In Utah, Soleil Lofts signed a one-of-a-kind deal with Rocky Mountain Power, which can harness batteries for power. This arrangement allows the utility to reduce production costs while helping the developer save money, according to the Wasatch Group, the developer in Utah who built and manages the apartments.
Wasatch executives see the virtual power plant as proof that batteries are a smart investment for building owners.
“VPP provides an income stream and makes it a more attractive property to rent,” said Ryan Peterson, president of Wasatch Guaranty Capital, the company’s real estate and investment unit. “One of the reasons we are interested in renewables and solar energy is that it reduces operating expenses and increases cash flow, which is very important to property owners.”
The Soleil project comes at the intersection of several trends: a transition to cleaner and renewable energy; the rapid decline in the cost of batteries and energy storage, which has fallen by nearly 80 percent over the past decade, according to the Boston Consulting Group; and a push from developers to reduce their environmental footprint.
Battery energy storage in the United States increased significantly last year, adding 476 megawatts of storage in the third quarter, a 240% increase from the previous quarter, according to the US Energy Storage Monitor.
But that’s far from what is needed to support a fully renewable energy system. A report from the University of California at Berkeley, exploring the switch to renewable energy, suggests that the United States would need 150 gigawatts of storage to achieve a 90% clean energy grid by 2035.
“We’re at a crossroads,” said Mark Dyson, a clean energy expert at RMI, a Colorado organization focused on sustainability. “Since prices have come down so much, especially for batteries, I would expect a growing fraction of new homes to incorporate these technologies. Virtual power plants are the cheapest and most valuable thing for America’s power system to build. “