Understanding Battery Economics
Commercial battery storage provides value through demand charge reduction (30-50% savings), time-of-use arbitrage, backup power, and grid services revenue. Combined savings typically deliver 15-20% IRR.
Demand Charge Management
California commercial rates include demand charges of $15-25/kW. Battery storage reduces peak demand by 30-50%, saving $50,000-200,000 annually for typical commercial facilities.
SGIP Incentive Optimization
SGIP provides $200-850/kWh depending on location and customer type. Equity customers and those in fire zones receive higher incentives covering up to 85% of project costs.
Sizing and Technology Selection
Optimal battery sizing balances demand reduction, backup requirements, and cost. Lithium-ion technology dominates with 10-year warranties and 4,000-6,000 cycle life.
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Written by
Promise Energy Team