Valuing Technology Complementarities: Rooftop Solar and Energy Storage
okay great uh hello everyone my name is Naim darguth I'm a research scientist at Lawrence Berkeley National Lab and today we'll be presenting some work that we have been um working for a couple years now with a number of academic Partners uh led by Ken Dillingham who is our our speaker today Ken Gillingham is a professor of Economics at Yale University and the school of environment the co-authors on this study are Brian Bollinger who's a professor at NYU and Andres Gonzalez from puc at Chile um so a couple of kind of logistics we will have um a q a session at the end of the presentation but do feel free to enter questions as we go there should be a q a button that you can directly answer for clarification questions we can kind of the other co-authors are on the line we can try and answer them as we go and for the larger discussion questions we'll leave and to the end but no need to wait till the end to enter your questions um this webinar is being recorded and it will be posted on the electricity markets and policy website after the confusion of the webinar actually probably in about a week um and I should also note that there is no uh published paper for this work as of yet but if you are interested we will be able to send you a draft version of the paper which is to be submitted shortly to an academic Journal so with that um then I will leave it to you thanks [Music] 23 slides so I don't have a huge slide deck um the goal here is to go for about half the time roughly uh giving you the the talk and then um spent have plenty of time for for Q a at the end the current plan so hopefully I'm uh set I should also say along with the Q a we do have Brian Bollinger and Andres on the line here as well so if you type things into q a I might not get to them until the end but uh they may be able to respond to you as we move along with with questions you might have um so this is a paper on understanding the co-adoption of rooftop solar and energy storage and it's funded by U.S department of energy uh seeds three grams so under the Solar Energy Technologies Office of the U.S department of energy so standard legal disclaimer these are just our views of course um I mean thank you we thank you um but the motivation behind about battery storage and solar you start to see some really interesting analogies to other products and many products have complementarities uh you could think about a classic case of an accessory so you have a video game console I remember Nintendo from a long time ago um and then a game that is is very very exciting to people they might buy video game console just for the game just for that accessory so that the ability to access some accessory uh can really influence the demand for initial products and enhance the value proposition and that analogy is is a an interesting one when you kind of apply it to the the battery uh and TV context so this is a study that's about examining these complement parodies in the demand for rooftop solar and battery energy storage um note that calling battery energy storage and accessory pretty much is saying that you don't generally use battery energy storage you can do battery energy storage on its own now of course you can some people some people have battery energy storage it's actually a really tiny fraction in the market and in general when people just want pure backup they tend to get the much more cost effective generators rather than just bats but there are a few cases of some people who say have a shaded rooftop and and don't get batteries you know they can't get rooftop solar but do get a battery energy storage um but we're not going to focus on those because they're really a very unusual cases in our data um pretty much what we see is that you do get battery energy storage you're getting it as a co-adoption with rooftop solar um and the degree towards the value of adopting solar is enhanced has a whole set of implications uh for policymakers and other stakeholders relating to pricing how they're how how the response to subsidies work so this paper is going to dive into understanding does battery storage entry so this battery storage is not really an option until a few years ago home battery storage spur the demand for solar PVP [Music] be focusing on the residential and small scale context and battery storage is obviously very interesting at the utility scale context but that's not this study um we're going to be focusing almost entirely pretty much entirely on small scale and almost entirely on residential content um and then the second question is to what degree does this is the value proposition for solar adoption increased to Institute so one of the reasons why you might get battery storage when you have when you're getting solar anyway is because of the possibility of outages uh and backups from those outages able to use your solar uh to back yourself up it may also be some some grid Independence types of motivations um and so thinking through what those motivations are helps you understand what might be going on in in this context where you're talking about co-adoption of solar storage image what are the challenges that we have is an estimation challenge there could be high degrees of complementarities between solar and um so there's an Arbitrage opportunity with time of use pricing I mentioned before if you have outages this could you could see batteries as a defensive investment equals feeling and control these are real complementarities where batteries coming in can actually increase the value of solar PB so basically you get more value out of having solar PB because you can use it in the evening uh after the sun goes down when you have a battery so it's like this this added value you you actually can get of course the more environmentally aware consumers might also value both products uh so it could be what's called correlated consumer preference shocks and their battery entry wouldn't be increasing the value except that these people are more environmentally aware more have strong environmental preferences anyway so our whole kind of uh effort here is to try and disentangle those those two components we're going to do is we're going to leverage Nationwide household level data on solar installations there's variation on battery entry on incentives and power outages um and we're going to first provide some evidence on uh the determinants of PV battery Pro adoption focusing on outages uh just providing some evidence showing that that outages do influence PV and Battery Pro adoption uh then we're going to estimate what's called a dynamic discrete Choice demand model of residential solar and Battery investment so this is a model where we are allowing consumers to be forward-looking so they are accounting for the fact that solar prices could be coming down in the future battery prices could be coming down a few and then we're going to run what are called counter factual scenarios so what is the world what if scenarios what would the world look like had say batteries not been available at all had say outages gotten much worse um or or major defensive Investments were made by utilities to improve outages so you can think about climate change uh leading to worse outages and and um through wildfires Etc more Public Service psps's uh for those of you in California power shutoffs public service power shutoffs so so outage intensity is something we're going to vary and explore that and then we're also going to explore price subsidies the context here is rooftop solar panels and residential batteries that really became an option after uh 2016. um you know barely anything before then so it's very new technology which is very interesting for us uh you know the post rebate price for solar panels on average in our data is about twenty thousand dollars the capacity of around seven kilowatts the main manufacturers residential batteries in the in these data are Tesla and algae so we're talking about the power wall and a standard LG chem uh home battery is what we're talking about generally the system capacity is under 20 kilowatt hours the average is is 19 although they're definitely systems that we just Etc 30 or 40.
