SepiSolar Blogs Archives | Page 4 of 8

This post was written by Josh Weiner, Solar Expert Witness & Solar Engineering Expert. Mr. Weiner has been at the forefront of the solar industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility, grid-scale, and ev charging solar and storage applications.

Do you have questions about how the impending reduction of the 30 percent federal investment tax credit will affect solar and energy storage contractors? We did. That’s why we invited Rob Brown, energy strategist at Sustainable Energy and Power to talk with us about how the Investment Tax Credit (ITC) step down will affect system design, state incentives, energy storage projects, and more.

In this month’s SepiSolar video, CEO Josh Weiner and Rob cover how California projects can offset the lost value of the federal tax credit with the state’s Self-Generation Incentive Program. They also discuss how to design solar-plus-storage projects for ITC compliance, ways to meet the IRS physical work test and 5 percent safe harbor test for multi-year projects, and why stand-alone flow battery projects may qualify for the ITC, even if not paired with solar.

Video Transcript

Josh Weiner: Hello, everyone. I’m Josh Weiner of SepiSolar and I’m here with my good friend Rob Brown of Sustainable Energy and Power. And today we’re going to talk about how to prepare for the ITC step down. I’ve been very interested and very happy with ITC for my whole career. Rob, where do you come from? Tell us about your company.

Rob Brown: I run and own an energy consulting firm. I used to work with energy or rather electrical distribution with Graybar, had a lot of experience with them, kind of consulting with commercial and industrial businesses, that sort of thing. And I left Graybar to do that on my own. Now, I just kind of consult with those businesses, client representative, that sort of thing.

Josh: Great. So I think it’s safe to say ITC has a special place in your heart.

Rob: Absolutely. I think that if it weren’t for the ITC, we wouldn’t even have a job, right? We wouldn’t have an industry. So it’s a very big part of what I do.

Josh: Let’s springboard right off of that. Tell me, why has ITC—I mean, this might be an obvious question for most of us live and breathe solar on a regular basis—but why is ITC so important? There’s other countries outside the U.S. that don’t have ITC that do a lot more solar than even the U.S. So why is ITC so impactful and important for our economy, for our industry?

Rob: Yeah, I agree with you. There are places they don’t have the ITC that have more solar than we do, but they also have a different environment here in the United States. We don’t have the same kind of environmental policies to keep coal and those sorts of energy production facilities expensive right here. I was working with a client not too long ago in North Dakota with coal-fired power power plants and super, super cheap energy. Without the ITC, solar doesn’t have a chance. You have to have this sort of program while solar is more expensive in order to incentivize people to go that direction, make it cheaper. And then over time, the idea is that solar gets its legs underneath it, has its own kind of industry presence and the ITC can kind of slowly go away over time like any hopefully any government incentive.

Josh: Yeah, I’m right there with you. Actually, part of me actually thinks the ITC becomes sort of a crutch, you know, to allow some companies who probably even shouldn’t be there to stay there. So I actually look forward to the ITC stepping down. I’m sure I have a lot of colleagues that disagree with that, as I’m sure you do, too. So then why are people, for the most part, concerned about the ITC stepping down? You heard my opinion just now. Why would that be a problem for someone else?

Rob: Well, in my opinion, I think there’s a, like I said before, there’s this kind of incentives need to step down as the industry comes of age. Right? And the issue for me is timing. If it steps down too soon, then the industry doesn’t have its wings yet, hasn’t kind of grown out of its embryonic stage and it dies. But if you keep it on too long, look at the coal industry or corn. Right? You have incentives that are on way too long in these very established industries that should be going away. Right? Solar, it’s just all about that timing. Some people think it’s too soon. Some people think it might be too late. And it’s all kind of the politics around when is the right time.

Josh: What do you think? I know this ITC steps down to 10 percent ultimately and then it plateaus. Residential goes away. Fuel cells go away, too. What would happen if solar went to zero? C&I, utility, all of it. Like if ITC completely went away down to zero percent. Is it the same answer?

Rob: Again, when? If it happened now, that would be catastrophic to many parts of the country, not other parts of the country. Right? I think you’d be just fine. But again, it kind of depends. One of the things that you mentioned kind of previously, I just wanted it not to get us off track. But you mentioned the storage concept and fuel cells and things like that. I have a couple of clients right now that are discussing having a battery storage system kind of paired with their solar and kind of get in before the end of the year before things start to change and step downs. Can I get your thoughts on this? I mean, you’re the engineer, I’m just a consultant. There are certain things that can qualify a battery to be part of the ITC. Is that right? How does that kind of shake out?

Josh: Actually, as we’re talking about ITC, I feel like we tend to gravitate or knee jerk think about solar and renewables. But actually it doesn’t seem like the actual quantity is going to hurt solar, at least depending on where and when that happens. You know, in California versus other areas for sure. But storage is the one that’s still very early stage and still expensive and it needs its incentives absolutely. What I do notice, however, is at least in the case of California, that the rebate program in California actually takes money away from you, from the state. If you’re applying for federal ITC. So in a way, ITC going away, you actually have two options with California SGIP. You actually get more money from the state, if you’re not getting the federal ITC, it’s kind of funny. I mean it makes sense. You know, California doesn’t want you to get paid, they don’t want you to actually run a greater-than-100 percent IRR. I actually think I’m more worried about the ITC impact on storage than I am solar. And so, that’s actually why I in one of SepiSolar’s white papers, which you can find on our Web site at sepisolar.com, we actually do go into some detail about the implications of DC versus AC coupling, because storage, of course, has the 75 percent cliff. You know, if you’re charging storage from a renewable resource like solar, wind, and less than 75 percent of that energy going into the batteries is coming from a renewable source, then you actually lose the ITC. If more than 75 percent is going into the battery, then you get the ITC pro-rata for storage. So it’s a little annoying, a little complicated, but it works.

Rob: But that’s AC coupled.

Josh: Actually either AC or DC coupling, you have the 75 percent cliff. It just so happens an easier way to verify or an easier way to ensure that compliance is with DC coupling than with AC because with with AC coupling you end up having two separate inverters connecting on the AC side. You have to M and V everything, which is a fancy way of saying, measure and verify and count every electron going from the solar into the battery. OK, check. There’s one. There’s two. I mean literally you’re counting electrons or kWh and making sure more than 75 percent leaves from this original from the source and heads to the destination whereas with DC coupling, you can actually, as our white paper suggests on our website, you can actually ensure no M and V by design. The battery actually physically cannot charge from the grid and therefore by deduction all energy going into the battery. If there’s two sources, one’s the grid and one solar, and you can’t charge the battery from the grid by process of elimination, it’s only coming from a renewable source. And then you get that ITC eligibility, that’s really clean.

Rob: So it sounds like by designing it that way, not just DC coupled, but also kind of the what you’re talking about in the white paper and what SepiSolar does, it sounds like by doing that it saves a lot of headache from measured verification, extra equipment, submitting reports to the utility, all that stuff goes away because it’s just designed, right?

Josh: Ironically, two birds get killed by the same stone because the rules for ITC are the same rules for NEM. So when we comply with NEM with a solar-plus-storage system, when we don’t charge that system from the grid, it turns out the utility lets us export that energy from the battery into the grid and get NEM credits for it. I mean, literally it’s a battery exporting those electrons and NEM is a credit reserved for renewable technology. So for a battery to discharge into the grid and get credit for it, it’s kind of groundbreaking. And that was good work that SepiSolar did earlier this year. But then likewise for ITC compliance. Again, if you’re DC coupling and you’re only charging from the renewable source, then you’re also compliant with ITC. So, the same stone kills two birds.

Rob: So back to this client I was talking about, I’m helping them with storage and solar and everything, trying to get in before the end of the year. We come to you. We get this thing designed, right? We have a DC couple. They’re going to put batteries in with the solar. Everything’s great, just like we talked about. What do they have to do to make sure they get this year’s tax credit before it steps down next year?

