SolarCity freezes energy storage program as utilities resist grid connections

SAN FRANCISCO -- SolarCity Corp., the biggest developer of U.S. rooftop solar panels, halted efforts to install and connect systems that include batteries for power storage because California’s utilities are reluctant to link them to the electric grid.

About 500 SolarCity customers in the region have agreed to use the systems, and the state’s three biggest utilities have connected 12 of them since 2011, said Will Craven, a spokesman for San Mateo, California-based SolarCity.

SolarCity is testing the units with photovoltaic panels to generate power and batteries that retain that energy for use when the sun isn’t shining. The combination makes customers less dependent on local utilities. It may be a threat to the business model that’s underpinned the power industry for a century.

“We’ve stopped submitting applications because we’ve lost faith that these things are actually going to be carried out in any reasonable time,” Craven said in a phone interview.

The utilities require a series of applications and fees that Craven said makes the process too onerous. SolarCity has installed a total of 65 of the systems in areas overseen by PG&E Corp., Edison International’s Southern California Edison and Sempra Energy’s San Diego Gas & Electric. “The ones we have submitted haven’t gone anywhere,” he said. Homeowners with rooftop panels buy less electricity from the grid, and those who use batteries to store power may need to purchase even less.

Utilities Reply

The utilities say they support the use of solar power and new technologies such as batteries that promote energy efficiency. They also note that storage is a relatively new capability and that it will take some time to properly assess how to add it to the grid at fair pricing.

David Eisenhauer, a PG&E spokesman, said it takes about eight to 10 weeks to handle applications and the utility has processed eight of the 20 it has received. “Because battery installation is such a new technology,” he said today in a phone interview. “We’re still working to find more efficiencies in processing the applications.”

San Diego Gas & Electric said there is “an ambiguity in the existing tariff language” regarding storage and it’s working with regulators to determine the appropriate fees, Hanan Eisenman, a spokesman, said in an e-mail today.

Copyright 2014 Bloomberg

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