Article Published April 2, 2024 on PowerMag.com

On the individual level, it’s important to determine priorities when deciding where to start electrifying. For most, beyond replacing the heat pump or gas boiler, many will consider installing a home solar-plus-storage system—partly or completely relying on energy generated by solar to power their homes. With a solar-plus-storage system, the battery serves as the management hub of the home, controlling energy usage, consumption, and discharge completely independent of the grid. The battery’s software gathers and analyzes historical data and usage trends to determine the most effective use of stored solar, while consumer-facing software enables homeowners to control the modes of operation. From an energy resilience perspective, lower bills and reliable backup power are among the best reasons for electrifying a home (Figure 2).

On the grid level, multiple solar-plus-storage installations in a given location unlock additional grid support and capacity in the form of DERs. Depending on whether the systems are Open Automated Demand Response (OpenADR) compliant, planned or anticipated changes in grid demand can be communicated to the systems (or the asset owner, if the fleet is owned by an entity) to determine the appropriate number of systems required for adequate resource distribution. Further, the ability to shave peak load impacts wholesale energy prices; lowering demand at peak times reduces the operating costs of grid resources, thus lowering retail electricity rates. Rather than requiring localities to spend infrastructure funds on new substations and transformers to adjust to increased demand, operators that manage solar-plus-storage system fleets can provide those resources.

Although electrification technology is well-established, the next step is to advance regulation and policy to keep up the momentum. According to the U.S. Energy Information Administration, only 26% of U.S. households used electricity as their only source of energy. Additionally, fewer than 5% of homes in the U.S. have solar installed, with the highest share of installations in regions with favorable incentives and policies.

States have varying priorities. For example, just this year New York state passed the All-Electric Buildings Act, requiring by 2026 that all buildings under seven stories be fully electric. By contrast, in California only 5% of new-builds are built with heat pumps, and 95% still rely on gas heating.

Meanwhile, residential solar policy continues to evolve. Among recent developments is net energy metering (NEM) 3.0 in California, which reduced compensation rates for homeowners delivering excess electricity back to the grid. The residential solar-plus-storage workforce is also impacted as reduced incentives lead to fewer installations. To make full electrification a reality, not only must policy favor the widespread implementation of electric technologies, but the implementation of said technologies must be more broadly available.

Accessibility

A key aspect often overlooked in the conversation around electrification is accessibility. If the goal is to maximize the amount of DERs via solar-plus-storage systems installed, we need to look at every level of adoption.

The traditional model of consumer home solar-plus-storage is often cost-prohibitive to homeowners of low-to-moderate incomes (LMI). While homeowners can access many online resources that estimate the cost of adding solar to their home, the cost can be upward of $20,000 (even with federal tax credits applied). To put this into perspective, the cost of installing solar can be equivalent to most of a full year’s salary for an LMI homeowner. LMI homeowners are thus often shut out from the benefits of a home solar-plus-storage system, which include reduced energy bills; reliable backup power; financial incentives via tax credits; and energy security in the face of extreme weather conditions, public safety power shutoffs, or grid failures.

So how do we achieve widespread adoption? We need to break down the systemic and financial barriers LMI homeowners face. According to the U.S. Department of Energy, LMI homeowners face among the highest energy burdens in the country due to utility rate increases disproportionate to income, reliance on high-cost fuels like propane, and energy-inefficient housing. As a result, 44% of the total households in the U.S. that are defined as low-income struggle with energy costs that are three times higher than other households.

Additionally, many LMI homeowners, especially in rural areas, do not have the same opportunities to access clean technology resources, due to financial, social, or geographical limitations. Lack of qualifying credit or income prevents LMI homeowners from participating in traditional methods of obtaining solar-plus-storage, as they are unable to meet the financial requirements necessary for loans and installation. Utility or tax incentives alone are not enough to offset the investment.

Delivering electrification systems to LMI homeowners is a proven method for enabling energy resilience, supporting decarbonization, and reducing financial burdens in homes and communities. Often termed “Home Power Programs,” innovative business models from technology providers who partner with community organizations, cities, towns, and municipalities to provide low-to-no-cost electrification resources, like solar-plus-storage, are becoming more popular. Through power purchase agreements (PPAs) the partnering organization, city, or municipality is able to provide LMI homeowners with a complete solution at no upfront cost for the PPA’s contracted amount of time. Bypassing the traditional consumer loan model for traditional solar-plus-storage, these city-vetted contracts are accessible to homeowners regardless of credit history, financial background, or income.

With financial barriers removed, LMI homeowners are able to reap the benefits of clean energy systems. By electrifying their homes, they can save a significant percentage on their utility bills, utilize stored backup power when widespread outages or extreme weather hit, and reduce reliance on the unreliable grid system to keep the lights on. Home Power Programs also benefit entire LMI communities by improving energy reliability and quality of life with reduced greenhouse gas emissions, while supporting the local economy with job creation. Implementing programs and systems that deliver the benefits of clean energy to individual households and communities most in need builds essential energy resilience for the betterment of our people and planet.

Total electrification isn’t a “what if?”—it’s a “how soon?” Advances in technology are helping drive the electrification movement, but policy, regulation, and innovative business models will accelerate success. When accessibility is factored into the equation, the opportunity for both widespread solar-plus-storage adoption and access to the benefits of electrification are unlocked. Electrifying homes beyond heat pumps or electric stoves will not only support grid function and capacity, but will enable DER networks to unlock resilience and reliability on both sides of the meter.

—Frank Magnotti is CEO of Electriq Power.

Initial publication can be found at https://www.powermag.com/expanding-access-and-growing-der-networks-for-a-smarter-future-grid/