Hundreds of New Yorkers got free batteries to help clean up the grid

A network of more than 300 solar-powered homes started supplementing the New York grid this summer — the result of an unusual partnership that could unlock more localized clean energy for the state.

Sunrun, the nation’s largest rooftop solar installer, teamed up with utility Orange & Rockland, which serves some 300,000 customers in the suburbs and rural areas northwest of New York City, to make a compelling offer: Households signing up for solar from Sunrun could also get a free LG Chem battery pack, or a heavily discounted Tesla Powerwall.

“It’s kind of hard to turn that down,” said Christian Woods, the energy-storage project manager overseeing the program for Orange & Rockland. If anything, he said, customers were asking if this was ​“too good to be true.”

State funding made it possible, as a 10-year trial run for tapping customers’ clean energy devices to serve the broader grid. The only real catch is that the participating batteries sometimes need to discharge their stored solar power during times when it helps the grid, generally in the high-demand hours between 5 and 7 p.m. But the batteries always maintain a buffer of at least 20 percent capacity, in case customers need backup power during the night.

So far, 325 Orange & Rockland customers have installed the solar-battery systems, and a few dozen more will do so by the end of the year, Woods told Canary Media. This makes the program New York’s largest virtual power plant (VPP), the industry term for aggregations of customer-owned energy devices that are digitally controlled to assist the electricity system.

The utility called on Sunrun to deliver power from the network 18 times over the summer, and will continue testing the company’s ability to respond to day-ahead and same-day requests. The utility is also studying how the program helps to avoid capital-intensive upgrades for local parts of the electrical grid. This demonstration will only contribute about 2 megawatts of aggregated capacity, Woods said. But if the test run succeeds, this kind of thing could be expanded to play a much bigger role in New York’s mission to cut fossil fuels out of its energy system.

“As large-scale deployment sees barriers around siting and interconnection and poles and wires buildout, we have been deploying behind-the-meter residential solar and batteries every day and every month,” Chris Rauscher, Sunrun’s head of grid services and VPPs, told Canary Media. ​“We’re hitting a scale here that is really significant, and when you put them together in aggregations, it’s a utility-scale resource.”

That observation, that small clean energy projects can add up to big things, bears particular relevance for New York. The state has set plenty of self-described ​“nation-leading” climate targets — 70 percent renewable power by 2030, 100 percent by 2040 — but has struggled to build large clean power plants. Officials expect to miss an interim 2030 deadline by three years, after offshore wind deals fell through and with grid-scale battery installations repeatedly lagging behind stated goals.

In contrast to those struggles, distributed solar, like the kind on the roofs of homes and businesses, has shown early success. In fact, New York hit its legally binding goal of installing 6 gigawatts of distributed solar one year ahead of schedule, Gov. Kathy Hochul (D) declared earlier this month.

Rooftop solar alone won’t clean up the grid outside the sunny hours. But rooftop solar plus batteries can serve a broader swath of grid needs, as the new Sunrun program showcases.

What happens when a utility and startup collaborate

The American rooftop solar industry over the years has frequently found itself in an antagonistic relationship with utilities. Solar entrepreneurs have cast themselves as cleaner, friendlier alternatives to the crusty old monopolies they hope to disrupt. Utilities, in turn, tend to throw their political weight behind reducing customer incentives for distributed energy.

This New York project shows what can be achieved when an old-school utility and a new-school solar company team up as partners with complementary skill sets.

“Virtual power plants combine the core competencies of a utility and an aggregator,” Rauscher said. He described the collaboration with Orange & Rockland as ​“a really healthy working relationship.”

This was possible thanks to a funding stream allocated years ago for Reforming the Energy Vision, a once-commonplace but now rarely uttered term for New York’s collection of policy changes to overhaul the grid. The support of state utility regulators, who are legally responsible for pursuing the state’s climate objectives, was also key.

Orange & Rockland and Sunrun signed a contract for the project back in 2018, when home batteries were still very much an up-and-coming consumer product. They spent time developing the program, then Covid hit. But customer installations picked up two and a half years ago and gained further momentum this year.

Orange & Rockland, a subsidiary of Consolidated Edison, brought the detailed knowledge of where on its distribution grid the localized power could do the most good. The utility also pulled out some old-fashioned techniques for reaching its customers about the new proposition: It tabled at local Earth Day fairs, met with environmental groups, and printed up 40,000 trifold brochures that it mailed to every customer living in areas designated by the state as disadvantaged communities, after which 50 percent of enrollment came from those households, Woods said.

Whereas utilities elsewhere jealously guard their central role in the electricity system, Orange & Rockland was content to let Sunrun lead on the mechanics of installing, owning, and operating the solar-battery systems. ​“It’s not our bread and butter,” Woods noted, adding that utility linemen specialize in maintaining the grid, not troubleshooting batteries in people’s homes (the utility also isn’t allowed to own power generation under New York regulations). And Sunrun has spent years installing solar and batteries, and building the software capabilities to dispatch these decentralized assets in a predictable manner. Rauscher stressed that Sunrun’s VPP design makes things easy from a utility perspective: Everything Sunrun needs to operate, it sits in the house (on ​“the customer side of the meter,” in industry parlance).

“We’re not trying to tell [the utility] what their needs are or when their needs are,” Rauscher explained. All Orange & Rockland needs to do is shoot Sunrun an email when planners want the batteries to dispatch, and the company sends the virtual commands.

If email correspondence seems like a low-tech way to conduct the smart grid of the future, Rauscher pointed out that this approach saves ample time and money compared to the laborious integration with a utility’s existing software controls. That makes particular sense for small-scale demonstrations like this one, or in places where long-term funding for a VPP is uncertain.

Virtual power plants across New York?

Solar and battery installations for the VPP demonstration will wrap up by the end of the year. Orange & Rockland is tracking battery response rates and measuring their effects on lowering demand peaks and deferring grid upgrades, and sharing those with regulators on a quarterly basis. Then the utility and regulators will figure out how to expand on this proof of concept.

That conversation will certainly come down to money, specifically how much it makes sense to spend to encourage battery adoption. The current program’s free battery makes it one of the most generous home battery incentives in the nation. But a permanent, ongoing program would have to be collectively funded by utility customers, and that imposes a different calculus.

“We can’t give everyone a free battery,” Woods said. ​“It’s that cost-benefit analysis — what is an amount that would get people interested, and as the utility, we’re not completely losing our shirts?”

Not all the money will need to come from the utility, though: New York is finalizing residential battery incentives as part of its energy-storage roadmap, so state dollars will soon pay down some of the cost. And Sunrun is already monetizing the federal tax credits for solar and battery installations.

So far, the VPP has proven out some fundamentals: When customers have a compelling invitation to participate, they choose to; when the utility calls for battery discharge during high-demand summer evenings, the batteries deliver.

These are things that Sunrun has already proven, at much larger scale, in places like California and Puerto Rico. But Orange & Rockland’s involvement in New York state could elevate the format as a tool to meet the state’s impending grid-cleanup deadlines. That’s all the more necessary because, after years of official encouragement and hundreds of millions of dollars spent, New York still lags behind its energy storage targets, which are key to enabling the state’s renewable energy ambitions.

“Let’s stop talking, let’s start doing — virtual power plants are here,” Rauscher said. ​“Any utility in New York can stand up a VPP.”