Architecting an energy storage solution for a single-family home poses few risks. The battery sizes are relatively standardized, and the payback period is predictable. However, once you move into commercial or utility-scale projects, an entirely new calculus is required.
While it’s possible to impose limits on the variables, the PositivEnergy technology-agnostic approach allows us to architect a project with pinpoint accuracy when possible and insure against the rest.
When you buy a commercial energy storage system from an OEM, you get a one-size-fits-all approach, wherein the system wasn’t designed to your needs. It’s designed for what the manufacturer is already building, and it’s guaranteed not for your use-case but for their design-case. More often than not, these solutions end in project failure. Even if the batteries perform as expected, the project fails to produce a net-positive effect on the balance sheet. In commercial projects, those failures can cost millions.
Unrealistic Architecting & True Cost of Ownership
Setting aside the variables associated with traditional payback modeling, which are now reasonably well understood, architecting an efficient solution that actually pays back before it’s time to replace the batteries requires an unbiased understanding of the True Cost of Ownership (TCO). Even if the battery itself is well-insured, there are dozens of ancillary components in an energy storage system. If any one of them underperforms, degrades, or suffers a catastrophic failure, you run the risk of undershooting your earnings. When buying batteries directly from OEMs, you are limited to their perspective on the TCO, leading to unsuccessful projects, missed opportunities, and confusion about the profitability of energy storage projects in general. Our business is designed to prevent that by designing the entire solution around your specific use case; only then will we bring in the OEMs that meet those needs.
We’re simplifying the process and reducing the risk at every step. Our projects are quicker to market, and our clients are better prepared for the realities of ESS ownership.
We’d like to think that nobody purposefully undersizes a battery just to save a few bucks on the capital expenditure side of the formula. Undersizing a battery produces a deeper discharge. This, in turn, creates an inordinate amount of stress on the system and reduces the lifespan of the lithium-ion cell. When the first iPhones came out, early adopters were complaining about shortened battery life after a few full discharges. Apple ate part of the cost of replacing the batteries, but the owners still had to take $100 out of their pockets. Now imagine that scenario at 10,000 times the scale, and you can begin to understand the risks associated with poorly sized solutions.
Oversizing a battery can be just as disastrous. Oversized batteries in solar-to-storage or wind-to-storage systems may have a hard time charging to capacity, causing the battery to go through its cycles faster than necessary while also limiting the output—and overall operational time. An oversized battery has the added disadvantage of being harder to pay back regardless of the energy source.
Early on, in founding PositivEnergy, we recognized that warrantees and insurance products were not keeping pace with the speed of innovation in the energy storage industry. As in our discussion about mis-sizing, which can cause batteries to degrade faster than they ordinarily would, there are a number of scenarios for which OEM warranties are not equipped. User error, catastrophic failure, and any degradation in performance caused by any piece of equipment attached to the ESS are all scenarios in which a customer may have to pay out of pocket. We fill in all the gaps.
Whether you are building out a renewable energy generation project or are looking to acquire peak-shaving capacity to lower your electric bill, these are the three most common mistakes that end up costing businesses millions. Using a technology-agnostic approach with a bankable warranty ensures the highest possibility of success.