“Customer-Owned Solar and Batteries: Saving Money and Prolonging Grid Life by 40%”

The growth of customer-owned solar and batteries is proving to be a game-changer in reducing wear and tear on the grid and saving ratepayers money, according to a new paper from University of Texas at Austin researchers. The lead author, Nick Laws, emphasizes the importance of extending the life of grid hardware by reducing stress caused by high electricity demand.

The paper, which is the culmination of Laws’ doctoral dissertation, focuses on incentivizing companies and individuals to invest in energy systems such as rooftop solar, community solar, battery storage, and electric vehicle charging systems. By reducing demand on the grid, these systems can lead to significant cost savings for consumers.

Laws’ model found that without customer-owned resources to reduce demand, the costs of providing electricity would be $7.2 million per year. However, with optimal incentives in place, including compensating customers for reducing their demand, the costs could be reduced to about $4.2 million per year, resulting in savings of about 40 percent.

The paper highlights the importance of utilities and grid operators working with customer-owned resources to maximize the benefits for all stakeholders. While there are challenges in aligning economic incentives with providing cleaner and more affordable energy, Laws believes that proactive measures by distribution utilities are essential in identifying areas that can benefit from non-wires alternatives.

The research affirms the value of customer-owned resources in prolonging the life of grid equipment and reducing pressure on the supply chain backlog for power equipment. Despite the potential for significant savings, the utility business model traditionally focuses on selling electricity and building infrastructure, posing challenges in fully embracing demand-reducing tools.

Overall, the study underscores the need for a shift in how utilities are funded to align economic incentives with providing cleaner and more affordable energy. By leveraging customer-owned resources and implementing optimal incentives, the grid can become more resilient, cost-effective, and sustainable in the face of growing electricity demand and the transition to renewable energy sources.