Josh: So the way we understand it from the IRS, and they released in the middle of 2018 timeframe a clarification, an announcement. It wasn’t a ruling, but it was just a clarification on how this works. There’s two tests that you can meet. One is called the physical work test and the other is called the 5 percent safe harbor test. So the physical work test is, they’re both kind of straightforward in their own way, but the physical work test is if you’re in construction, continue through construction and place the system in service, have a continuous effort of that construction work. You’ve passed the physical work test. So that’s a case where if you started construction in December 2020, but you PTO or you place in service in 2021, you get ITC from 2020. And the same thing with a 5 percent safe harbor. It’s kind of the same vein. You don’t have to necessarily start construction, but if you’re progressing through the work continuously and you’ve expensed, you’ve already put up 5 percent of your money, you’ve spent 5 percent of the total project costs. That also qualifies you for that year’s ITC when you started the work.

Rob: OK. So call it a down payment, maybe 5 percent in December of this year grants me this year’s tax treatment even if it’s completed next year.

Josh: That’s right. and I wouldn’t call it a down deposit. It could even be continuously paid throughout the process. You know, it doesn’t have to be all in like one lump sum upfront fee.

Rob: But that amount has to be paid before the end of the year.

Josh: That’s right.

Rob: OK. So, kind of a curveball for you. So let’s say a $100,000 project. Yeah, my client puts down $5,000 to get their safe harbor. But something happens down the road and there’s a change order. And now it’s a $150,000 project in total. What happens?

Josh: That is a great question. And actually the IRS ruling or, sorry, clarification actually goes through specific examples where that is an example. What happens if there’s a change order? What happens if the project costs go up or down? It does put the ITC at risk. It does. But there are provisions that allow you to keep it depending on the definition of continuous effort. And when the money actually strikes. So, that’s a really good point.

Rob: That’s something to watch out for. I mean, the client that I’m consulting with right now, they have a little bit of cash on hand. They’re just gonna put down 10 percent just to make sure that they get the full 30 percent no matter what happens in the project. But, I just wanted to kind of figure out what the ramifications would be.

Josh: I think that’s a great strategy. Based on my interpretation, my reading of the IRS clarification, they should do that 10 percent and keep continuous work flowing.

Rob: If they just hold off and just wait for it, they lose out on all of that.

Josh: That’s right. The IRS is smart. They’re not going to.

Rob: I’m telling my client things are going to wait. Things are going to pause. The utility is going to take some time. Requests and interconnections are going to take time. But as long as the waiting period is not on my client on the end user customer, then we’re OK. As long as they don’t wait on anything, we should be fine. Would that be accurate?

Josh: Yep. And then there is a final very hard deadline to get to like January 1st, 2022, if the systems are not placed in service by that deadline then you’re really screwed. You lose everything. You lose all ITC.

Rob: Wonderful. Cool. Well, thanks for answering a couple of my questions.

Josh: And then actually one last point that I think is actually really important with ITC are fuel cells. We know we don’t deal a lot of it at least in the solar and storage field. But it turns out flow batteries actually might qualify for fuel cell ITC on a standalone basis. You know, most storage has to be coupled with a renewable source in order to be eligible for that ITC. Because really for all intents and purposes, storage is piggybacking on a solar ITC. But it turns out with flow batteries, since they comprise a fuel cell, and if anybody goes the IRS.gov and you read the definition of a fuel cell, you’ll find that actually flow batteries kind of meet the definition of a fuel cell and on a standalone basis a standalone, no solar, no renewable, just a standalone flow battery storage system might actually qualify for the fuel cell ITC. And that, flow batteries are like this promising technology. They’ve been out. There’s a lot of uptime, a lot of systems installed. It’s great, doing wonderful things, but it’s got this little problem that lithium is super costed out. The supply chain and the technology and the products, they’re ubiquitous now. They’re in our laptops. We’ve got 20 lithium batteries sitting on this desk right here. So flow batteries still need to catch up a little on the CapEx side of projects. And this fuel cell ITC actually really helps make a big difference in that upfront first costs. You know a thing or two about batteries. Do you think the fuel cell ITC, that stepping down like the solar ITC is gonna make implications for storage?

Rob: Oh, yeah. Storage is very much in its infancy and I think it needs as many rebates as it can until it gets on its feet. I think that we are with storage now as we were with solar in 2011, that it’s right in its infancy. We really need to infuse it with some help so that it can get on its feet and then we can do without rebates at that point. But we’re just not there yet.

Josh: So last question. In your crystal ball, when do you think storage comes out of its infancy, if you had to wave a magic wand and just take a wild guess….

Rob: So many factors. I couldn’t answer that. From the different things that I’ve seen, I’m just going to throw a wild guess out there. I’d probably give it 7 to 10 years before it’s really taken on. It’s going to be fast, but it’s going to take some time.

Josh: Awesome. Well, thanks so much for joining us. Please check us out at sepisolar.com. Subscribe to our C&I project newsletter, and follow us on LinkedIn and Twitter. We’re gonna have many more conversations like these with Rob and with others about really important issues that impact all of us. Thanks again for joining us.

Stack of coins is licensed under CC0 BY 1.0

This post was written by Josh Weiner, Solar Expert Witness & Solar Engineering Expert. Mr. Weiner has been at the forefront of the solar industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility, grid-scale, and ev charging solar and storage applications.

Two important qualities for business owners are foresight and leadership. Installing a microgrid at your solar sales office helps showcase both. These are just a couple reasons why your office is the ideal demonstration site for a microgrid.

Without a microgrid, you depend on the electric grid for power. And you might have no backup plan in the event of a prolonged power outage. The problem: prolonged outages are occurring with greater frequency in places like California. To make matters worse, Pacific Gas & Electric Co., the state’s largest utility, has begun preemptively switching off power when wildfire risks are high. Annual wildfire alerts appear to be the new normal in California.

The time is right for microgrids across the country, not just in California. Communities in other states sometimes contend with extreme weather that can threaten electricity access, such as hurricanes. Other states are also adapting to regulatory reforms that are likely to make microgrids more valuable for the end customer.

Lastly, the business case for microgrids is strong. These projects provide a hedge against the consequences of a power outage where you might continue to incur expenses with no ability to generate revenue. For some businesses, costs associated with a single power outage may exceed the microgrid installation cost. Meanwhile, you can use the microgrid as a revenue-generating asset while sourcing electricity from the grid.

Reduce operational risk and increase financial rewards by starting a microgrid project at your sales office.

If you build it, they will come.

Ideal microgrid demonstration site

A microgrid has four components: energy generation, storage, load, and control. If you’ve installed solar and batteries, you’re already well on your way to installing a microgrid.

One way to highlight microgrid installation experience and expertise is to sell a project and take interested parties on tours at a customer’s site. Here’s why it’s better to run tours at your own site:

First, you have complete access to the facility. Scheduling tours will be a cinch. Just pick a time that’s convenient for the customer. No need to work through an intermediary.
In addition, you can discuss project development issues. Talk about decisions related to engineering, procurement and construction from the customer’s point of view. Tell customers about the goals of the project. Explain your process for selecting energy generation, storage, and management technologies. Walk through the tradeoffs between cost, reliability, and code compliance.
You might have no other choice. After all, the microgrid market is still taking root. If you have the capabilities to complete a project but have yet to close on a customer contract, consider developing a project at your sales office first.

Hosting microgrid demonstrations can turn your company’s location into a regional destination for anyone interested in microgrids. Announce the project before you commence construction. Provide ongoing updates right through the first year of operations. Early adopters of rooftop solar and energy storage enjoyed the first mover’s advantage. You can do the same by building a microgrid.

Microgrids protect against blackout risks

In the past decade, wildfires have consistently ravaged the state of California. In October 2019, wildfires in the state forced the evacuation of over 200,000 people from their homes. One study showed that 4.5 million homes are at extreme risk for a wildfire. Consequently, almost every building in California is at risk of losing electricity service.

This year, PG&E debuted a program called the Public Safety Power Shutoff (PSPS). When an area’s weather forecast calls for “heightened fire risk” PG&E shuts off electricity across large sections of the transmission and distribution grid.

Even with this measure in place, the grid may have contributed to at least one wildfire outbreak in 2019: the Maria Fire in Southern California. According to one report from USA Today, Southern California Edison “re-energized a 16,000-volt power line minutes before the Maria Fire erupted nearby … [and] quickly swelled to 14 square miles.”

