Energy Storage Part 2: Do We Need Energy Storage?

The Need for Energy Storage

Do we need storage? The simple answer is yes! But we must break down the different uses to determine how important energy storage really is. Here is a list of the most common uses:

  • Utility Level- Mass storage to augment electrical supply at peak demand
  • Commercial- Storage in conjunction with solar to peak shave high demand times or to supply electricity during a power outage
  • Residential- Used in conjunction with solar to provide backup power during a utility outage or to have batteries provide power during high rate times and recharge during low rate periods like night time
  • Universal Residential- Mandated storage at residential level which smooths and balances electrical requirements saving the utilities from having to build new power plants


Much research and development is going into utility level energy storage using various types of batteries, hydroelectric from rivers and dams, thermal storage, compressed air, flywheels and super capacitors. The most research appears to be going into different types of batteries. This includes large banks of small batteries like lithium-ion to very large single cell batteries using various types of dialectrics such as salt water. These devices can store into the Megawatt range making them very useful for smoothing peak cycle requirements of utility power.

Utilities are implementing large scale energy storage in many locations. By utilizing stored energy at peak demand, they can eliminate the need to build addition generating plants. New power plants are very expensive and must go through a mountain of red tape to meet environmental regulations.


One of the most economical uses of battery storage is for peak shaving at commercial facilities. Unlike residential billing, commercial users are billed based on their peak demands during the prior year. This peak demand sets the Kilowatt per hour rate for the future. Lowering the peak demand lowers the rate and therefore the entire bill for the following year.

No alt text provided for this image

Energy storage systems will automatically supply power during high usage times like mid-afternoon when air conditioners are working hard and production is in full swing. Batteries are then recharged by lower cost electricity at night or by solar arrays. By utilizing the stored energy at these peak times reduces the peak demand and the rate for the entire year. This system can also provide backup power during a utility failure. Return on investment (ROI) for these systems is usually very good.


Less economical but certainly good for the environment is a residential battery storage system used in conjunction with a solar system. These systems can be cost effective in areas where the rate is high for kilowatt hours. These can be justified in several ways:

Photo-Voltaic (PV) Self Consumption:

This system is designed to provide all or most of the power for the residence. Excess solar energy produced is stored in batteries. This stored energy is used during the night and times of low solar production. This keeps the costs from purchased energy to a minimum.

Time of Use (TOU):

When the utility bills by TOU, your rate changes during the day with the most expensive power available during peak afternoon and early evening.  By using the the battery system in conjunction with the solar panels to power the house during these high cost times, overall utility costs can be kept to a minimum.

Universal Residential:

This system requires all residential users to have battery based energy storage tied to their home utility. The systems are either supplied by the government or the utility companies. These smart storage devices are all connected and can work independently or controlled as a group by the power company to supply power back into the grid during times of peak demand. This could eliminate the need for additional power plants and quickly justifies the initial cost.


This market is growing rapidly with many new technologies becoming available. If you are interested in more information check out these websites:

“Residential Energy Storage Economics” By:Matthias B. Krause, David Brearley July/Aug 2016 printed on SolarPro website

“When Does Energy Storage Make Sense?”  February 25, 2018 by Lars Lisell printed on NREL website.