The state’s aggressive renewables target has forced the issue of storage: Brown wants storage of up to 1.3 gigawatts by 2020. That is reportedly enough storage capacity for traditional solar power plants to service more than 1 million homes. Solar power storage is costly when compared to building new gas plants, and many storage projects were established with the help of stimulus funds which have since run dry. That means utility customers many end up footing the bill, as well as bearing the risks that unproven storage technologies will not deliver on their promise.
“The ratepayers would be on the hook,” said Farzad Ghazzagh, who is analyzing a solar storage proposal for the Division of Ratepayer Advocates, an arm of the California Utilities Commission. Ghazzagh said it is possible that the cost could range between $1 billion to $3 billion annually to install and maintain such a large amount of storage.
Some proponents of solar power argue that ratepayers will benefit because storage enables utilities to avoid building more power plants to meet peak demand, simply by providing extra power for a few hours a day. The Electric Power Research Institute found in a report for California’s grid regulator this summer that the large cost of storage can be economically feasible—provided all benefits are considered.
“We all agree, as we sit here today, storage is uneconomic,” said Tom Werner, CEO of SunPower Corp, at a San Francisco meeting of utility executives this month. “But if you go out five years, I wouldn’t bet against it.”
The solar storage business has had its share of difficulties as it has struggled to bring costs down and prove technologies. Battery maker A123 Systems of Waltham, Mass., and flywheel maker Beacon Power LLC, also of Massachusetts, were among the most high-profile corporations to file for bankruptcy after receiving generous support from the United States Department of Energy.
Solar storage is seen as energy’s “holy grail” because of the efficiency it brings to any grid. For example, California has 51 gigawatts of peak capacity to handle heat that boosts air-conditioning demand, even if only two-thirds of that is needed for most of the year. But without more government money, utilities like Pacific Gas and Electric, Southern California Edison and San Diego’s Sempra Energy and their customers will shoulder much of the upfront costs.
Says entrepreneur Elon Musk, founder of Tesla Motors, regarding solar power and storage: “I am increasingly confident that there will be major breakthroughs in electricity storage tech.”