Time is money, but so are control and predictability. Our storage systems can give businesses the tools to address all three—delivering immediate savings, protection against escalating demand charges and optional, grid-independent backup power in case of outages.

—Peter Rive, SolarCity’s chief technology officer and chief operations officer

SolarCity points out that the utility grid is aging and outages are increasing. The US experienced 679 major weather-related power outages between 2003 – 2012, including 7 of the 10 costliest storms in American history. At the same time, while overall electricity usage in the US has increased only modestly since 2001—approximately 10% according to the US Energy Information Administration—utility revenues have increased more than 50% in the same time period.

Utilities have increased revenues faster than electricity usage in part by creating “demand charges” for businesses that have increased their share of the utilities’ cost burden. Some utilities are basing rates less on the overall amount of electricity consumed, and more on peak demand, i.e. the maximum amount of electricity used at a specific point in time. Solar power can significantly offset the overall amount of electricity used by organizations, but if an organization’s peak electricity demand is still high during the day—in the late afternoon, for example—the organization can be hit with high demand charges. SolarCity’s commercial storage system regulates the amount of electricity that organizations need from the grid during peak periods, reducing exposure to demand charges.

Unlike load shifting approaches to demand management, DemandLogic requires no change in operations for the business and is fully automated. SolarCity DemandLogic can also power IT functions, security systems, cash registers and other critical business systems during power outages. SolarCity analyzes each organization’s energy usage to design a storage system that can offset peak load and support high priority backup functions.

The economics and scale that Tesla has achieved in the automotive market now make stationary energy storage more cost effective and reliable than it has ever been in the past. We expect this market to grow very rapidly now that we have crossed this economic threshold.

—Tesla CTO and co-founder JB Straubel

SolarCity storage systems are available to new solar power customers through 10-year service agreements including monthly payments, with no upfront cost required. SolarCity says it will customize the system size to make it possible for businesses to save money immediately by saving more on energy costs than they spend for the storage service.

SolarCity storage systems will initially be available in areas of California serviced by Pacific Gas & Electric and Southern California Edison, areas of Massachusetts serviced by NSTAR, and areas of Connecticut served by Connecticut Light & Power.