Cut Operational Costs With Energy Storage

By: Pivot Energy

November 9 2021

Energy storage is steadily gaining popularity as it offers a host of benefits to businesses of all sizes, especially when paired with an onsite renewable energy source such as solar. Energy storage can be leveraged in many ways to help businesses save money, reduce operation costs, and increase energy independence. Here we will explore how energy storage achieves all of these things and explain why it is a wise investment for businesses today.


Load Shifting 

Your business likely does not operate 24/7. It might not even operate for the majority of the day. If this is true for you, then your business’s energy use remains relatively even most of the time and only peaks during certain hours of operation. This can lead to unnecessarily high utility costs, primarily due to your utility demand charge. A demand charge is a component of your utility bill based on the maximum power that your facility consumes during a given billing cycle. Peak demand charges typically account for 30% to 70% of a commercial customer’s total monthly electricity bill. Especially if your energy consumption is “peaky” – meaning it spikes and falls throughout the day – your demand charge is likely inflating your operating costs and negatively impacting your bottom line.


Demand Charge Graph



But the good news is that battery energy storage can help you lower your demand charge costs through peak shaving. Peak shaving is when energy storage systems are strategically discharged during high-demand periods, effectively lowering grid electricity consumption and reducing demand charges. And don’t worry about managing this strategic energy charge and discharge yourself because it is performed entirely by an autonomous AI system. 


In addition to demand charge reduction, energy storage also allows customers to reduce their time-of-use (TOU) electricity costs. You can avoid paying expensive on-peak electricity rates by charging your battery when energy prices are low during off-peak periods and dispatching it when prices are highest. 


TOU rates are based on time of day, day of the week, month, and season, and they vary by utility, so different customers are subject to different rates. It can be helpful to consult a trusted solar developer like Pivot Energy to learn more about the TOU rates in your area so you can plan your energy storage system accordingly.


Back-up Power

Another benefit of energy storage for commercial solar customers is back-up power in the event of a grid shutdown. Losing power to your facility is not only inconvenient, but it can also be extremely costly in the form of lost production and increased energy required to restart equipment once the grid comes back online. And for certain businesses, like those that rely heavily on 24-hour refrigeration, the cost of losing power can be even higher.

There are two types of back-up power commercial customers should consider: partial back-up and whole system back-up. Partial back-up is great for businesses that only need select devices to remain online at all times (these high-priority loads are often referred to as “critical loads”). With partial back-up, you identify which devices you need to stay online in the event of a blackout, and the developer will size your energy storage system accordingly. On the other hand, a whole system back-up allows your entire system to remain online in the case of a grid shutdown. 

The peace of mind afforded by whole system back-up is undoubtedly attractive, but outfitting a large commercial facility with whole system back-up can be pricey and, in some cases, unattainable. It is a good idea to consult an energy storage specialist like Pivot Energy to help you assess your business’s energy storage needs and identify the appropriate battery size for your business’s bottom line.


Benefits of Getting Energy Storage Today

There has never been a better time than now for businesses to invest in energy storage. First of all, you can enjoy the reduced operational costs mentioned above as soon as your system is online. Secondly, the federal government currently offers a tax incentive known as the Solar Investment Tax Credit (ITC), which gives businesses a one-time, dollar-for-dollar reduction on corporate taxes for installing solar. Under this structure, commercial energy storage is eligible for the 26% investment tax credit if installed with and charged by a solar energy system. 

However, if you plan to take advantage of the ITC, it is best to start planning for your solar + storage system now. The ITC is currently 26% of topline project costs for solar arrays that contract or begin construction in 2021 and 2022. For projects that start in 2023, the incentive drops to 22%, and starting in 2024, it falls to a permanent 10%.


Energy Storage with Pivot

Pivot Energy has an experienced team of experts ready to help your business maximize the benefits of solar and energy storage. Contact us today and we will help you determine the best system for you.

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Together, solar and storage offer the unique ability to lower both demand and energy portions of a customer’s electricity bill.