Commercial & Industrial - How Residential Installers Can Move Into the Commercial Market

How Residential Installers Can Move Into the Commercial Market

The distributed battery installation market in the United States is on the brink of significant expansion, with projections indicating a potential growth rate of 50% annually. This surge is fueled by the escalating demand for renewable energy and the corresponding need for efficient energy storage systems. Government incentives and favorable policies are playing a crucial role in this growth, making battery storage systems more economically attractive for commercial applications. Technological advancements in lithium-ion batteries contribute to more efficient, longer-lasting, and cost-effective storage solutions.

The increasing focus on grid stability and the desire for energy independence drive commercial entities towards distributed battery storage. This trend is especially pronounced in areas with frequent power outages or limited grid infrastructure. Rising energy costs are also a significant factor, as businesses seek to control their expenses by storing energy when it's cheaper and using it during peak pricing periods. While ROI for energy storage investments is very specific to location and particular conditions, it’s estimated that 43% of C&I customers could reduce energy costs by implementing battery storage.

A growing emphasis on Environmental and Social Governance (ESG) goals is also leading companies to adopt battery storage systems to reduce their carbon footprint. This expansion offers promising opportunities for residential installers looking to enter the commercial and industrial sectors. The expertise gained in residential settings is highly transferable to C&I projects, although it's important for these installers to familiarize themselves with the different scales and complexities of commercial installations. Staying informed about technological and regulatory developments will be crucial to successfully navigating this evolving market state by state. As such, residential installers who adapt and prepare for these changes can expect to flourish by adding commercial battery storage services to their offerings. 

Advanced ESS technologies are crucial for effective demand charge management and time-of-use arbitrage in a BTM setting. These systems play a pivotal role in managing peak energy demand, enhancing the utility of solar installations, and ensuring grid stability. 

Applications and advantages

Understanding C&I client needs

C&I clients typically have more complex energy requirements than residential clients. These often include the need for effective demand charge management and time-of-use cost-shifting. Demand charge management involves using energy storage to reduce peak demand and, consequently, the associated demand charges. On the other hand, time-of-use cost-shifting leverages the storage system to capitalize on differences in energy prices throughout the day. Installers venturing into the C&I sector need to be well-acquainted with these concepts. Familiarity with how battery storage can be tailored to address these specific needs is crucial for delivering value-added solutions to C&I clients.

Energy cost management

One of the primary advantages of C&I battery storage systems is their ability to manage energy costs effectively. These systems enable businesses to store energy when prices are low (usually during off-peak hours) and release it when prices are high (peak hours). This strategic shifting helps reduce energy expenses and plays a significant role in load balancing. By aligning energy usage with periods of lower costs, businesses can potentially reduce their overall energy bills.

Enhancing solar use

Battery storage systems also significantly enhance the use of solar installations in the C&I sector. They allow sites to store solar energy generated during peak sun hours, which can then be used during the evening or on cloudy days. This capability is particularly beneficial as it maximizes the use of generated solar energy, ensuring that the excess energy produced is not wasted but rather utilized effectively. It also contributes to a more consistent energy supply, mitigating the intermittency typically associated with solar power. Financial studies have shown that the addition of solar to battery storage in the C&I space can improve ROI, reducing the payback time of these investments.

Backup and resilience 

On-site battery storage is critical in providing backup power and resilience, particularly for facilities that require an uninterrupted power supply, such as data centers, hospitals, and universities. Consistent power is vital for data centers to maintain data integrity and operational continuity. In hospitals, battery storage systems can be lifesaving, powering essential medical equipment during emergencies. Universities also benefit, as these systems can maintain research integrity and provide a stable learning environment. This aspect of battery storage enhances operational reliability and significantly contributes to organizational resilience against power instability.

Transitioning from residential to commercial installations

Technological integration

The transition from residential to commercial battery storage installations is marked by the need for greater technological integration and settings tailored to business operations. This integration is crucial to maximizing potential and scalability for businesses. Developers are exploring new states with lower development costs and rising electricity rates, meaning that there is a need to support this growth in areas with growing energy storage demands. 

Addressing common installer challenges 

While a promising venture, installers transitioning to commercial installations may need to get creative in the face of some challenges. One of those challenges is the availability of rebates and incentives that increase the ROI for C&I investment in energy storage. Because rebates and incentives are geographically dependent, ROI will vary from place to place, making the sales pitch different depending on the location.

Training and expertise

Leveraging NABCEP, HeatSpring, and Briggs & Stratton training for continuous learning can help support the additional knowledge needed to break into the C&I market for battery storage installations.

Setting customer expectations

Proper communication with clients about what to expect from their battery storage system is crucial. This includes being transparent about the systems’ power output and backup duration. As a game changer for the grid, energy storage has grown 68% from 2021 to 2022. However, it's important to note that storage accompanies solar only 10% of the time, indicating the potential for significant expansion in this area. By setting realistic customer expectations and understanding the broader impact of energy storage on the grid and environment, installers can ensure customer satisfaction and contribute to the energy transition​​.

Overall, transitioning from residential to commercial installations requires adaptability, continuous learning, and an understanding of the changing dynamics and challenges in the market.

Becoming a C&I service provider expert

Expertise in deployment

In the C&I sector, manufacturers like Briggs & Stratton increasingly focus on providing tailored battery storage solutions using well-tested technology. This approach is crucial to ensuring businesses can effectively manage their energy consumption and make informed long-term plans. The evolution of the C&I solar market has highlighted the importance of addressing specific challenges, such as system downtime and the need for efficient operations and maintenance. Becoming an expert in your field during this transition will help with customer education and setting up the best storage plan for your new C&I customers.

Policy and regulatory landscape

Incentives and compensation

Understanding the policy environment, such as the Federal Energy Regulatory Commission Order 2222, is crucial for C&I service providers. This order enables Distributed Energy Resources (DERs) to participate in regional wholesale markets, opening up new energy trading and compensation avenues.

Additionally, the passage of the US Inflation Reduction Act of 2022, allocating $369 billion for climate and energy measures, marks a significant shift in the policy landscape, energizing the solar and energy storage buildout​​.

Title 24 in California 

The California Energy Commission (CEC) updates to the Title 24 California solar mandate, are important to know if considering a shift to C&I. These changes introduce new requirements for solar photovoltaic (PV) systems, battery storage, and electric vehicle (EV) charging stations. The aim is to promote the installation of clean energy sources in new buildings.

3 Key Title 24 Requirements

• Solar PV and Battery Storage - The updated code expands the requirements for installing solar PV and battery storage across various building types.

• Battery-Ready Buildings - New multifamily low-rise buildings must now be 'battery ready,' meaning they should have the necessary electrical infrastructure for future battery systems.

• EV Charging - CALGreen, California’s Green Building Standards Code, has been revised to include new requirements for EV charging spaces based on building type and the number of parking spaces.

The rapidly evolving landscape of the C&I battery storage market presents a wealth of opportunities for residential installers aiming to transition into the C&I sector. The growth in this market is driven by a combination of technological advancements, government incentives, and a growing emphasis on sustainable energy practices. 

Residential installers can leverage their existing skills and experience, adapting them to meet the more complex needs of C&I clients. However, success in this transition will depend on their ability to navigate and adapt to the unique challenges and dynamics of the market, such as understanding specific energy requirements, managing technological integration, and staying abreast of policy and regulatory changes. As the market continues to grow and evolve, residential installers who invest in continuous learning and adapt to these changes will be well-positioned to succeed as expert service providers in the commercial and industrial battery storage sector.