Business customers sign a 10-year contract with monthly fees, rather than purchase the batteries and solar panels up front.
The litium-ion batteries are produced by Tesla Motors and the same used in Telsa’s electric cars, but packaged with power electronics to store solar energy, provide power to a building and connect to the grid.
The entire system is remotely monitored by SolarCity.
The power rating of batteries will range from tens of kilowatts to hundreds of kilowatts but they will provide at least two hours at full capacity. The smallest battery is about as big as a large refrigerator and many can be linked together.
SolarCity is offering a financing product that allows businesses to opt for energy storage with no capital outlay. SolarCity will be able to use the 30 percent renewable energy federal tax credit with the combined solar-storage installations.
The batteries are designed to reduce power during the hours of peak usage, which are typically in the late afternoon, as opposed to during the night.
Business customers pay demand fees for the maximum power they draw during the month. This varies from region and utility, and for the economics of this to work, businesses need to be paying relatively high demand charges.
SolarCity says it can reduce demand charges by 20 percent by using battery power instead of pulling power from the grid without the customer having to actively manage the operation.
The system uses a cloud-based service to calculate when it’s best financially to store energy from solar panels or the grid and when to use battery power. The battery is also designed to provide backup power to critical functions, such as computers or cash registers, in the case of an outage.
The SolarCity-Tesla relationship extends beyond business. Lyndon Rive, the CEO and founder of SolarCity, is cousins with Tesla Motors CEO Elon Musk, who is also chairman of SolarCity.