With only 265,000 customers, Vermont’s Green Mountain Power (GMP) is among the nation’s smaller investor-owned utilities, though you’d never guess this from its influence as a renewable-energy innovator. Unlike many larger utilities, GMP is encouraging development of small-scale, distributed solar-power installations, and such efforts in the city of Rutland have helped the community earn the honorary title of “Solar Capital of New England.” Now, GMP is showing the same leadership in the area of distributed energy storage through an ambitious partnership with Tesla’s energy division to bring batteries to 2,000 of its residential customers.


With 2 megawatts of larger-scale batteries currently installed, GMP is ranked 10th on the Smart Electric Power Alliance’s 2016 list of utilities with the most grid-connected energy storage. GMP also garnered headlines a few years ago for a much smaller program to test behind-the-meter residential batteries using Tesla’s first-generation Powerwall units. By combining the knowledge gained from that 20-customer project with significant performance improvements—and cost reductions—in the latest Powerwall products, GMP sees an opportunity for improving reliability and lowering expenses across its service territory one installation at a time.


“We leverage that battery—and, in aggregate, all the batteries—to reduce our costs during peak energy times and essentially create a demand-response tool,” said Josh Castonguay, GMP’s vice president and chief innovation executive. “That helps reduce costs to the host customer and helps us save costs across all our customers.”


Vermont is unusual in New England because the state’s utilities are regulated, meaning GMP can own its generation resources. However, the company still purchases much of its power through regional markets, and that can become expensive during peak periods. As Castonguay said, having the output of 2,000 storage units available to supply its customers during high-demand periods could mean substantial savings.


There are also significant advantages for customers. The 10-year agreements feature a subsidized cost of just $15 per month (or a single $1,500 payment), which includes installation. Homeowners then gain seamless (and emission-free) backup power to stay up and running during grid outages.


“With most homes, you can easily run six to eight hours, and it’s all automatic,” Castonguay said. 


The runtime would be significantly extended if the homeowner has a rooftop solar power system to help keep batteries charged. However, with outages on the GMP distribution system averaging about two hours, even nonsolar customers should be able to ride through most disturbances.


With no additional publicity beyond an initial announcement in early May, along with subsequent media coverage, the program already has attracted an estimated 1,000 interested customers, Castonguay said. At a national level, it has captured the attention of many in the energy-storage industry.


“This project offers an opportunity for demonstrable value for both homeowners and utilities,” said Matt Roberts, executive director, the Energy Storage Association (ESA). “I think that energy storage is able to provide value at all different scales. This is going to be a partnership that will really help tell that story.”


A recent ESA/GTM Research report found residential, behind-the-meter systems currently total about 7 percent of overall installed storage capacity, Roberts said. Growth in this sector should keep pace with the larger commercial and utility markets. The GMP approach, with a utility owning equipment on a customer’s premises, could gain favor in other service territories as the battery technology improves and costs fall.


Roberts noted the opportunities such arrangements could offer for creating a two-way communication channel between the utility, the customer and the customer’s connected equipment.


“Different models are being explored, but as usual, GMP is first ahead of the curve,” he said.


The Powerwall installations are scheduled to begin late summer 2017 and continue through the first quarter of 2018, Castonguay said. Tesla will use its own personnel to complete the installations. GMP will closely track the batteries’ performance, individually and in aggregate, over the program’s 10-year course. Specifically, the utility will examine the following:


  • Customer satisfaction with the batteries, from installation through use as a backup resource

  • How well the batteries addressed peaks and how well GMP was able to forecast when those peaks will occur

  • What ancillary benefits the batteries provide in terms of voltage, power quality and reactive-power support


For all of their promise, the batteries remain a means to a larger end, Castonguay said. As generation becomes increasingly distributed, new methods are required to balance supply and demand without disrupting the system reliability on which customers have come to depend.


“We’re trying to transform the entire grid,” Castonguay said. “We have to transform the production and consumption of energy, and to do that you’ve got to have a new tool set.”