Could installing batteries under solar panels kick-start the commercial building market?

Yotta Energy thinks batteries could become as common as microinverters on commercial solar rooftops, and has built in thermal safety features to win over skeptics.

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Pairing batteries with solar power has taken off at the utility scale, with gigawatt-hours of storage being installed in markets across the country. It’s also taken off at the residential scale, with almost every top home rooftop PV vendor offering batteries as part of its package.

But the commercial solar-plus-storage market is a tougher nut to crack. That’s partly because of the challenge of commercial solar itself — there’s no standardized design or financing that works for the vast array of commercial buildings, so each installation needs to be customized. It gets even harder when you add in the cost and complexity of designing and installing battery systems to fit individual businesses’ widely varying layouts and energy needs.

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Yotta Energy says it has an elegant and modular solution — pairing batteries with rooftop solar panels themselves. Pilot installations indicate that its system can cut 20 to 30 percent of the costs involved in planning, permitting and engineering the installation of equivalent storage capacity from a centrally located battery.

It’s very cumbersome in a small or medium-size building to figure out where storage goes,” Yotta CEO Omeed Badkoobeh said in an interview last week. Just getting a competent proposal put together for a building is a very arduous and costly proposition.”

We’re removed all those barriers. We’ve made storage an intrinsic part of the solar,” he said.

Now, with a recent $5 million seed round, a contract manufacturing deal with Flex, and a newly introduced system that integrates solar panels, racking equipment and microinverters in one package, the Austin, Texas – based startup is looking for solar installers to bring it to market. That, he said, will give Yotta Energy a chance to scale production of its 1 kilowatt-hour SolarLeaf batteries to bring them into price-competitive range with larger-scale lithium-ion contenders.

We wanted to simplify storage,” said Badkoobeh, who got his start installing solar at the turn of the last decade. Since then, he’s seen microinverter and module-level power electronics from companies like Enphase and SolarEdge move from being untested, panel-mounted replacements for central string inverters to capturing much of the rooftop solar market.

Module-level power electronics have gone this way,” he told Canary Media. Why can’t you do it with a battery?”

Yotta Energy isn’t the only company to hit upon this idea. California-based JLM Energy promised a similar module-linked battery, but closed its doors in 2018. SolPad, another California-based startup, unstealthed in 2016 promising a panel-mounted battery for both residential and commercial application, although its marketing is largely aimed at residential customers.

Everyone’s thought about panel-level storage,” Badkoobeh said. But the technology behind it, and making it reliable and robust, and taking it to market — that’s the tough part.”

Keeping batteries cool on hot rooftops

Badkoobeh highlighted several factors he believes differentiate Yotta from competitors, starting with safety features. Since its 2016 founding, the startup has developed a novel thermal management system that uses no moving parts, based on a ceramic container and phase-change heat exchange technology developed for NASA spacecraft.

We have tailored a phase-change material that for all intents and purposes is a high-grade wax, that has a melting point of 100 degrees Fahrenheit,” said Andrew Tanner, Yotta’s vice president of strategy and growth. Heat that isn’t absorbed by the ceramic envelope is absorbed in the melting of the wax, which solidifies as temperatures drop again.

That can prevent its batteries from overheating to dangerous levels on rooftops exposed to hot summer sun, even when outside temperatures approach 140 degrees Fahrenheit, according to testing with the U.S. National Renewable Energy Laboratory.

The batteries Yotta uses from partner Murata are also lithium iron phosphate (LFP), a chemistry far less prone to thermal runaway than the lithium-nickel-manganese-cobalt-oxide (NMC) chemistry favored by the electric vehicle industry and some stationary storage applications. More and more battery vendors are making the switch from NMC to LFP for this reason.

One big question for Yotta’s approach is how fire departments and building departments across the country will view the potential risk of having batteries on rooftops. We’re going through that right now,” Tanner said. Everything’s been very favorable.” But the novelty of what Yotta is planning hasn’t yet been incorporated into building and fire codes, which makes for some uncertainty.

An integrated solution to cut balance-of-systems costs

As for convincing commercial solar developers and installers that its technology is ready for prime time, Badkoobeh pointed to Yotta’s integration with well-known systems partners, including battery manufacturer Murata, solar PV module maker Hanwha Q Cells, solar racking supplier Panelclaw and microinverter maker AP Systems.

On Tuesday, Yotta announced its latest technology integration with AP Systems: a dual power inverter that can work interchangeably with solar and energy storage. Not only does this streamline the integrated solar-storage proposition, Badkoobeh said, but it also meets rapid shutdown” regulations under the National Electrical Code that are being adopted in many states for new rooftop solar systems.