PG&E says it is developing temporary microgrids to offset the impact of its PSPS program. You may question, as we have, whether the PG&E system design, a diesel generator plugged into a local utility substation, really meets the definition of a microgrid. But you cannot dispute the need for alternative solutions to preserve reliable electricity service at your place of business. Microgrids deliver one of these solutions.

Everyone needs microgrids

As power needs evolve not just in California but throughout the country, the strain on the electric grid is increasing. This reality is creating development opportunities for microgrids.

One of the trends pointing to growth in the microgrid market is the falling cost and increasing deployment of solar and energy storage. Solar and storage are big contributors to microgrid deployment costs. Therefore, once a facility has solar and storage, the additional cost to deploy a microgrid goes down.

Another industry trend is the evolution of the utility business model. Until recently, utilities were vertically integrated businesses that owned generation assets and sought to maximize the sale of energy. But utility ownership of generation assets has declined considerably, and regulatory agencies across the country are incentivizing utilities to shift from maximizing energy sales to maximizing the value of energy. Distributed energy resources—including solar, storage, electric vehicles, and microgrids—add value for the customer and the grid.

In 2018, the US Department of Energy’s National Renewable Energy Laboratory detailed a feasible framework for increased microgrid adoption. NREL discussed a plan for how state policymakers could assist in the development of microgrids as critical infrastructure. There is no disagreement about the value that microgrids have to offer. There’s no question that the future is bright for microgrids. The only question is, who will be the early leaders in microgrid installations?

The microgrid business case

When businesses invest in energy storage, they usually want to identify revenue streams and model an expected return on investment. But the microgrid business case is somewhat different. Think about what happens when the power goes out, and the opportunity costs for your business. You’re paying wages but generating no output. You lose out on existing business and you cannot develop new business.

A microgrid helps put you back in control. Decide how much generation and storage you’ll need to continue business operations during a blackout. Customize the system to balance costs and system size. Extend the system gradually as your energy needs change. You are in the driver’s seat, now.

A microgrid’s ability to provide value isn’t limited to emergencies, either. With energy storage and energy management capabilities, the system can continuously perform demand-charge management, maximize solar self-consumption and carry out other functions that provide value for commercial electricity customers. Think of microgrids as emergency back-up systems that pay for themselves with grid services, so long as the grid is “on.” This means the microgrid works for you whether the grid is “on” (in the form of grid services) or “off” (in the form of back-up “energy insurance”).

Start your next project now

To sum up, there’s never been a better time for solar construction companies to install a microgrid at their sales office. It will help protect your business from lost business in the event of a power outage and expand your business to serve customers seeking microgrids for their own business facilities. Visit the SepiSolar website for microgrid design and engineering resources or to contact our microgrid company for a consultation.

While at the website, check out our white paper on net energy metering (NEM) in California, located in the resources section. The NEM white paper explains how solar-plus-storage projects, including solar microgrids, can qualify for NEM credits.

“Installing solar panels” by Oregon Department of Transportation is licensed under CC BY 2.0

This post was written by Josh Weiner, Solar Expert Witness & Solar Engineering Expert and leads a discussion about safety in energy storage projects. Mr. Weiner has been at the forefront of the solar industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility, grid-scale, and ev charging solar and storage applications.

A recent Greentech Media article brought to light new details about a lithium battery fire at the Arizona Public Service (APS) McMicken Energy Storage facility that occurred in April.

According to GTM, the fire involved a thermal event affecting one battery rack but not a thermal runaway event affecting multiple battery racks. This is very good news, as we’ll explain below. The article also suggests that venting energy storage enclosures to release combustible gases may be a solution. We respectfully disagree.

A few months after the fire, we gave some initial suggestions on how project managers can design risk out of energy storage systems. This post presents our take on the facts as we now understand them.

We still don’t know the root cause of the fire. However, we know enough to conclude that more ventilation is not the best approach to battery fire prevention. We also know that storage projects need a failure plan, and they need to comply with higher standards.

Read on for our recommendations to help energy storage contractors prevent lithium battery fires.

No thermal runaway

After the Arizona fire, an investigation from APS and battery provider Fluence found that only one battery rack containing 14 modules had “melted.” Evidently the fire did not spread to adjacent racks, setting up a more hazardous thermal runaway scenario, which could have added to the fire’s propagation many times over.

This is encouraging. It’s not the failure of a single cell, but rather the propagation of that failed cell that causes all the damage we see in lithium fires. We should understand why the propagation stopped at the rack level. Here are a few possibilities.

(A) The spacing between racks in the system design was wide enough to stop the fire’s propagation in other racks.

(B) The original equipment manufacturer’s design of the battery pack itself helped prevent rack-to-rack propagation.

As the investigation proceeds, we hope to understand not only the root cause of the APS fire but also the design criteria that helped prevent rack-to-rack thermal runaway. APS is reporting investigation updates here. Independent research and third-party lab testing can also produce findings that improve design and engineering for battery safety.

Venting is not the answer

APS director of technology innovation and integration Scott Bordenkircher told GTM that the McMicken facility fire will prompt engineering and design changes, balancing fire suppression with the removal of explosive gases.

A better answer might be to make sure fire response professionals do not open containers designed to enclose and isolate what’s inside. Do we know enough today to arm firefighters with the correct training to protect themselves and suppress fire? A system designed to fully contain explosive gases may be part of the solution rather than the problem. While investigating ways to improve lithium battery safety, it’s also a good idea to explore best practices for first responders.

Root cause unknown

While it is encouraging that rack-to-rack propagation did not occur, the root cause of the APS fire is still unknown. A root cause analysis will help engineers modify future designs to improve lithium battery safety. Following the chain of events backwards to the point of origin (modules within the rack, cells within the module, and down to the cell level) can yield key insights.

If the root cause of the fire was truly “spontaneous,” which is a real possibility when large quantities of lithium cells are manufactured, no design or manufacturing changes can eliminate the possibility of another freak accident occurring. We may have to accept that spontaneous lithium failures are inherent in lithium technology and manufacturing processes. If this is the case, the best we can do is focus on controllable areas of fire suppression, isolation, and safety at the component- and system-level, rather than at the cell- or module-level.

With that in mind, what can energy storage companies do to eliminate or mitigate lithium battery fires? Here are two recommendations.

Plan for failure

In the event of a lithium battery fire, projects need clear and well-documented protocols to assist in fire suppression, cleanup, and investigation. These prevention and remediation plans ought to be provided as part of the project-specific safety plan or permitting process. This would ensure the information is provided to local authorities and site personnel. System design should also be informed by the possibility of system-level or component-level failures. Fire, building, chemical, and electrical safety codes and standards may be consulted and referenced.

For instance, in the APS fire, the bad rack was positioned in the middle of several batteries that maintained a 90% state of charge. As a result, the APS/Fluence team spent 9 weeks removing and de-energizing all of those batteries.

“There was absolutely no playbook,” Bordenkircher told GTM.

If this experience leads to the creation of a proactive project failure plan, that would be a positive outcome. It could help guide future safety code iterations and standards development.

In addition, it is interesting that APS used LG Chem batteries. According to SepiSolar research, LG Chem batteries have among the widest temperature range needed to initiate thermal runaway. LG Chem batteries also have a fire incident history that reportedly led the battery maker to shut down some of its own storage systems in South Korea.

Raise project standards

The risk of a lithium battery fire is lower in residential and commercial applications than in utility installations. The reason: such projects must comply with the UL 9540 and NFPA 855 safety standards. Utility projects, on the other hand, are basically self-regulating.

UL 9540 addresses construction, performance, and testing of energy storage systems, including how the system handles combustible concentrations and fire detection and suppression.

If we hold utility projects to higher safety standards, battery fire risks will go down.

Improve risk management

It’s more important than ever to understand and manage the risks associated with energy storage projects. That’s why SepiSolar is writing about the APS battery fire and why we will continue to write about it.

Our experience balancing cost, speed, and safety in energy storage projects contributed to the development of the new C&I Project Risk Management Guide. Download a free copy today.