um you know one of the things is for around around 20 kilowatt hours typical house you can power a house for quite a lot of time and note that if you have a solar panel and have it linked up from the battery once the Sun starts shining the next day you could be in a position again where you can um where you can power your house straight from the solar panels um you know you probably can't charge an electric vehicle you probably can't drive clothes maybe but you can you know keep your battery keep your refrigerator going and do all standard normal things um it is true that you're paying more for it 32 percent you know more expensive when you co-install a system um and I can actually take a quick look here just to show how that's this post rebate price goes so we start adding the batteries the batteries have been getting bigger over time that's part of the reason why two has been increasing but generally PV is getting cheaper um and batteries have been getting slightly larger and cheaper per uh kilowatt hour um not so much in the past couple years power outages so we bring in 3.4 million outage events between 2017 and 2021. this is a fairly representative sample it comes from power outage.us that
reports out of data from utilities all across the United States we don't claim that it's comprehensive it doesn't put every single power outage but includes a lot tracking of 100 million utility customers it tells us things like the number of customers about power for City time when these happen Etc and we couple this with the Lawrence Berkeley National Labs tracking the sun work on Nationwide solar and storage residential installations so we have now uh at the individual level individual installation level system price the rebates location installer the manufacturer Etc quickly to show the total number of megawatts of solar installed as you probably know has kind of steadily been increasing over time in the decade between 2011 to 2021 it's only to increase since then but this is what you see with PV battery a small amount have been co-adopting since since 2017. um and so you can kind of see the total solar adoption is broken can be broken down into those who just installed solar and those who install solar Plus Battery and that's what the this area is PB Plus batteries making up this wedge and they see this uh distance between those two is the same as this is um you can look it across states too so as I said until 2016 this wasn't even a market I mean this is all pretty new um by 2021 about 10 of total solar capacity was generated uh by co-installed systems those installed in 20 20. um so it's it's starting to become a reasonable part of the mark actually it's the best of my knowledge we don't have the data for it but we we know that this is these are the trends notably California dominates California's uh over 80 percent of the number of solar Watts that are co-installed um but then it's a smattering of other states that have a co-adoption occurring on the power outages there's a wide range of outage exposure um it's interesting to see uh the the places where the outages are the most prevalent so Minnesota actually kind of wins here with the most outages and California is not the worst despite what you might think if you say what I thought I should say um this is the county level average number of hours of power shutdown per housing unit per quarter quarter uh about the outages across locations interestingly 76 of the outages happen during the day and the mode of the average starting time is 1pm we're going to quickly flip to this because this is pretty interesting a lot you know I always thought outages are generally occurred at night a lot of outages actually occur in the late afternoon um and and early evening um so that's a lot of that time it's still time when the sun is shining uh so batteries would kick in at this time um and obviously they kick in here but uh during some of these outages the the the solar can actually when you when you can actually kick in right right away um horses if it's a huge storm uh there might not be a lot of generation happening but it can help for keeping your refrigerator going for example it's pretty that was pretty interesting um there's a little bit of Greek in the slide but let me give you in English what we're doing here uh we're looking at the relationship between outages over time on the adoption of PV only and PV Plus Battery so solar only or co-adoption and we're looking at this across the entire country and we have a whole bunch of controls for a variety of other things that could be compounding this estimation so we're basically looking at the log of adoption here and we're looking at it over time and at what time what I mean is time since the outage occurs and what do we see fascinating uh results to me is you know so the the actual outages occurring around here we see this uh real boost of PV and Battery um in the following quarters so it takes some time to uh to search for a installer or assignment have them um check out your rooftop and all those things sign the contract get installed so it makes sense that it would be several quarters later but there's there's a a real jump uh within a few of an outage and um oh installation that occurs whereas for Pb alone we see it kind of kind of when you look that's also some some already interesting evidence that power outages are playing a role here in order to dive deeper here uh we're gonna um develop a dynamic demand model so we're going to be modeling the households installation decisions so you're a household you're thinking about cool what am I going to do I'm going to choose an installer first and then I'm going to choose PB only and PB Plus Battery notably in our sample some installers don't offer PB Plus Battery and that that's Incorporated so if you you can choose installer and you know you wouldn't choose an installer obviously if they don't offer people this battery if you want 50 plus battery um so we have uh this in technical terms this is a nested loaded framework that um but we allow people to to have the to account for the option value avoiding based on expectations about future market conditions so they're they're looking forward and saying well okay prices of solar installations have been declining so I know that there's some value to me waiting a little longer and I'm weighing that against the fact that I kind of want solar right now so that comes in um this is uh technically how we do it we're going to use additional Choice probabilities uh and we're going to be using some instrumental variables to try and account for uh standard demand and imaginative concerns so these are going to be things that Shift Supply around