In Utah, Soleil Lofts signed a first-of-its-kind deal with Rocky Mountain Power, which can tap the batteries as a power source. This arrangement helps the utility save generating costs while helping the developer save money, according to the Wasatch Group, the Utah developer that built and manages the apartments.
Wasatch executives see the virtual power plant as proof that batteries are a smart investment for building owners.
“The V.P.P. provides an income stream and makes this a more attractive property to rent,” said Ryan Peterson, president of Wasatch Guaranty Capital, the firm’s real estate and investment unit. “One of the reasons we’re looking at renewables and solar is that it reduces operating expenses and increases cash flow, a big deal to real estate owners.”
The Soleil project arrives at the intersection of several trends: a transition toward cleaner, renewable power; the rapidly shrinking cost for batteries and energy storage, which dropped nearly 80 percent in the last decade, according to the Boston Consulting Group; and a push by developers to reduce their environmental footprint.
Battery energy storage in the United States grew substantially last year, adding 476 megawatts of storage in the third quarter, a 240 percent increase from the previous quarter, according to the U.S. Energy Storage Monitor.
But it’s nowhere near what’s needed to support a fully renewable power system. A report by the University of California, Berkeley, exploring the shift to renewable power suggests the United States would need 150 gigawatts of storage to achieve a 90 percent clean energy grid by 2035.
“We are at a turning point,” said Mark Dyson, a clean-energy expert at RMI, a Colorado organization focused on sustainability. “Since price points have come down so much, especially for batteries, I’d expect a growing fraction of new homes will incorporate these technologies. Virtual power plants are the cheapest, most valuable thing to build next for the U.S. power system.”