Full Title: Identifying Potential Markets for Behind-the-Meter Battery Energy Storage: A Survey of U.S. Demand Charges
Author(s):
Publisher(s): National Renewable Energy Laboratory
Publication Date: October 1, 2017
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Description (excerpt):
This paper presents the first publicly available comprehensive survey of the magnitude of demand charges for commercial customers across the United States—a key predictor of the financial performance of behind-the-meter battery storage systems. Notably, it is estimated that there are nearly 5 million commercial customers in the United States who can subscribe to retail electricity tariffs that have demand charges in excess of $15 per kilowatt (kW), over a quarter of the 18 million commercial customers in total in the United States. While the economic viability of installing battery energy storage must be determined on a case-by-case basis, high demand charges are often cited as a critical factor in battery project economics. Increasing use of demand charges in utility tariffs and anticipated future declines in storage costs may also serve to unlock additional markets and strengthen existing ones. This effort is the first to undertake such an extensive review of utility rates. The analysis is based on a survey of more than 10,000 utility tariffs, which are available to approximately 70% of commercial buildings in the United States. The types of customers that are covered by tariffs analyzed in this study are diverse and include private and nonprofit businesses, community facilities, public buildings, and multifamily housing properties, all of which commonly have demand charges in their utility tariffs. The contribution of demand charges varies from customer to customer, but typically ranges from 30%–70%, of the customer’s electric bill.