Feature photo by Constante Ken Lim.

This post was written by Josh Weiner, Solar Expert Witness & Solar Engineering Expert and announces the new commercial & industrial solar engineering newsletter by SepiSolar. Mr. Weiner has been at the forefront of the solar energy industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility, grid-scale, and ev charging solar and storage applications.

Raise your hand if you’re suffering from too much time and not enough email. Need a second to think about it? Nah, didn’t think so.

This question came up several times as we started developing a newsletter for the people we work with who lead solar, storage and microgrid projects in the commercial and industrial market. We’re pretty sure you didn’t wake up this morning wondering how to fill your time and hoping for a little more email to click on.

We’re all busy. To stay informed, you might read a few articles in the industry press or attend a few conferences and events throughout the year. But the process is inefficient. You might sift through dozens of headlines to find the ones that matter. It can also be expensive. Traveling to a conference can easily cost $1,000 per person or more.

Wouldn’t it be nice to get a concise email once a month that’s filled exclusively with information about C&I projects?

We think so too. That’s why we’re launching SepiSolar’s monthly C&I project newsletter.

The first edition will be published in November. Become one of our first free subscribers. Sign up now.

Why subscribe?

News providers used to try and be everything to everyone. The New York Times still claims to publish “all the news that’s fit to print.” You can buy a plain sweatshirt with the slogan printed in a small box for $85. Any size you like.

A lot of company newsletters fall short for another reason, because they’re too self-promotional. Five years ago, a service that helps people unsubscribe from email lists called Unroll.me published a list of the email newsletters with the highest opt-out rates. The flower delivery service 1800 Flowers topped the charts with a 52.5 percent unsubscribe rate. More than half of subscribers wanted out.

We value your time. So let’s be clear from the start. If you are not a project manager, the head of operations, or an executive who leads solar, storage, or microgrid projects for C&I customers, the C&I project newsletter probably isn’t for you.

However, if you’d like to hear about new ideas in permitting, interconnection, project design and engineering, and more, we think you’ve come to the right place.

In SepiSolar’s C&I project newsletter, you’ll find original content created through a collaboration between our professional engineering and technical sales, who assure that you’re getting high-quality, authentic information, and our communications team, who head up content planning, writing and editing.

We want your ideas

In the months ahead, we have a lot of ideas that we’re excited to cover.

How to discharge batteries from the customer side of the meter into the grid and collect net energy metering credits.
How to resolve the eternal debate over DC coupling versus AC coupling once and for all.
What lessons have we learned from the 2019 APS battery fire.

We welcome your ideas! Please contact us to share topics that you’d like us to cover in the C&I project newsletter. Let us know if you’re interested in contributing an article yourself. And once you’ve seen the newsletter, please share feedback.

The Solar Energy Industries Association’s latest Solar Means Business report, published in July, identified over 7 GW of solar projects delivering energy to corporate solar users, up from 2.5 GW of projects that were cited in the prior year’s report. The growth of C&I projects might seem mind blowing, but it’s still just the tip of the iceberg.

Get ready for much more to come from solar, storage and microgrids. Subscribe to the C&I project newsletter today.

This post was written by Josh Weiner, Solar Expert Witness & Solar Engineering Expert. Mr. Weiner has been at the forefront of the solar energy industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial & industrial, utility, grid-scale, and ev charging solar and storage applications.

Every once in a while, we get a familiar request — a contractor asks to “fast track” a new solar project. We say: Be careful what you wish for. You might just get it.

Our response wasn’t always this way. At one point, customers wouldn’t even have to ask to speed up the design and engineering process. They wanted deliverables quickly — yesterday — and at low cost. We delivered. Sort of.

Soon, we learned that while we could deliver on the front-end, we had too little control over the back-end. We were working too quickly. Customer requests for design changes would come weeks, sometimes months, after delivery of the original plan set. This increased project costs and risk in the long run.

At SepiSolar, we have introduced structure, definition, and organization to the project design and engineering process with discrete handoffs, milestones, stages, and defined activities. We control project costs, timeline, scope, quality, liability, customer success and safety, reducing cost and risk to the project.

We used to try explaining to customers one-by-one why no engineer has the power to expedite projects.

Each project dictates its own timeline according to the project data at hand, the complexity of the project, climate, and other variables that we cannot control. If a commercial property has no as-built plans available, someone needs to conduct a site survey and perform discovery on key aspects of the facility. There are faster ways and slower ways to perform discovery, but you cannot fast-track your way through it.

In other words, the job of the engineer is not to tell the project how much time it has. Rather, we listen and then help the EPC get through it.

Since we have these conversations with some frequency, we decided to take some of our core insights and share them in the C&I Solar Risk Management Guide.

What’s in the risk management guide?

The C&I Solar Risk Management Guide covers the key milestones from starting a project plan set to matching the as-built conditions of a completed project. Milestones include:

Project kickoff
Preliminary analysis
50% design
90% design
Permit plan set
Revised permit plan set
As-builts

Managing risk means having a clear and complete idea of the scope of work up front and catching all components and elements of design and engineering that need to be specified, budgeted for, and tracked. When changes occur, it is usually due to lack of specificity in the original scope of work, or something that nobody saw coming. Surprises increase cost. We don’t like surprises in construction.

By thoroughly defining the scope of work up front and identifying potential surprises that could come back to bite us, we proceed with projects in stages, never getting too far ahead of ourselves without all the necessary information.

Subway, the fast-food chain, recognizes the value of risk management. At the lunch counter, the selection of bread drives the development of the meal. You might ask for the pit-smoked brisket and then wonder why your server holds still, waiting for you to choose between six-inch and foot-long subs made of Italian bread, whole wheat, or something else. You’re hungry. Can’t they go a little faster?

If the server rushed ahead with the wrong bread, there would be an even longer delay as he builds your sandwich a second time. Bad move. Now you’re really getting hangry. Subway’s process won’t set any sandwich-making speed records. But it’s dependable, time and time again.

How to use the C&I Solar Risk Management Guide

Our goal with the solar risk management guide is twofold. First, we want to point out how engineering and design can have a big impact on project success, even though it accounts for a small share of project costs. Second, we want project and operations managers to know what you can expect from a structured, highly organized project design process.

Have a look at the guide. Download a copy of the project milestones, and share it with your team.

How does your project design process compare to ours? Are we following similar paths? Where are the differences? If you have questions or comments about the C&I Solar Risk Management Guide, join the conversation with us on LinkedIn.

DOWNLOAD THE GUIDE

This post was written by Josh Weiner, Solar Expert Witness & Solar Engineering Expert. Mr. Weiner has been at the forefront of the solar energy industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility, grid-scale, and ev charging solar and storage applications.

Lithium battery safety is not rocket science. Manufacturers with a robust set of production data can show customers success rates for their batteries and the conditions that cause batteries to fail. The problem is that very little safety data is accessible to most buyers or the public.

Buyers will always have to decide for themselves how much risk they are willing to tolerate. Some source batteries from a selective group of original equipment manufacturers (OEMs) and pay a premium to avert risks associated with the lowest-priced batteries. But many buyers are operating in the dark, lacking the safety data they would need to make an informed decision.

Consequently, the energy storage industry in its brief history has already witnessed dangerous and damaging lithium battery safety incidents, including the April 19 fire at Arizona Public Service’s McMicken Energy Storage facility. Other notable incidents include a lithium battery fire and subsequent battery malfunction that led the Federal Aviation Administration in 2013 to ground Boeing’s entire 787 Dreamliner fleet. The next lithium battery fire can happen almost anywhere, anytime.

To safeguard against fire risks, ask lithium battery makers the questions about cell production and testing in this post. Battery buyers don’t have to wait for technology development or new regulations. They can bring about a new safety standard by demanding better safety data and buying lithium batteries only from OEMs that make the data available.

Questions to ask about cell production

Some online shoppers go to commerce platforms like Kickstarter for innovative products and products that may be available at a significant discount from an upstart manufacturer. When sourcing lithium batteries, you want to take the opposite approach. Instead of pursuing innovative products, look for proven products that have a long track record of consistent production. Instead of hunting for discounts from unknown suppliers, expect to pay fair value for a product that has completed a rigorous safety analysis and achieved an exceptionally low failure rate.

