As the price of energy storage systems continues to decline and their value increases, more residential energy storage systems are installed by homeowners in the United States each year. These residential storage systems may have incredible value for local grid operators. Their successful integration will require collaboration among all relevant stakeholders, utilities, homeowners, residential storage suppliers, and regulatory agencies, to improve grid economics, reliability, and security. Regions opting to leverage the unexpected resource of installed residential energy storage may find that it benefits all utility customers from storage technology.
With an increasing deployment of battery residential energy storage systems, these residential storage assets come with a certain scale and density to provide grid services that create value in multiple ways:
Residential energy storage systems can reduce the peak load on the local grid and optimize the load on individual circuits, making local nodes safer, more reliable, and allowing utilities to defer some capital upgrades. Reducing peak energy demand in bottleneck areas can lower energy costs. Improving power quality and protecting grid-connected equipment from disturbances like voltage spikes can extend the lifespan of equipment. However, before the potential of residential energy storage systems to provide grid services can be realized, some changes need to be made:
Customers need assurance that their battery residential energy storage systems are reliable even when the storage system is also used for grid services.
Distributed Energy Resource (DER) aggregators indicate the reliability of battery residential energy storage systems.
Utilities need to develop tools (or collaborate with aggregators) to forecast when and where these batteries can supply the grid.
Regulatory agencies need to formulate rate structures to minimize average costs of the system, create incentives to integrate residential batteries into a valuable grid, and avoid duplicative subsidies for capital-rich customers.
To start this journey, utilities and residential energy storage suppliers can establish partnerships, prioritizing the adoption of battery residential energy storage systems in areas with the most strained grid supplies. Similarly, collaboration on dispatch software requirements can significantly lower system integration costs.