These new regulations require individual solar panels to de-energize during fires to protect firefighters on rooftops. This mandate for some form of panel-level device on all new rooftop solar installations is expected to further improve the economics of module-level power electronics systems like SolarEdge, Enphase, Tigo and AP Systems against centralized string inverters.

Finally, there’s Yotta’s concentration on a key underserved market — smaller-scale commercial installations. Storage pencils out today for commercial at some scale,” Badkoobeh said. But the major vendors in this space such as Stem, Engie Storage and Enel X are focused on doing stuff that’s megawatt-hour and above. Less than that, they try not to dabble with because of all the variability in costs.”

But that focus on a certain size of project leaves out roughly half of the commercial solar market, or 90 percent of potential projects, he said. Yotta’s modular approach allows storage to be done in a more incremental approach, that allows it to pencil because of various economics.”

This chart indicates the up-front savings that Yotta’s approach can achieve in terms of the balance-of-systems costs that go into designing, permitting and installing a commercial solar system, such as avoiding the need to find a good location, lay a concrete pad, build an enclosure and install the electrical connections for a central battery. Operational efficiencies are also gained from capturing the direct current (DC) power from solar panels in Yotta’s batteries before it’s converted into alternating current (AC) by the microinverter, reducing conversion losses.

Image credit: Yotta Energy

Yotta has done several trial installations in California for its target market of sub-500 kilowatt systems, and we’ve come in typically 20 to 30 percent less on an installed cost basis,” Badkoobeh said. Now, he conceded, the big challenge is to bring down the costs of its core battery product to compete with the consistently falling costs of its central battery competitors.

This is our Gen 1 product. As we get to higher volumes and improvement in design, we’ll drive down cost,” he said. 

Looking to break open the commercial solar-storage market

From a product market fit perspective, they have correctly identified the market need,” Chloe Holden, energy storage analyst at Wood Mackenzie Power & Renewables, said of Yotta’s proposition. The small commercial market hasn’t developed at the same pace as the other behind-the-meter market segments, she said. There’s a lot of need for something innovative to happen there.”

This challenge extends to the market for standalone solar for small-scale commercial customers, she noted. The wide variety of potential customer types and revenue generation opportunities in the commercial space has stymied the kind of standardization of design, customer acquisition and financing that major residential solar players like Sunrun, SunPower, Sunnova and Tesla have accomplished.

Adding batteries to commercial solar is largely limited today to markets that combine several factors, she said. Those include high demand charges to mitigate with stored power, on-bill savings from shifting solar from offsetting cheaper midday rates to more expensive evening rates, and generally some kind of state-level program, such as California’s Self-Generation Incentive Program or the Solar Massachusetts Renewable Target Program, to boost the economic proposition.

Anything that can reduce the cost and time to permit and install batteries alongside solar will help strengthen the case for both of them, said Molly Cox, solar analyst at Wood Mackenzie Power & Renewables.

It seems that all of this will be easier from a permitting standpoint than a centralized system,” she said of Yotta’s approach. The time it takes to secure permits is a big cost in and of itself, she noted. Installation complexity could be an issue, but the industry is familiar with installing microinverters and module-level power electronics, she said. And with rapid shutdown requirements, going after that with their microinverter is a smart move.”

Holden cautioned, however, that Yotta will still face the burden of convincing solar installers that its novel approach is safe and reliable. Clearly they’ve done testing, which is interesting,” she said. But I would imagine it would take some time for potential partners to pull the trigger on a big commitment.” 

Badkoobeh said each battery comes with its own independently functioning battery management system, and are able to communicate with one another and a central gateway. The company uses Pason’s Energy ToolBase software to analyze the value of different combinations of solar and battery storage and share that with its prospective developer and installer partners.

As for tapping the varying use cases for storing solar power, we’re actively looking into that and exploring the best path,” Badkoobeh said. Most commercial-industrial building battery-storage systems are being designed to optimize their behind-the-meter value by reducing energy bills and demand charges today, he said. But opportunities to earn money from grid services are expanding, whether from existing demand response – centered programs, or from emerging opportunities at the distribution grid and wholesale market levels.

Every system that we deploy, the technology will be able to at some point in the future shift and provide energy services,” Badkoobeh said. While he didn’t provide details on which partnerships might enable that, it’s notable that Yotta’s solar panel partner, Hanwha Q Cells, has acquired Geli, a battery optimization software startup, with an eye on tapping into North American commercial and industrial solar-storage markets.

(Article image courtesy of Yotta Energy) 

Jeff St. John is the editor-in-chief of Canary Media. He covers the technology, economic and regulatory issues influencing the global transition to low-carbon energy. He served as managing editor and senior grid edge editor of Greentech Media.