How many battery cells and battery packs does your supplier produce each year?

One lithium cell represents one data point. The more cells you produce, the more data you have. As such, the highest-volume producers have the most data on performance, thermal runaway, and failure.

For this reason, an OEM producing 10 million cells per year should have a better understanding of cell safety and performance. Large-volume manufacturers have probably seen every possible failure occur many times. By the same token, a small-volume manufacturer needs more time to analyze and understand cell failure. Buying cells from small-volume manufacturers may carry more risk.

What changes have been made to the battery cell and battery pack production process?

A consistent manufacturing process yields predictable safety and performance results. It’s plain to see that different cell materials bring about different cells. But different production equipment can affect safety characteristics just as much. Even if the materials and equipment stay the same, a manufacturer that relocates production may alter a host of environmental conditions and other variables that affect results. Changes in relative humidity, temperature range, and impurities in the air can impact safety characteristics of lithium cells. Differences in quality control and other processes introduced by a new manufacturing technician crew can also have an effect. All these changes should be understood and quantified in a prudent lithium battery safety analysis.

How does your supplier handle material acceptance and storage?

Even if everything goes right during the manufacturing process, pre-production material acceptance and storage can affect lithium battery safety. About five years ago, a global supplier of solar inverters experienced a series of product failures after electronic circuit boards had been stored in the wrong warehouse and exposed to moisture. Once product assembly was complete and the inverters were energized, a short circuit on the boards caused a fire and led to quite a bit of property damage. While moisture can also affect battery cell safety, so can other environmental conditions, such as air impurities and particulate matter.

It’s not easy to perform a safety analysis that identifies failure points for battery cells. To test how moisture affects safety, you would have to take identical cells and store one of the cell materials in an environment that gets wetter in small increments until you find a statistically relevant number of failures. Then you would have to repeat the process with incremental changes in temperature, dust, and other variables. Testing would require a lot of cells, a lot of minor changes in cell processing, a lot of time, and a lot of analysis. And it would all have to be done without vastly increasing cell production costs.

What are the failure rates for your supplier’s battery cells and battery packs?

In the absence of industry-wide standards, contractors seeking assurances about product safety have their work cut out for them. First, they have to request failure rates and analysis from each of their suppliers. Then the manufacturers must provide the data. Next comes the subjective test. If the contractor feels comfortable with the risk, he or she can decide if the battery quality is adequate. Different contractors have different tolerance levels for quality. A contractor who installs one small system per year may not place a great deal of emphasis on quality. The chances of failure are small. However, contractors installing many large systems must pay more attention to quality. Their businesses depend on the successful operation of a much larger population of cells.

Consider an OEM with a 99.98 percent success rate for battery cells in the first three years of operation. That translates to a 0.02 percent failure rate. If a contractor installs 1,000,000 cells per year, the contractor can expect 600 cells to fail. [Multiply failure rate (0.0002) x annual production (1,000,000) x number of years (3).] This might be an unacceptable level of risk. On the other hand, if a contractor installs 10,000 cells per year, the contractor can expect 6 cells to fail. This level of risk might be no big deal, so long as those cell failures don’t propagate to the entire pack or the entire storage system.

Questions to ask about cell testing

We all know not to leave a fireplace unattended or a gas oven running when nobody’s home. We understand that doing so introduces a serious risk of fire. But how many people know the temperature threshold that is likely to cause a lithium battery to catch fire or explode? Before procuring lithium batteries, especially those that will be sited at a building where people live or work, be sure to understand the conditions that create lithium battery safety hazards. Safety hazards that start in a single battery cell can quickly spread to the battery pack and the entire energy storage system.

What are your supplier’s battery cell thermal runaway characteristics?

It’s important to understand how a battery cell responds to the conditions that can initiate a fire or an explosion. There are many ways to test lithium cells for these conditions. Some examples are the top nail test, where a nail of standard size is driven with standard force into the top of the battery, and the side nail test, where the same procedure is carried out with a battery lying on its side.

Other tests include the fast heat test, where a battery inside a control chamber is exposed to a rapid temperature increase; the slow heat test, where a battery is exposed to a slow temperature increase, and the overcharge test, where a fully charged battery stays connected to a power source and is continually charged.

What is the probability of thermal runaway for your battery cells?

With test results in hand, you can make reasonable predictions about how a battery will perform according to design specifications. Graph 1 shows how increased temperature leads to thermal runaway. While all five cells exhibit similar power generation as temperature increases, there is a notable difference in how close each cell comes to the failure point represented by the horizontal red line at 160°.

how increased temperature leads to battery cell thermal runaway

Graph 1

Graph 2 shows how constant temperature over time leads to thermal runaway. The battery cell depicted by this graph remains at very low risk of thermal runaway when temperature is held constant at 159°. But a 1° increase in constant temperature vastly increases the probability of thermal runaway. A 2° increase makes thermal runaway a near certainty.

how constant temperature over time leads to battery cell thermal runaway

Graph 2

One of the challenges when characterizing lithium cell failure is calculating at what temperature and over what duration a cell fails. Because the answer is different for each cell, we need to see how different the answers are. What if one cell failed after two hours at 60°, another cell failed after 5 hours at 190°, and a third cell failed after 3 hours at 250°? This data would be difficult to characterize. It seems like almost every temperature is dangerous and could lead to cell failure.

Now what if the data looked more like this? Cell 1 fails after two hours at 160°, Cell 2 fails after two hours at 161°, and Cell 3 fails after 1.5 hours at 162°. This data suggests that thermal runaway is consistent and predictable. If we can find consistent results, we know when failures occur and how to prevent failure by designing systems for lithium battery safety.

How does thermal runaway spread from cell to cell?

This is really a two-part question. For starters, let’s look at how thermal energy from a failed lithium cell gets distributed across neighboring cells. Do all neighboring cells get the same amount of energy from the failed cell? Does one cell get all the energy while the others get none? Do two cells get 90 percent of the energy? Next, let’s look at how much stress an initiator cell applies on neighboring cells. If a failed cell exposes neighboring cells to temperatures up to 120°, the risk of cell-to-cell propagation is low. The risk is much higher if a cell failure has a magnitude of 180°. If energy is distributed unevenly, we would want to know the magnitude of stress for each of the neighboring cells.

What are the conditions that lead an entire battery pack to catch fire?

If cell-to-cell propagation extends to one or two neighboring cells and stops, failure of the whole battery pack or battery module is unlikely. If cell-to-cell propagation extends to hundreds of neighboring cells, it’s far more likely that the entire pack will burn. By understanding when battery packs catch on fire and start heating up the neighboring packs, the system designer can plan for fire detection and suppression systems as required by NFPA 855 and UL 9540A to kick in as a last line of defense.

What are the conditions that lead an entire energy storage system to catch fire?

If a fire containment system fails to contain a fire within the energy storage system enclosure, the charging infrastructure for the batteries may also catch on fire. (Think of a car catching on fire while being pumped with fuel at the gas station. Fire can spread to the gas pump, then the entire gas station.) Once the charging infrastructure is on fire, the entire property, including its occupants, are at risk. In sum, one battery cell failure can lead to the destruction of an entire building and the loss of life.

Demand lithium battery safety data

A safe battery is a well-documented battery. Test data helps engineers, system integrators, system owners, and regulators make smart, effective business decisions. While data doesn’t eliminate risk, it does inform us of the risk. Therefore, data empowers us to make decisions on how to manage, contain, suppress, mitigate, or ignore it. By putting appropriate measures in place, we can reduce risk to an industry-acceptable level. Without test data, a battery might operate safely today, but we don’t know why. Then if conditions change and the battery is no longer safe, we won’t know how to mitigate the risk.

The industry can expect a steady supply of safe lithium batteries as soon as buyers make purchasing decisions conditional on access to safety data. There are many safe batteries on the market. But there are many more cheap, risky batteries on the market. The simple solution is to buy safe batteries—which might mean accepting a higher price.

