Standalone Storage Gets in the Game
The Inflation Reduction Act
The recent signing of the Inflation Reduction Act (IRA), the United States’ largest investment in climate tech and green energy, has breathed new life into the renewable energy industry. Amongst the massive provisions made for other technologies is a revolutionary extension of the federal Investment Tax Credit (ITC) to standalone battery storage systems. Previously, a storage system only qualified for the ITC if it was paired with and charged almost exclusively from a solar system. Because of this, battery energy storage economics simply weren’t good enough for many businesses trying to meet their bottom line.
Under the IRA, standalone storage systems are now eligible for the 30% ITC, which means you can write off up to 30% of your system cost. Now, even if you don’t have the roof space or cannot otherwise invest in onsite solar, your facility can still benefit from the flexibility and responsiveness of standalone energy storage. Wondering how this provision enables your business to eliminate its highest energy costs while also providing some energy resilience?
In this article, we break down the benefits of storage now accessible to millions of businesses across the country.
How do solar and battery storage systems work together?
As you might already know, an onsite solar system offsets your business’ energy costs by generating clean energy from sunlight. So rather than consuming from the utility grid, you consume solar energy. But what happens when the clouds roll in or the sun goes down? That’s where energy storage comes in. When solar generation is insufficient, your battery is discharged to make up the difference. Conversely, if your solar system ever produces more than the facility consumes, it is stored in the battery to be used when you need it. As you can see, battery storage ensures the value of your solar is maximized, further reducing your electric bill.
Standalone Storage - The New ITC Player
Until the passage of the IRA, energy storage systems were only eligible for the 30% ITC if they were paired with a solar system. Because of this, battery energy storage economics simply weren’t good enough for many businesses trying to meet their bottom line. The expansion of the ITC changes that by directly reducing the cost of a storage system by almost one-third of its sticker price. Now, even if you don’t have the roof space or cannot otherwise invest in onsite solar, your facility can still benefit from the flexibility and responsiveness of standalone energy storage. Here are some ways your storage system can help your business save money:
Peak Shaving: Energy storage is one of the best tools out there to combat costly demand charges. A demand charge is a component of your utility bill that is based on your business’ peak electricity usage, which can account for up to 70% of your monthly bill. In fact, your demand charges may be costing you tens of thousands of dollars on a monthly basis. A battery reduces demand charges by charging itself when demand is low, and discharging electricity when demand is high. This is referred to as “peak shaving,” as the battery is actually shaving your peak usage - reducing those costly energy spikes that lead to high energy bills.
Load Shifting: Just as an energy storage system can enable you to use your produced solar energy at times when the sun isn’t shining, a standalone storage system can charge during times of low-cost energy and discharge during “peak” hours when utility prices are the highest. Facilities can strategically reduce operational costs every day with this simple energy arbitrage.
Back-up Power: Suppose you are a business owner in a disaster-prone area, like many dry and coastal regions are nowadays. Standalone storage can temporarily power your facility’s essential operations when the grid goes down, helping you avoid expensive delays, spoiled products, employee health and safety risks, and other hazards of operational downtime.
Save With Storage Now
Now that the 30% ITC has been expanded to include standalone storage systems, the door is open to many businesses who otherwise would not have been able to benefit from an energy storage system. And with a standalone storage system supported by the ITC, you can charge up now to power up later.
Ready to see how much you can save with storage? Contact Promise Energy at info@promiseenergy.com for a complementary evaluation.
At Promise Energy, we don’t believe that one size fits all. We pride ourselves in designing and installing customized energy solutions that provide the greatest long-term value and energy control for our customers.