There has always been an interest in ways to store electricity, which technically, can't be stored; electrons need to be converted to either mechanical or chemical energy. In the case of the battery, electrons are converted into chemical energy. Until recently, affordable small-scale residential solar batteries have been the missing link in power storage, however, that's all about to change.
There are two applications for battery storage: residential and commercial. On the residential side there is Elon Musk, an entrepreneur, investor, inventor and the CEO and CTO of SpaceX, CEO and product architect of Tesla Motors and chairman of SolarCity. He recently made headlines by
launching Powerwall, his home storage and utility scale storage solution which reflects his vision to offer every household the ability to produce and store their own power.
Musk is also building RiverBend, a mega plant with SolarCity, based in Buffalo, NY, to manufacture solar panels. The
plant "will make enough panels each year to produce a gigawatt of electricity, or a little more than 1 percent of the nation's power."
Growing Interest for Residential Applications
What's driving this renewed interest in solar for residential applications is affordability, thanks to ventures like Musk's. Right now, if you produce more than you need during the peak time of the day, with the proper metering capabilities that exist in several states, you can sell your excess power back into the grid for a credit and then buy it back at night. It's no surprise that the utilities have an aversion to this scenario because they claim customers are getting a free ride on their system.
If metering is unavailable, another option is to install battery systems. Customers can charge their batteries during the day with the excess power and then either use that for backup power in the event of an outage or just draw down on that power at night, and become more and more self-sufficient.
As batteries improve in efficiency and become cheaper to produce, we'll see them become more economical for commercial applications. Utilities will establish battery storage systems to supplement their needs in any off peak times.
From a lenders perspective, while we are interested in looking at battery storage, we haven't seen many tangible assets to finance at this time. In the case of Powerwall, there would be no need for separate financing because the battery storage as an option would just be integrated into the residential solar rooftop systems that are currently being installed. They would be financed as part of those installed systems or the home owners could add them separately to their systems.
Commercial applications would be more standalone bulk systems and would be attractive because those would be new projects coming to market.
The good news is that there will be opportunities to lend in this space soon. Outside of Musk's ventures, there are several companies that are quite active in advancing storage technologies.
Mike Lorusso is Group Head and Managing Director for CIT Commercial Finance, Energy. In this capacity, he is responsible for overseeing all financing activities within the energy sector of CIT. Lorusso holds FINRA series 7, 29 and 63 licenses. He received a bachelor's degree in engineering from Duke University and an MBA from Fairleigh Dickinson University.
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