Swell’s solution a that“two-way transactive retail offer” that separates the contractual and financing terms for the part of the solar-battery system tied to the net-metering value of customers from the part of the battery dedicated to serving the needs of VPP.
For example, in exchange for a rooftop-solar and battery system that allows a homeowner to save money and sell electricity to the grid, a Swell customer can make a monthly lease or payment. in debt, he said. But in a separate financial agreement, Swell may agree to pay the customer monthly for VPP value provided by that battery, he said – a value that can add thousands of dollars to the lifetime of VPP contract.
That’s how Swell organizes financing for the batteries it installs for self-signed customers. Starting next year, it will begin offering similar lease and loan structures to third-party solar and battery installers it works with in California, Hawaii and other states where it makes sense, Khan said.
“We are basically productizing the VPP — We created a retail product offer for that,” he said. In other words, the company created a standardized set of terms for the growing network of solar and battery installers to create the VPP offering customers Swell’s name.
This type of standardized method clearly describes the financial value of participating in a VPP something new today, he said. Most VPPs to date have been launched by large solar and battery installers who have created their own specific systems for rewarding customers, from one-time, upfront cash payments or gift cards to incentivize people. to sign up, to delayed payments based on the amount of each. the customer’s home contributes.
Swell’s focus on VPPs built on bilateral contracts with utilities, with well-defined revenues for years to come, allows it to maintain a more accurate monthly fixed payment structure for its customers, said Khan. While the company is open to participating in wholesale energy markets in the future, these markets are more volatile and offer less certainty of long-term payments, he said.
Being able to finance projects against utility contracts, at least for now, that“brings more value to the utility, which means more value to the customer,” he said. That is also important for the implementation of the company’s future repacking plans in the long term VPP contract for securitization, he noted – the financial structure that drove the capital cost of residential solar loans in the last decade.
Building grid-to-customer tech to make it all happen
To get the whole values a VPP can give use, a VPP The operator must do more than just dial down the home’s energy use and inject all of its battery power into the grid for a few hours a year, Khan said. That’s what most VPPs do today, whether it’s by enrolling in traditional utility demand response programs or bidding in wholesale capacity auctions in the energy market.
Swell has a more sophisticated approach. Many of its contracts call for reducing demand on the grid or injecting battery power at certain times of the year, as well as better reducing the load on specific parts of a utility’s grid. , he said. In this case 80– megawatts VPP contract with the utility Hawaiian Electric, Swell’s batteries are still required to remain in a certain state of discharge to absorb wind and solar power that may exceed the needs of the island’s grids, he said.
That’s where Swell’s gridco comes into play, Khan said. Central to that role is Swell’s software, called GridAmp, which was first launched to support the Hawaiian Electric contract. It comes from a piece of software created at startup AMSone of the big player companies in Southern California Edison’s 2014 distributed-energy procurement, which Swell bought from energy storage company Fluence after being bought by Fluence AMSThe software properties of 2020.
To ensure that all houses equipped with solar and battery in a VPP actively doing what their contract requires them to do, a VPP has two main tasks, said Khan.
First, it needs to connect and communicate with all the different devices it controls in homes, including batteries from many different manufacturers. Currently, Swell says its system works with batteries from LG Chem, sonnen, Tesla, Enphase and Generac, and others will be announced soon. that“We want to talk to everyone’s batteries,” he said. that“That becomes even more important when we talk about batteries on wheels,” ie, electric cars, he said.
The second thing a VPP must do is interoperate with a utility’s grid control platform, that“which is not a small task,” he said. but that“we’ve been through it with flying colors” with utilities including Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric in California and with Con Edison in New York, he said.
“We will receive their requests on how to send the VPP and process it, and do that work on the back side, and go back to them with M&V,” or the measurement and verification that proves each battery does what it says it does, he said.
In Khan’s view, this type of tight integration between utilities and devices earns Swell’s GridAmp software the title of a distributed energy resource management system, or PEOPLE. Many companies use terms like VPP and PEOPLE to describe what they do, but there are significant differences between them in terms of capabilities and interoperability.
Expanding the definition of a VPP to meet the needs of the future grid
Giving utilities a way to monitor, manage or even control customers’ solar-battery systems, EV Chargers, air conditioners, heating systems, electric appliances and other electrical appliances will become an increasingly important part of the drive to decarbonize the grid. Only a few US utilities, such as Hawaiian Electric and Vermont’s Green Mountain Power, have gone beyond pilot project-scale efforts to use it. that“behind the meter” properties in a comprehensive way – but many more plan to do so in the future.
In addition to working with utilities, Swell has been involved in several large-scale projects that may push the boundaries of VPP concept, said Khan. An example is its work with Nimiipuu Energy, the that“tribe-to-tribe energy cooperative” launched by the Nez Perce Tribe in Idaho, which hopes to connect a distributed solar-and-battery system to tribal lands throughout the Pacific Northwest.
The details of the project are still being worked on, he said. But in the coming months, he said to watch out for more news a that“capital-An aggregation of behind-the-meter assets of a group of different tribes, to create what we believe to be the largest. VPP in the country over time.”
