An Iowa college that has been at loggerheads with its utility over interconnecting renewable energy projects may find it more economical to go it alone with energy storage.
An analysis done by the National Renewable Energy Laboratory concluded that Luther College could save approximately $25,000 in energy costs for each of the next 25 years if it installs a 1.5 MW solar array and a 393 kW battery.
The analysis assumes that a third-party investor would pay for the system – which is now allowed thanks to a state Supreme Court decision last year – and would accept a 5 percent return on investment.
That scenario likely would allow the college to reduce its electricity bill by 1 or 2 percent, according to Kate Anderson, the engineer at the lab who did the calculations.
“It’s not a huge savings,” she conceded. But given the still rather high price of storage, she said, “the fact that there is a savings is really good. It’s moving in the right direction.”
The laboratory has been doing similar analyses for seven other colleges and universities. The University of Minnesota-Duluth and Milwaukee Area Technical College are both exploring solar plus storage. Lake Superior College, also in Duluth, is looking at solar alone.
Although small, residential-sized solar and large, mostly utility-owned solar projects have developed some momentum, the U.S. Department of Energy perceived a lack of mid-sized solar projects, those in the neighborhood of 1 MW, according to Anderson. The lab solicited applications from universities and colleges in December, and will invite a second round of them next year, Anderson said.
‘We can’t net meter it’
Luther College, in Decorah, Iowa, set a goal in 2012 of generating 50 percent of its power from renewables in 2015, 70 percent by 2020, and attaining carbon neutrality by 2030. It invested heavily in energy efficiency improvements, and built a 1.6-megawatt wind turbine and installed two solar arrays with a total 1.1 megawatts of capacity.
Getting to carbon neutral may be difficult because of limits on net metering in Iowa.
“We are not in a position where we can add any more wind or solar because we’d be back feeding it onto the grid,” said Jim Martin-Schramm, a religion professor and coordinator of the college’s energy and climate programs. “We can’t net meter it, and as a consequence we can’t get the value of the power. So it’s not financially viable.”
In fact, the school announced last year it was scaling back a proposed solar project because it had deemed it uneconomical to enter into a net metering agreement with Alliant Energy.
The campus has focused on shaving its energy use at peak times because peak energy use determines the school’s demand fee, which Martin-Schramm said accounts for 35 to 40 percent of the school’s electricity bill. He estimates the campus has cut demand by perhaps 10 percent by using more-efficient chillers, and scheduling them to turn on and off at different times.
“But I think we’ve done what we can do in that regard,” he said. “The only other ways to shave demand are to generate power yourself through combined heat and power, or to invest in a battery that you can use shave that peak during a certain period of time.”
When the campus investigated combined heat and power, it discovered what Martin-Schramm calls Alliant’s “prohibitive and punitive” standby tariff. He claims that the standby charge would mean payback on CHP would take 55 years.
So the campus has turned to storage, which Martin-Schramm said will yield “the full value of the power” that the campus solar system produces.
“It’s going to enable us to reduce emissions and save money,” he said. “Both of those goals are important to us.”
Changing economics for storage
Solar plus storage is starting to gain traction across the country, according to Anderson. The big reason: cheaper batteries.
“There’s been a lot of interest in electric vehicles,” she said. “A lot of research has gone into electric vehicle batteries that has brought down the cost of batteries in general. As a result of those falling costs she predicted that, “In five years, we will see storage on a similar trajectory to what solar has done over the past five years.”
Storage also has begun to look attractive in markets with storage incentives, as in California, or those with ancillary-service markets, like New Jersey. And then there are high demand charges, as Luther College is paying, that can make storage look economical by comparison.
Luther’s Board of Regents hasn’t yet decided whether to invest solar plus storage. A committee that looked at the numbers is interested in the potential, Martin-Schramm said. Provided the board of regents endorses the idea, the key will be finding an investor with a large tax bill who’s willing to earn a 5 percent return on a $4 million investment.
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