Contractors should request data from OEMs or look for third-party evaluations from independent engineering (IE) reports or independent test laboratories. The data is not publicly available, or hard to find, which is a serious problem. UL, the “gold standard” in product safety, even has trouble gaining access to this sort of data. So one requirement in the UL 9540 standard is to capture thermal runaway data, even for batteries that pass all the tests. In other words, when a lithium battery goes for the UL 9540 test, the test lab will force the battery into thermal runaway and then document the results to help characterize lithium cell failure.

This post was written by Josh Weiner, Solar Expert Witness & Solar Industry Expert. Mr. Weiner has been at the forefront of the solar energy industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility, grid-scale, and ev charging solar and storage applications.

We’ve seen this movie before. In 2008, project developers in the US prepared for the sunset of the 30 percent federal investment tax credit (ITC), a key source of financing for solar projects of all sizes. Urged on by industry lobbyists, Congress passed legislation extending the tax credit, and President George W. Bush signed it.

In 2016, the ITC was again due to expire. Congress and President Barack Obama gave the tax credit new life, preserving its 30 percent value until the end of 2019. In addition, they established a gradual step down over three years. In 2022, the credit settles at 10 percent for commercial and utility-scale projects. For residential projects, the credit goes away.

As the industry rallies to defend the ITC, this might look like the opening scenes of another sequel. But there’s no guarantee that the story concludes with the same happy ending.

With less than six months till the end of the year, let’s mobilize for the best possible outcome. But let’s also be prepared for expiration of the 30 percent ITC. After all, the tax code, under a mechanism known as the safe harbor provision, allows qualifying projects to preserve the full value of the 30 percent credit as projects advance through the development lifecycle, including projects that come online in 2020 and beyond.

A design and engineering firm can provide crucial assistance as the clock winds down on the 30 percent ITC. Because our services can help qualify projects for safe harbor, developers and EPCs working with SepiSolar can create value while taking steps to show that a project has commenced construction for federal tax purposes.

A specialized firm can also share knowledge about securing tax credits for solar and storage projects and maintaining eligibility throughout the project lifecycle.

Value creation for projects

When a developer engages an engineering firm to begin processing interconnection agreements, perform feasibility studies, and obtain PE stamps for project plan sets, this work buys valuable time for projects to mature.

The benefits to the developer are twofold. Project design work can help keep the 30 percent tax credit in play even after the calendar turns to January 2020. It also creates an opportunity to smooth workflow. Instead of hustling to complete projects in December, developers can start scheduling for the start-of-year “slow season.”

EPCs also benefit by increasing projected revenue. What’s good for the developer is good for the nimble EPC.

While evaluating tax equity for solar projects, consider opportunities to claim the fuel cell ITC for stand-alone storage projects. Vanadium flow batteries qualify because charging and discharging happens in an aqueous state through an embedded fuel cell. The process of preserving the 30 percent ITC is the same for qualified fuel cells as for solar projects.

In addition, SepiSolar can help design solar-plus-storage projects to optimize tax credits for different project risk profiles. To qualify for the ITC, a renewable energy source must supply more than 75 percent of energy to the battery.

In an AC-coupled configuration, electrons must be “counted” and “measured and verified” each time they’re generated and sent to a battery. Depending on generating capacity, storage capacity, and the project use case, it may be difficult to meet the 75 percent rule, thereby putting the tax credit at risk.

In some cases, it might be better to switch to DC-coupling for tighter control of ITC compliance. In a DC-coupled configuration, a project can ensure that all energy to the battery comes from PV and none from the grid. This would not only comply with ITC but maximize it.

Applying for ITC safe harbor

There are two ways to preserve eligibility for the 30 percent ITC under the tax code’s safe harbor provision. A project can start physical work, or it can incur 5 percent of an energy property’s total cost.

Design and engineering generally does not meet the conditions of the physical work test. But these services can be included in the 5 percent safe harbor test. As noted in a 2018 advisory from the IRS:

Construction of energy property will be considered as having begun if: (1) a taxpayer pays or incurs five percent or more of the total cost of the energy property, and (2) thereafter, the taxpayer makes continuous efforts to advance towards completion of the energy property.

To satisfy the continuity requirement over the months and years to come, projects can pay additional amounts toward the total cost, enter into binding contracts to produce project components or the project itself, obtain project permits, or perform physical work on the project.

Consult a licensed tax advisor with questions about how to apply provisions of the tax code to specific projects.

Engineering for safe harbor

Design and engineering services that help a project qualify for safe harbor under the 30 percent ITC can quickly pay for themselves. After all, the difference between a 30 percent credit and the 26 percent credit that kicks in on January 1, 2020, may be greater than the total cost of design and engineering, especially for commercial and industrial projects.

For instance, consider a 500 kW flat-roof solar project with an all-in cost of $1.50 per Watt.

Project cost

$750,000

30 percent ITC (2019)

$225,000

26 percent ITC (2020)

$195,000

ITC difference

$30,000

Estimated design and engineering fee

$15,000

Estimated savings

$15,000

Contact SepiSolar to find out how we can help secure safe harbor for solar and storage projects, extending development and EPC activities past the busy end of year and into the normally quiet early months of the new year.

This post was written by Josh Weiner, Solar Expert Witness & Solar Engineering Expert. Mr. Weiner has been at the forefront of the solar energy industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility, grid-scale, and ev charging solar and storage applications.

At SepiSolar, we get a lot of contractor inquiries about the price of a professional engineer’s (PE) stamp, certifying that a solar project or an energy storage project has been designed to applicable codes and professional standards.

We know where they’re coming from. Price pressure is a real concern for anyone in business. Many project designers obtain PE stamps only when required. And let’s face it. Whether it’s wet ink on paper or a digital mark, PE stamps generally look the same.

But all PE stamps are not the same. The stamp is only as valuable as the engineering firm and the liability insurance that stands behind it. If the firm closes down or the insurance offers too little protection, the contractor carries more risk. Getting a PE stamp also creates an opportunity to increase project value or drive down cost.

Here are three tips to help select an engineer for a PE stamp. Know how to recognize the key differences from one firm to the next. Understand the advantages of working with a specialized, focused and experienced firm. And try to mitigate risk whenever possible, even when a PE stamp is not required.

PE stamp evaluation

Selecting a PE stamp provider should be less time consuming than other decisions you make, like which inverters and batteries to install. Even so, take a page from the equipment vendor selection process. Find out how long a company has been in business. Then find out about customer service, too. At some point, you might want a PE to go to the permitting office on your behalf. Can the firm make someone available?

Look for an engineering firm that checks all the boxes below. Extra time with the evaluation will pay for itself, saving you from ongoing PE stamp price comparisons. Or paying to fix costly errors and omissions leading to property damage or personal injury.

Licensing

A license makes an engineer’s work worth the paper it’s printed on. An unlicensed PE might draft all the same lines and shapes on the page. But you get no assurance that this person has followed the duty of care that PEs swear to uphold. Request a Proof of Insurance (POI) certificate to verify the coverage that a PE carries.

Subject-matter expertise

Think any PE can handle a solar or storage project? You’re setting the bar too low. Competent, experienced professionals know how to couple solar modules and power optimizers, among other things. They have done it many times. A generalist might use your project to figure things out for the first time.

Years in operation

Many PEs have been around for a year or two. SepiSolar has been in business for 10 years. Our experience and expertise bring customers peace of mind. No amount of education or licenses can replace the experience of doing this work day after day. That’s the ultimate value a company can provide.

Flexibility

Change is inevitable, in project development as in life. A firm with a service ethos can work with contractors to make design changes as needed and bring in the appropriate experts to facilitate. At SepiSolar, we once fielded a next-day request for a permit-ready C&I solar design. The ability to fulfill a request like this adds tremendous value for contractors.

Customer service

We do our best work in collaboration, not in a vacuum. SepiSolar has invested heavily in an online customer portal, operations management and project management to provide not only great engineering but reliable, cost-effective and flexible services. We engage in extensive client communication. When you talk to a PE firm, ask how it handles urgent requests, how it ensures customer success, and what systems are in place to do so.

