In Utah, thousands of homes feed the grid stored solar power

Utility Rocky Mountain Power teamed with sonnen to set up a virtual power plant that’s thriving. Now it plans to expand the model across Utah and Idaho.

A large orange mesa in the desert
A mesa near La Verkin, Utah (Jim Lane/Education Images/Universal Images Group/Getty Images)
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During the hottest days of summer, virtual power plants are popping up everywhere. 

Some 4,000 home batteries helped keep households cool across Vermont during a recent heat wave while saving customers a collective million dollars. Tesla organized a few thousand customers in its home state of California to use their batteries to help during grid emergencies in exchange for cash. That network kicked in during July — and was heavily publicized by user screenshots from the Tesla app.

But there’s another network of household batteries that help their owners while helping the grid, and it’s in a place known more for pioneering with wagons than for pioneering climate and energy policy. In Utah, Rocky Mountain Power, the utility that serves most of the state, is actively controlling thousands of batteries in customers’ homes, on a daily basis, and paying them directly for helping the grid through its Wattsmart program.

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Rocky Mountain Power’s vision for the program is that all solar customers will also install a battery,” said utility spokesperson Brandon Zero. Our goal is to have thousands of customers and hundreds of megawatts enrolled in Wattsmart.” 

That’s a lot of scale for a concept that’s only recently leaped from the energy-futurist wishlist to commercial operation in the territories of a few forward-thinking utilities. The Utah program is all the more striking for succeeding in a state where electricity prices are low and there’s little policy support for the traditional rooftop-solar business model. 

Rocky Mountain Power does not offer full retail-rate net-metering for households with rooftop solar arrays; if the households export excess power to the grid, they earn less than they’d pay to buy that power. Utah is not shelling out cash to encourage rooftop-solar adoption the way other states do. 

The U.S. branch of German home battery company sonnen saw an opening in Utah to move beyond conventional rooftop solar and pitch battery-equipped solar systems. It found an installer partner in the state called ES Solar that was willing to completely overhaul its sales tactics to emphasize what batteries can do.

The consumer can see this is the solar of the future,” said Blake Richetta, CEO of sonnen’s U.S. business. Not [just] a solar panel on your roof, but a solar array plus battery, with the utility seeing value.” 

Adding a battery lets Utah homeowners store solar power throughout the day and consume it into the night, instead of dumping surplus generation onto the grid for meager compensation. The batteries also provide backup power during outages. And now, thanks to the Wattsmart program, residential customers can get paid by their utility for allowing their batteries to be used to support the grid as part of a virtual power plant. 

Cost is the main obstacle deterring customers from adding a battery to their rooftop solar package. Home battery products typically cost around $10,000. But the recently extended federal tax credit lops off 30 percent. Then Wattsmart offers an upfront payment of $400 per kilowatt of battery capacity enrolled, plus an annual participation credit of $15 per kilowatt. A typical 5-kilowatt system earns $2,000 cash upon registering and another $75 annually.

Between the tax credit and Wattsmart payments, a homeowner can get a battery for about half of the list price. 

With the program, it makes solar by itself look way inferior in Utah,” Richetta said.

So far, 3,000 Utah households are participating or in the process of getting enrolled. That’s not far behind the 4,000-person virtual power plant in Vermont, which has been building up since 2015. In joining Wattsmart, customers aren’t isolating themselves from the grid; they’re using their energy assets to help meet the system’s needs, daily, with cheaper, cleaner power than what’s pumped out from conventional fossil-fueled plants.

The origins of Utah’s home battery network 

How did the Wattsmart program come to be? Sonnen had been traversing the U.S. in search of a place to replicate the vast fleet of networked home batteries it had set up in its European homeland. When the company reached the seemingly inhospitable shores of Utah’s Great Salt Lake, it cried out, This is the place.”

That was back in 2017. Sonnen initially collaborated with housing developer Wasatch Group to stick a battery pack in each unit of a new solar-powered apartment concept, Soleil Lofts, in a suburb south of Salt Lake City. Wasatch Group also struck a deal with Rocky Mountain Power to hand over the reins for the combined 12.6 megawatt-hours of stored solar power at the building, which opened its doors to tenants in 2019.

Though the batteries sat in people’s living rooms like a household appliance, the tenants had no control over them, nor did they earn bill savings from the batteries or solar operations in the building. But Rocky Mountain Power got a real-world laboratory of distributed solar generation and energy storage, densely clustered at a single point on the distribution grid. 

Pretty soon, Rocky Mountain Power was cycling those batteries all the time — to reduce demand for fossil-fueled peaker plants, assuage grid congestion and deliver the momentary adjustments to the grid known as frequency regulation,” Richetta said. Three years in, the batteries are regularly called upon to inject electricity onto the grid multiple times a day. The utility also used the facility to study what kinds of grid infrastructure upgrades it could defer with the help of energy assets in customer buildings. 

Then they said, Why would we stop here? […] We need to prove this faster and bigger,’” Richetta said.

Taking residential energy storage incentives statewide

Rocky Mountain Power took the battery program statewide in 2020. This version doesn’t require any novel financial engineering with a large real estate interest; anyone who buys a battery can sign up. Rocky Mountain Power parent company PacifiCorp, which is owned by Warren Buffett’s Berkshire Hathaway, then expanded the program to Idaho this year, and it wants to bring the model to its customers in California, Oregon and Washington, spokesperson Zero told Canary Media.

Rocky Mountain Power licenses software from sonnen to control all the distributed batteries as one fleet, responding in real time to the needs of the Western grid. Sonnen adapted the software to integrate battery hardware from other vendors, so the utility wouldn’t be locked in to a single battery provider.

The Wattsmart fleet is currently dispatched to reduce peak grid demand by meeting the post-sunset needs of the households that have batteries so they draw less from the grid. The program also dispatches batteries for five-minute bursts of frequency response. Longer-duration exports to the grid are technically possible, but they would raise issues of fair compensation, given that solar power exported to the grid from home systems is compensated at less than the cost of retail electricity. (Hawaii ran into that challenge in trying to encourage residential battery exports after years of undercutting incentives for solar exports.)

An ever-growing roster of virtual power plants showcases many different ways to operate. Green Mountain Power’s VPP in Vermont earns the big bucks by firing up for monthly and annual peaks on the New England grid. Tesla’s California VPP is authorized for emergency use only. These sporadic interventions focus on high-value moments, but what are they leaving on the table by not operating the rest of the year?

Rocky Mountain Power, by contrast, treats the battery network as a regular part of its operational fleet. Using it every day means generating value every day. Any evening could be the time when a fossil-fueled peaker plant doesn’t need to fire up because the batteries met the last increment of demand. As more variable renewables join the Utah grid, the utility sees the home battery network as a crucial tool to balance out the resulting fluctuations in supply and demand.

Julian Spector is senior reporter at Canary Media.