You’ve probably seen it. It shows how the price of solar PV energy has come down in an almost vertical line over the past 25 years, while conventional sources of energy have generally been rising slightly.

Even as oil seems to have entered a “lower for longer” era of ostensible cheapness it, and indeed no other fossil fuel, can compare to solar prices as low as 3 US cents in sunny areas and even 8 cents in not-so-sunny regions like Germany.

What’s more, very similar trends hold for both wind and storage. The cost of wind has come down almost 60% in the US over the last five years, and battery prices have dropped by 20% two years in a row.

For the commercial and industrial (C&I) segment, the disruption faced by the traditional energy world is a threat, but, above all, an enormous opportunity. It’s a threat because in the short term, as established market participants tumble, policy makers struggle to update the rules to maximise the value of new technologies – resulting in undesirable “hiccups” as the system adjusts to the disruption brought about by almost marginal cost-free technologies.

Such hiccups result can be higher demand charges and/or unnecessarily high energy prices. In addition, grids may become less reliable due to the intermittency of an ever-increasing amount of renewables, and also because of less predictable demand brought about by developments ranging from the trend towards ever more consumer electronics to electric mobility.

Fortunately, these threats are more than outweighed by the promise of substantially and permanently reducing energy costs through what is essentially a one-time infrastructure investment. Up to now, the potential of renewables, especially PV, was limited to a relatively small reduction of energy cost by shaving a little off the daily peak.

This has changed. Rapidly falling battery costs mean that it is now economical to leverage intelligent storage-based plug-and-play solutions to cover a much higher share of energy needs by sourcing cheaper clean, but intermittent, solar PV and wind energy.

In fact, due to falling cost, implementing easily deployable storage can provide a number of benefits, even without adding renewable generation. C&I customers can profit from multiple use cases, sometimes referred to as “value stacking”, which utilities and other players often can’t do because regulations are sometimes slow to adapt around new technological possibilities.

One major use case is demand charge reduction. Younicos has been helping a German industrial giant identify possible advantages from a possible storage deployment. It was quickly determined that the company has to pay €75,000 ($84,200) a year for each megawatt of installed capacity, regardless of how often they use it.

A joint analysis also found that due to peaks in the industrial process, many megawatts of installed capacity get used very rarely. Modern batteries can provide such short-term excess power just as well as the grid, especially since these charges generally do not come unexpectedly. With a lifetime of at least ten years – thanks to an intelligent energy management system that treats cells properly – the avoided demand charge also could also cover the capital cost.

But the advantages don’t stop there. C&I customers can use all (in periods where they know they’ll have little to no need for the batteries to provide excess power) or some of the batteries’ capacity to provide valuable grid services, such as primary frequency regulation.

In most jurisdictions, primary frequency regulation is supplied in intervals of a week or less, with a trend towards durations of a few hours. This increasing flexibility will allow C&I users to further maximise the value of their storage asset by deploying as much of it as possible.

Interestingly, software tools originally designed for other purposes – such as microgrid energy management that optimises battery charging by taking into account factors as diverse as the weather forecast, likely load patterns and the best state of charge of the batteries – can be adopted for the C&I case. This allows customers to minimise energy costs, generate additional revenue, and ensure a smooth uninterrupted production process.

Speaking of production processes there is one more, increasingly important advantage of storage for C&I customers: enabling ‘industry 4.0’ internet-of-things, demand-driven production cycles. Again, without storage, such flexibility would be much more difficult to achieve and, in any case, would result in even higher demand charges for rarely used capacity.

As technology continues to evolve, prices steadily decline, and new business cases are being established, users may be unsure as to when the best time will be to invest in storage. We would argue that there is already a clear business case for C&I customers to consider.

Stephen Prince is chief executive of storage developer Younicos

This piece was published as part of the Thought Leaders series. Recharge’s Thought Leaders Club brings together leading thinkers and participants from the renewable-energy sector to examine the key challenges facing our industry

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