Specialized, focused and experienced

There are three types of PE firms: those that rubber stamp project designs without proper consideration, big corporate firms that take on distributed energy projects as part of larger real estate and infrastructure projects, and specialized PE firms that focus on distributed energy projects.

In California, the Board of Professional Engineers, Land Surveyors and Geologists strives to rescind the licenses of PEs who blindly stamp project plans in exchange for fees. Unlike a rubber stamper, an experienced and specializing PE firm works to remove risks for contractors instead of adding risk.

PEs at big corporate firms generally are not distributed energy experts. Their engineers will be less familiar with relevant codes and standards. As a result, they will spend longer researching them. And they tend to charge a premium for their time. By contrast, an energy-specific firm is less likely to burn so much time because its engineers are already well versed on codes and standards.

A PE firm specializing on distributed energy, like SepiSolar, has reasonable insurance, like a larger corporate firm. Our advantages come from direct relevant experience and strong customer service. Instead of taking time to learn the basics, we can review project designs for errors and omissions, then add value by helping to drive down costs and installation time, where possible.

Minimize risk

Project engineering is a risk mitigation service. That is, the level of engineering you purchase should be commensurate with the level of risk you can accept. After all, nobody is perfect. You want a safety net, even if you hope to never need it.

About 10 to 20 percent of SepiSolar customers get PE stamps as a matter of company policy, whether required by the authority having jurisdiction or not. One such customer is Peter Florin, the owner of Lucerne Pacific, an electrical contractor in Garden Grove, Calif., specializing in commercial solar projects.

“The biggest thing for me is that I feel I’m more protected. If anything really goes wrong, it goes on the PE that stamps the plan,” Florin says. “A lot of times, we can sign our own plans as a contractor. But that’s putting the liability on yourself.”

PE stamps nationwide

If you are a solar or energy storage contractor seeking a PE stamp anywhere in the US, contact SepiSolar to discuss your projects. You can also find information about PE stamps and all our commercial and industrial project services and residential project services at the SepiSolar website.

This post was written by Josh Weiner, Solar Expert Witness & Solar Engineering Expert. Mr. Weiner has been at the forefront of the solar energy industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility-scale, grid-scale, and ev charging solar and storage applications.

If you’ve spent any time in the San Francisco Bay Area, you probably know how terrible traffic congestion is. The 2018 Global Traffic Scorecard found that San Francisco commuters who travel during peak hours lose an extra 116 hours a year. That’s roughly double the time it would take, without congestion, to get to work and back home again.

We’ve been there. SepiSolar’s East Bay office is located close to San Jose and Silicon Valley. But a rush hour trip between destinations can easily take an hour or more. The problem isn’t getting better. Is there anything we can do about it?

One intriguing solution is urban air mobility (UAM), a budding industry that promises to take ridesharing services to the sky, using helicopters and eventually vertical-lift air taxis. In July, Uber plans to begin transporting customers between Lower Manhattan and JFK International Airport. A trip that can take 2 hours in traffic will be reduced to 8 minutes.

In meetings with UAM entrepreneurs and a recent visit to the 2019 Uber Elevate Summit, SepiSolar has committed to the engineering and design of microgrid systems for a new generation of transportation infrastructure. Through our experience getting approvals for solar and energy storage projects, we have solved many of the permitting and interconnection challenges that UAM companies will face.

Bringing together transportation and energy technologies not only helps UAM take flight. As we’ll explain, it also creates a new opportunity for microgrids to scale.

One type of distributed infrastructure meets another

Microgrids and helipads, the takeoff and landing platforms for helicopters and air taxis, have more in common than you might think.

For starters, both are structural systems that need access to the sky. If planned for the roof of a building, a project engineer must show that the roof deck has load capacity to support the weight of either system. In addition, either system must be able to resist maximum wind speeds at the project site.

Microgrids and helipads also have to comply with building and electrical codes and standards. In a young industry, there can be confusion and inconsistency in the way codes are applied from one jurisdiction to the next. Sometimes, even from two inspectors in the same jurisdiction.

Importantly, both systems provide benefits that serve the broad public interest. Microgrids make our electrical systems more efficient, reliable, and environmentally sustainable. Helipads have the same effect on our transportation system. By developing helipads near the most congested transportation nodes—like San Francisco’s financial district, where traffic routinely backs up to the Bay Bridge—the technology can help clear bottlenecks regionwide.

What rooftop aviation can learn from microgrids

Just as fuel costs are an issue for traditional airlines, electricity costs will help determine the success of next-generation helicopters and air taxis. Before asking an electric utility to supply energy for an aircraft fleet, UAM developers should understand how utility fees work.

Large energy users usually pay a monthly demand charge to cover the energy-generating capacity needed to satisfy demand at any time. The demand charge is based on a customer’s maximum energy usage captured during a short period of time.

If you kept the power off most of the day but charged a helicopter with a 100 kilowatt battery just once, the demand charge would be based on the time you spent charging. The demand charge, not including the fee for the electricity itself, could easily cost thousands of dollars per month.

Utility demand charges can make or break a rooftop aviation project.

Instead of sourcing all electricity from the utility, UAM developers can partner with a microgrid company to create a network that generates solar energy, stores energy in batteries, and provides intelligent energy management to achieve the lowest cost of electricity.

The SepiSolar team has industry-leading experience designing energy storage systems for demand charge reduction. CEO Josh Weiner was among the first in the industry to create a financial model showing how to improve return on investment by matching storage system outputs with on-site energy consumption.

Weiner has also applied numerous sections of the National Electrical Code and the UL code for energy storage projects to secure permitting approval in jurisdictions where there were, and in some cases still are, no established protocols for interpreting code.

Scaling urban air mobility and microgrids

UAM today is where distributed energy was almost 20 years ago. It’s a young industry built on promising technology that lacks the uniform standards needed to drive rapid growth. Bring these industries together and you’ll find that the whole is greater than the sum of its parts.

We have already described how microgrids can help UAM scale by providing a cost-effective electricity source. One that uses renewable energy and doesn’t strain the electric grid. But what opportunity does UAM bring to microgrids?

One obstacle to microgrid market growth has been the need to customize systems for each project’s energy consumption needs. Helipads can be standardized. And so can the microgrids that manage their energy supply. Once UAM companies offer a standard helipad and microgrid solution, the industry will truly be ready to scale.

The potential use cases are not limited to moving commuters in and out of the workplace, either. UAM companies can help deploy critical infrastructure. They can deliver food and water in the aftermath of an earthquake, a hurricane, or a flood. Or they can set up evacuation zones to transport people in an emergency.

Together, UAM and microgrids open up new possibilities.

Stay informed

To learn more about urban air mobility, see highlights from the Uber Elevate Summit and the Paris Air Show. During the Paris Air Show, an Airbus-owned company, Voom, which operates an on-demand helicopter service in Brazil and Mexico, said it will soon expand service to the US. The Voom website says the San Francisco Bay Area will be the third service area.

For the latest information on microgrid design, including microgrids for urban air mobility, follow SepiSolar on LinkedIn, Twitter and Facebook.

This post was written by solar storage design expert Josh Weiner, Solar Expert Witness. Mr. Weiner has been at the forefront of the solar energy industry for over 20 years and is an industry leader on solar-plus-storage engineering & design. Josh’s expertise spans both in-front of and behind-the-meter initiatives including residential, commercial, utility, grid-scale, and ev charging solar and storage applications.

A recent fire at a utility-owned energy storage facility near Phoenix, Arizona has implications for everyone who is standardizing around lithium-ion batteries to design storage systems. Since lithium represents about 95 percent of the market, this is a topic of near-universal interest.

Especially for me. My experience with lithium-ion batteries goes beyond the storage system engineering and design work we do here at SepiSolar. Ten years ago, not long after founding SepiSolar, I helped launch Green Charge Networks, an early leader in lithium battery deployments. That’s where I saw technology, product configuration, permitting, performance, and operational risks associated with lithium batteries begin to materialize.

The industry is moving fast to push lithium battery deployment to new heights, but we still cannot easily quantify risks. Nor the costs.

