Duke Energy Invests $30 Million In Battery Storage

by Anna Gretz
September 21, 2017

Energy storage is marking some big territory.

Duke Energy, an electric power holding company headquartered in North Carolina, just made a huge move, investing $30 million in two huge battery storage projects in its home state. Duke Energy is a regulated utility, and this investment may give us a glimpse into the direction regulated utilities may be moving in the future.

Randy Wheeless, a spokesperson for Duke, said:

“We feel the technology has improved, the price has come down, and we think there are some niche applications where battery use makes sense for the regulated utility.” We agree, Mr. Wheeless. The falling prices of battery storage have made it a much more popular choice in the commercial and residential sectors as well.

Many battery owners tapped into the technology because of the energy security it provides, as well as the ability to take advantage of time-of-use arbitrage in states like California, where prices vary greatly based on the time of day. But now that the cost of the technology has continued its downward slope, battery technology is more accessible than ever to the general public… and utilities have started paying attention, too.

“In a regulated environment, you have to justify these projects to a commission and usually least cost is an overriding factor there,” Wheeless explained. In a conversation about battery storage, whether it’s in a regulated utility environment like this one, or just a residential household, cost always comes up. Many homeowners, like the utility commission, want to see how their investment is going to pay off, and how fast. The conversation has been quickly simplified by the new, low price of batteries everywhere… but in California, government funding makes energy storage so economically viable, solar owners can’t afford not to invest.

We’re talking about the SGIP (Self Generation Incentive Program).

California’s SGIP really is one of the best motivators in the country for homeowners who are looking at installing a home battery to store the energy generated by their rooftop solar panels. California is full of solar-savvy residents, with more residential solar installations than any other state in the country. These energy-generating homes are starting to get storage-smart as well, looking to home batteries to store up the energy their solar panels are generating during the day, so they can use it when they need it the most (usually, that’s in the evenings after the sun goes down.) Fortunately, SGIP makes it easy and affordable for homeowners to install home batteries, thanks to the generous rebate offered by the program for energy storage.

Take, for example, Tesla’s Powerwall 2.

Since the second-generation Tesla Powerwall has a energy storage capacity of 13.5 kWh, it qualifies for $5,400 in total SGIP funding. You read that right: $5,400. The Powerwall battery equipment itself is priced at $5,500, so the incentive covers nearly all of the cost of the battery. Yeah. Really. There are some additional costs involved in Powerwall installation, including the shipping, taxes, and the cost of installation itself, but the Tesla Powerwall is also eligible for the Federal ITC, another investment tax credit for energy storage purchases. The ITC can knock off another 30% off the bill, and make your home battery purchase even more of a no-brainer.

[Yes, we know that navigating the world of rebates and tax credits can be a little complicated. That’ one reason why we’re here--to help apply for funding for you, making sure you get all the incentives you can. You can thank us later.]

But Duke’s huge investment says even more about where the country’s energy future is headed.

The projects that Duke has invested in are a 9-megawatt project in Asheville, and a 4-megawatt project in Hot Springs. The technology they’re putting to use? Lithium-ion batteries. Even though the price of lithium is currently spiking, battery prices have not followed suit. Duke’s taking advantage of those low prices to create a project that will provide real-time support to the grid (in Asheville), and reliability of community power (in Hot Springs). Duke is considering adding a solar facility in Hot Springs down the line to complete the dynamic energy duo.

Duke Energy recognizes that the grid is seriously stressed out. In North Carolina, as well as many other areas around the country, the population is growing rapidly. This means that high-concentration areas have even higher demand than before, and remote areas need better delivery methods.

“Western North Carolina is an ideal spot to use [battery] technology to serve remote areas, or where extra resources are needed to help existing energy infrastructure,” said Robert Sipes, the VP of Duke’s Modernization Project in the Western Carolinas. This specific project has a $1.1 billion budget, which begs the question: Why isn’t Duke investing more than $30 million in battery storage?

Though it sort of looks like a no-brainer to many in the industry, battery storage has yet to prove itself practically in the regulated utilities area. Only 35 megawatts of storage capacity have been deployed by non-public regulated utilities thus far, making Duke’s storage systems the largest projects yet. As Duke’s energy storage assets become more central to their services, proving their immense value in the sector, more companies are sure to jump on board.

“A lot of regulated utilities don’t have them in their territory now, but have seen the promise of battery storage technology and may be looking at projects of their own,” said Wheeless. “Seeing Duke move forward will cause them to look and see how it may benefit them.” Duke Energy has gone from using coal plants, to a mix of gas turbines and energy storage in recent years, modeling a big shift in the way energy is used in the region. They’re confident that the rest of the country is going to start showing a similar shift in the months and years to come.