Energy Storage Value Streams in Behind-the-Meter ToU Optimization

Introduction to Time-of-Use (ToU) Optimization

Energy storage systems enable multiple value streams, with ToU optimization being a key driver in behind-the-meter applications. ToU optimization involves shifting energy consumption from high-cost “Peak” periods to low-cost “Off-Peak” times, reducing electricity bills. A new white paper from New Sun Road analyzes ToU optimization using PG&E and Mexican Federal Electricity Commission rate structures, detailing how ToU rates with large Peak-to-Off-Peak price differences provide significant savings, especially when paired with solar systems under updated Net Energy Metering (NEM 3.0) policies. Software like New Sun Road’s Stellar platform enhances savings by optimizing battery operation.

Example PG&E ToU Rates from https://www.pge.com/
Determinants of ToU Shifting Value

The value of load shifting is influenced by the Peak-to-Off-Peak price difference, battery efficiency, and usage patterns. For instance, PG&E’s EV-A rate, with a $0.19/kWh difference, enables annual savings of $62.43 per kWh of battery capacity. However, many rates offer lower savings due to smaller price differentials or seasonal variations. Advanced Energy Management Systems (EMS) play a critical role in aligning battery operation with dynamic ToU rates, ensuring maximum value.

Time-of-Use Rate Comparison of Example Rates https://www.pge.com/ and https://cfe.mx
Solar Pairing and Evolving NEM Policies

New export credit structures in California, often called “NEM 3.0”, dramatically lower the value of excess solar energy sold to the grid, making storage critical for optimizing returns. For example, under PG&E’s EV-A rate, stored solar energy used during Peak periods can yield savings exceeding $0.45/kWh, far outpacing traditional load-shifting returns.

The Role of EMS and Case Studies

Maximizing ToU value requires advanced EMS to align battery operation with dynamic price schedules and solar production. Case studies in Mexico demonstrated up to an 11-fold increase in savings using EMS, highlighting its importance in overcoming limitations of standard inverter controls. Platforms like Stellar use schedules and performance reporting to ensure that batteries deliver full value across stacked use cases, including demand response and resilience. Ultimately, ToU optimization is a compelling value stream but must be combined with other benefits like peak shaving and backup power to augment the value of the storage investment.

Energy Storage Value Streams: Behind-the-Meter Time-of-Use Optimization

For more details and the case studies, access the white paper here.

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