In Utah, Soleil Lofts signed a unique contract with Rocky Mountain Power to use the batteries as a power source. According to Wasatch Group, the developer in Utah who built and managed the homes, this arrangement helps the utility save generation costs while also helping the developer save money.
Wasatch executives see the virtual power plant as proof that batteries are a smart investment for builders.
“The VPP provides a source of income and makes this property a more attractive rental property,” said Ryan Peterson, president of Wasatch Guarantee Capital, the company’s real estate and investment unit. “One of the reasons we look into renewable energy and solar power is because it brings down operating costs and increases cash flow, a big deal for property owners.”
The Soleil project reaches the intersection of several trends: a transition to clean, renewable energy; the rapidly declining cost of batteries and energy storage, which the Boston Consulting Group says has fallen nearly 80 percent over the past decade; and a push by developers to reduce their environmental footprint.
Battery storage in the US grew significantly over the past year, adding 476 megawatts of storage in the third quarter. This corresponds to an increase of 240 percent compared to the previous quarter, according to the US Energy Storage Monitor.
But it is nowhere near what it takes to support a fully renewable power system. A report from the University of California at Berkeley on the move to renewable energy suggests the US 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 sustainability-focused organization in Colorado. “With the price of batteries in particular falling so much, I would expect a growing proportion of new homes to include these technologies. Virtual power plants are the cheapest and most valuable next thing to be built for the U.S. power grid. “