. Solar segment revenues totalled $947.4 million, 38% than the same quarter last year.
