Why energy storage reduces electricity cost?

Energy storage do-couples electricity production and consumption in time. It is a process of "bottling" electricity or turning electricity into a "storable commodity." 

Lets look at couple cases: small scale and renewables. Large scale cases are more numerous and more difficult to comprehend unless you are expert in power generation, transmission or distribution business.

Small scale

One example is a remote (off-rgid) electricity user.  Diesel generator is a single source of electricity in this case.  Users may look different: household, farm, restaurant, hotel, telecom tower, military forward operating base and so on, but they have one common pattern of electricity consumption: periods of high electricity demand and periods of low demand.  They must install diesel generator with power high enough to satisfy high demand levels and in all cases oversized generators are installed.  During low demand diesel generator operates at low power level and consumes fuel extremely inefficiently, which leads to high fuel consumption and high electricity cost.  How electricity cost may be reduced?  Imagine that generator operates only at full power during short  (1  hour or so) periods of time and turned off during the rest of day.  When generator is on, it supports electric load first and charges energy storage whenever its possible.  Energy storage accumulates electricity from diesel generator, turns it off when completely charged and supports electric load while generator is off.  Now diesels generator operates only at high power level with high efficiency.  It generates same amount of electricity during the day, but does it more efficiently: fuel consumption is reduced, maintenance frequency is reduced, generator replacement frequency is reduced and, as a result, electricity cost is reduced.  This cost reduction became possible if energy generation and consumption was de-coupled in time by using energy storage.

Another example is a user connected to electric grid.  One obvious way of reducing electricity cost in this case is to take advantage from electricity price fluctuation during the day.  If energy storage is installed, you can buy electricity when price is low, store it and use when you need it.  Imagine that additional equipment was installed.  Electric company may force you to upgrade power line to avoid its overheating.  Not with energy storage installed  because power line "does not see" if you a turning equipment on: peak demands are covered by energy storage.  Savings from such deferral of power line upgrade may be substantial.


One of problems with renewables (solar and wind) is intermittency.  Wind tends to be stronger at night and solar panel generates electricity only when sun is up and output is going up and down during the day depending on weather.  Any user of solar panels and wind generators must install some kind of batteries to smooth intermittency.  Installation of any battery will increase system cost and cost of electricity.  Comparison of electricity cost ($/kW-h) before and after installation of energy storage allows selecting a product which makes more dollar sense in any given case.


It is important to realize that battery purchase price is not a single, but only one of many criteria affecting electricity cost: if battery life is short it has to be replaced frequently, if battery depth of discharge is low or battery is charging slow several batteries have to be used instead of one and so on.  

A parameter, which has to be used to estimate cost of electricity is "Cost of ownership."  It is estimated for expected operating time: typically 5 to 10 years and includes:

- initial cost to purchase and install energy storage,

- cost of maintenance during expected operating time

- battery cost * (number of battery replacements during expected operating time)

- battery recycling cost * (number of battery replacements during expected operating time)

- cost of recycling of decommissioned energy storage system 

- other costs (case dependent)

It is not recommended to make purchase decision based only on purchase price (or capital cost) and not on the cost of ownership.

Users suffered from financial losses because their decision to buy was based on incomplete information. Please estimate electricity cost, payback time and return on investment in energy storage system in order to make more informed decision.

Why energy storage is not used widely?

There are two reasons: lack of education on financial benefits of energy storage and lack of economically viable energy storage products.

How I can estimate monthly savings on my electricity bill?

First you should do quick estimation if energy storage may benefit you.  Look at you daily power consumption profile.  Do you have periods of high electricity demand and periods of low electricity demand?  

If you answered yes, you MAY benefit financially from installation of energy storage.

Next step is to do cost analysis and compare benefits from installation several competing products for your specific case.  Result of this analysis should give you answers to at least these estimations:

- change in cost of electricity ($/kW-h and %) after installation of energy storage

- estimated return on investment

- estimated payback period

One way of performing such analysis is to use software for economic analysis of hybrid energy systems.  Software "HOMER Energy" was developed by US Department of Energy and now being used worldwide.  Trial version (free for 2 weeks) may be downloaded from http://www.homerenergy.com

Another way is to look for professional help.  Our company provides such services at no cost and with no obligation to buy.

Is it safe to operate your product?

Yes.  There is no possibility of explosion or fire.  There are no toxic or corrosive materials inside.  No fumes are generated during operation.  If system is destroyed mechanically by external impact use water to clean.

Will your product require maintenance?

No.  Same as your TV.

Is it difficult to install and operate your product?

Complexity of installation and operation is compared to complexity of installation and operation of kitchen refrigerator.

What can be done if I like your product, but can't afford buying it?

We understand that some customers are capital limited and we do not want to loose them.  Our program for such customers is quite simple and it is a win-win situation:

1. Energy storage system is provided at no cost

2. System operation is monitored remotely vis wireless or GPS

3. Monthly savings after storage installation are estimated based on electricity consumption profile

4. Customer transferes 50% of monthly savings to company bank account

5. Customer may return our product at any time for any reason (or even without a reason) at no cost

6. Customer may purchase system at any time with a discount (longer you use it higher will be the discount)

What if I will not need to use your storage system for few days, weeks or months?

Just turn it OFF and turn ON when you need it again

Will something bad happens to batteries if storage system was not used for weeks, months or even years?

No.  Our battery does not degrade if it is kept in completely discharged state

What happens if you storage device goes down?

If for any internal or external reason drastic changes in system operations will happen, hardware will bypass energy storage, connect you power source directly to you load (what you had before storage installation) and turns device off. 

How expensive is recycling of decommissioned batteries?

Cost of recycling is several times lower in comparison with competitor's batteries because our battery is recycled by incineration without leaving solid residues.

How your product compares to competitors? 
To our knowledge competitor's products technically work, but their installation does not make dollar sense for the customer.  
Our competitors tell customer: "Our product has low price (or low capital cost)"
We tell customer: "Our product has low cost of ownership over 5 - 10 years period and your monthly electricity bill will be reduced by 20-40%)

Why you developed new battery technology instead of improving existing technologies?

Because requirements for batteries in energy storage are drastically different from requirements in portable, automotive or special applications.  All today's battery technologies have been developed either for automotive, portable or special applications.  It appears, that incremental improvement of existing battery technologies or "adjusting" them for stationary energy storage have numerous conceptual limitations.  In order to achieve major goal of energy storage to reduce electricity cost, the following requirements have to be met SIMULTANEOUSLY:

- low capital cost of batteries

- simple charge-discharge process, which does not require expensive electronics

​- long cycle lifetime

- long calendar lifetime

- fast charging

- deep discharging

- high efficiency

- wide operating temperature range

Incremental improvement of existing battery technologies may meet SOME but not ALL listed requirements, because of conceptual limitations and such products will never be capable to reduce electricity cost or make dollar sense for the customer.  Confirmation of this opinion may be found in long list of failure of energy storage companies and from opinion of industry experts and end users.

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Our principle of operation: "Happy customer comes first and money will follow"

Not vise versa.