We at SepiSolar are technology agnostic. Our commitment is to openly consider the costs and benefits of all commercially viable design options. Given how many projects appear to be treating lithium as the only commercially viable technology, I encourage developers to reevaluate lithium—particularly after the recent fire in Arizona—and consider flow batteries as an alternative that can be deployed at lower cost, greater speed, and superior safety.

Arizona storage system fire

Reported facts about the fire at the McMicken Energy Storage facility are limited. Based on local media reports, we know that firefighters responded to an incident on April 19. While inspecting the 2 MW / 2 MWh battery system, eight firefighters suffered injuries in an explosion. The cause is unknown. All of the firefighters with the most serious injuries were in stable condition in the days following the blast.

The system owner, Arizona Public Service, switched off other energy storage projects in the aftermath of the fire but, as Greentech Media has reported, APS is not wavering on plans to deploy 850 MW of battery storage by 2025.

The entire industry will be paying close attention when investigators reveal their findings about the root cause of the fire and the ensuing sequence of events. Even now, however, developers can size up the inherent risks that all projects using lithium-ion batteries should address.

Lithium battery risks

Eight years ago, when the US Department of Energy awarded Green Charge Networks a $12 million grant to deploy lithium battery storage systems, I was bullish on the technology. If anyone was a believer in lithium, it was me. Then, one by one, the following risks came to light.

Degradation

Every time you cycle a battery, capacity and efficiency drops bit by bit. Performance on day 30 will not be the same as on day 1. How well does your financial model sold to your client calculate degradation along the performance line?

Thermal runaway

It’s critical to make sure that a battery operates according to its specification. This means when you integrate lithium batteries at a facility, the function of the HVAC system expands from comfort to safety. Now, when an HVAC system requires a little maintenance, it’s not just an O&M concern, but a safety risk. A battery that begins to operate outside of its normal temperature range can experience thermal runaway.

Hazardous materials

Lithium-ion batteries use materials that can introduce safety and environmental hazards if not properly contained. The storage industry needs an effective process for salvaging lithium, nickel, cobalt, or manganese. There’s no need to reinvent the wheel. We can borrow best practices from the solar industry, which has recycling for silicon-based solar modules and collection and recycling of cadmium-telluride thin film modules at the end of their operating lifetime.

Warranty claims

Lithium battery vendors have not yet established a track record showing the warranty claims rate. Or the frequency of warranty claims, which reflects the long-term failure rate for systems operating in the field. Early adopters carry the risk that failures may exceed expectations, straining the supplier’s ability to make good on all claims. In fact, engineers at one large lithium battery supplier have published a peer-reviewed scientific paper saying that lithium batteries are degrading faster than expected and proposing a patent to resolve the issue, suggesting that the risks should be taken seriously.

Human rights

Three years ago, the Washington Post published an expose on cobalt mining practices in Congo, where children help populate the workforce that uses hand tools to dig in underground mines, exposing themselves to health and safety hazards. Cobalt is an ingredient in lithium batteries. The Post has also traced the lithium supply chain from parts of Chile, where indigenous communities have struggled to protect the environment and win local economic benefits from the extraction and sale of the lucrative mineral.

Downstream costs

The low upfront cost of lithium batteries is only part of the total cost of ownership, one that excludes downstream costs associated with operations and maintenance of the batteries, the fire detection / suppression system, or the HVAC system that keeps the batteries within their specified temperature range. A failure to perform proactive operations and maintenance could not only increase long-term costs but void the manufacturer’s warranty.

Parasitic load

As industry analysts have gained a deeper understanding of how much storage capacity is needed to keep storage-integrated HVAC systems running, it appears that round-trip efficiency for lithium battery systems may be lower than originally thought. Citing Lazard’s ongoing levelized cost of storage analysis, Greentech Media has reported that parasitic loads could knock down system efficiency by 17 percent or more.

Advantages of flow batteries

In recent years, I have had many opportunities to compare lithium batteries and vanadium flow batteries side by side, while designing storage systems at SepiSolar and performing battery tests in partnership with Nextracker. The battery test, ongoing since 2017, consists of over two dozen battery types, including 5 lithium batteries, 6 flow batteries and 2 flywheels, plus an ultracapacitor, an advanced lead-acid battery, a copper-zinc battery, and a nickel-iron battery.

Through firsthand experience, one key observation at this point is that the market currently has two leaders in the race to achieve lowest total cost of ownership: lithium batteries and vanadium flow batteries. Vanadium flow batteries have earned a place on the leaderboard based on advantages in cost, performance, installation speed, safety, and design simplicity.

Cost

Please note, first of all, that battery costs vary based on storage system design and use case. The battery cost for a commercial system used principally for demand-charge reduction will be different than the battery cost for a grid-scale storage project designed for transmission and distribution deferral.

That said, Nextracker has shown that vanadium flow batteries can yield a lower total cost of ownership than lithium batteries due to significantly lower O&M costs over 20 years.

Speed

Nextracker has also demonstrated a competitive installation process with vanadium flow batteries. Installation of Nextracker’s NX Flow, a solar-plus-storage solution using Avalon Battery’s vanadium flow battery, requires less installation time and fewer materials than a central storage system due to being shipped “wet.” This means it’s full of electrolyte from the factory. It’s the first battery in the world to demonstrate this feature.

The battery is pre-commissioned and integrated with a 3-port string inverter at the factory. All battery-to-inverter wiring is complete on arrival. Before installation, the construction crew drives piles and installs cross rails to set up a mounting platform. Then the crew places the battery with a forklift and bolts the battery to the platform. Finally, the crew connects DC and AC wiring from the solar array to the inverter. Here is a 3-minute demonstration.

Safety

All plated batteries, including lithium batteries, have inherent safety risks. If you take the positive and negative sides and create a short circuit, the wire can get so hot that it explodes. Firefighters have reported on fires in electric vehicles that get damaged in a car crash, get towed, and catch fire days later.

Vanadium flow batteries have three key safety advantages. First, you can turn a vanadium flow battery off, preventing the device from charging or discharging altogether, and with zero voltage on both the positive and negative terminals. Second, the temperature rise in a flow battery is limited. Even if you short the battery on the chemical side or the fluid side, the temperature rises briefly and then drops, and the battery can be placed back into service immediately with no downtime to speak of. It’s the most boring test you’ll ever see. Finally, there are no flammable, toxic, nor hazardous materials or components. Check out this white paper on energy storage system safety from retired San Jose Fire Captain Matthew Paiss to learn more.

Battery design

Flow batteries are simple by design. They consist of two chemical solutions, one with positively charged ions, another with negatively charged ions. When connected to a generator (actually, a reversible fuel cell) the battery charges by pulling ions from the positive solution and pushing them into the negative solution. When you switch the battery to discharge, the ion flow goes in reverse and generates an electric current. The “secret sauce” of vanadium flow batteries is that the entire electro-chemical reaction happens in a purely aqueous state, which translates to “no degradation,” which translates to “lowest LCOS.”

Trust and visionary thinking

As a licensed engineering firm, SepiSolar’s first obligation is to follow national and jurisdictional codes and standards. The value of our design work depends on our ability to optimize the best products and technologies for the right applications that maximize benefits and minimize costs, all while providing structural and electrical engineering stamps in all 50 states. Beyond that, SepiSolar follows a set of core values that promotes trust and integrity, and encourages visionary thinking.

When customers approach us to design lithium batteries for residential and commercial applications, we do it. When customers ask us to advise them on the tradeoffs between battery technologies, we do that as well, covering all the topics raised here.

Our commitment to promoting trust and visionary thinking compels us to discuss openly the risks (and, therefore, costs) of lithium batteries, especially in the aftermath of the Arizona storage system fire. While we hope the industry can mitigate all the risks, many have not yet been fully addressed. Meanwhile, we owe it to the Arizona firefighters who suffered injury to engage in an open discussion about lithium batteries.

Our customers are remarkably entrepreneurial. We expect that contractors will quickly adapt to market changes by delivering storage solutions that balance cost, speed, and safety.

Please contact us if you want to learn more about engineering and design for storage systems using flow batteries.

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