um if that's too detailed I will get further into the mall I have some nice detailed slides with more math for you for those who are excited about them you can read the paper um but it's a it's a I'd say kind of pretty close to The Cutting Edge of how people are are doing uh demand modeling these days when we talk about the demand estimates uh equipment I'm going to mention this but I'm going to start here with the post rebate price per watt for when we we estimate the model without the instruments that's what this column is we basically get nothing when we estimate it with instruments we get relatively sensible values for the price per watt so we see it's it's negative and this gives us an elasticity that is is in lot well in line with the Word chart change the price what that means for how many people purchase uh solar or or solar storage um the other thing that to mention here is we also look at the outages so this is the cumulative number of hours that an outage occurs um so we have a cumulative number of hours occurs and also interact this with with whether you co-install and so what we see here is is if you've co-installed and you have more outer more hours of an app outage your uh probability of adopting is increased that's what this positive coefficient means here I can get into the what is kind of in terms of percentage increases but it's it's a notable percentage increase um so outages really are are playing a role in this um this effect is a little different in California which is the next slide actually so we can look at um this uh this is for for everywhere um but in California it's a gap but it's still a positive effect on those but it's a dampened effect in California and you can also note that um if you do co-install which is this row here you see that there is a positive coefficient in California which we're just kind of fascinated by it suggests that in California if there's a set of outages a bunch of people right after getting those outages uh will will be installing solar even though the solar in general doesn't actually provide a defensive investment doesn't actually back you up there's certain inverters and we actually looked into this like what percentage of the sample are getting an inverter that allows you without storage to back up they're entirely Niche they're they're almost nothing so it seems that outages just make people think about having silver more seen two in the other states which uh which is a really quite interesting finding and we'll you'll see that some more so it gets to be even more exciting at least from my perspective is getting into the counter factual exercises we're going to use demand estimates to study these research questions we're going to ask how much did the introduction of PV and Battery this option becoming available contribute to the total adoption of solar so basically what would the world been look what would the world look like had PV and battery not even been available starting in 2016 which is what was happening beforehand how much of this demand would simply disappear the next question is how would solar adoption change if the level of power outages increases or decreases so with climate change we could expect potentially more power outages but we could also see real efforts being undertaken by utilities to underground power lines or uh or otherwise increase the reliability and and reduce power outages tree trimming Etc so um here we have pbn battery here's this defensive action a power uh shutdowns means that a higher exposure to outages may lead to a higher generation of solar energy which is kind of a interesting result we don't nobody wants power averages but it may have this uh this additional consequence of after a time of power outages you might get a jump in solar energy uh um uh installations and finally how much would adoption increase if we offer price discounts so it's simulated adoption under different schemes of price incentives so first one this pattern battery storage entry contribute to the adoption of solar so here we're simulating solar adoption a setting where pbn battery is removed so if PV and Battery was removed this left hand side says how would adoption of solar change what we look at is how many people would have adopted PV anyway and how many would switch to What's called the outside option basically not adopt anything and there's actually a pretty reasonable fraction of people who adopted co-adopted PV Plus Battery so if the batteries were not available it would have done nothing would have would not have adopted anything at all and that's what's shown in this red area here and this is just a cumulative version of what we see here in the left hand pants the right hand side is just a cumulative version of the left-hand side these uh values negots these are not huge huge values so I recognize is not an enormous number of megawatts that that's affecting but it actually gets that important behavioral considerations about what's really going on and driving the the adoption decision so put it to summarize it eighty percent of the PBM battery demand switches to PV only and the remaining 20 goes to the outside option um and so we're talking kind of in the 50 the tens of Mega next is the role of power outages the value of a PV Plus Battery increases with power outages that's not surprising you would think that would be the case so if you're at a place that has a lot of power outages I happen to be in one I'm sitting here in a very wooded area of Connecticut and we get several outages every year um the value of PV and Battery increases with power outages of course it may actually go the other other way if everyone already has a generator um so several people on my street have generators and and they're like well I don't really need a battery I already in my generator um but you can see what we're doing here now is we're going to simulate storage and solar adoption by varying the kind of average level of outage intensity and this is what we see so on the x-axis we've changed the average intensity and on the y-axis we see the change the percentage change in storage capacity so if you have more outages total storage is increasing so this is 20 more outages a change in storage capacity goes up looks like around 75 percent um and and if you have fewer outages it drops by 50 percent but we can also look at the change in solar adoption and obviously the percent change is going to be a lot smaller because the base that's much larger um but it also influences solar adoption as well uh because outages are entering into in technical terms the utilities function or or the the choice that these decisions or make it we allow outages to play a role in this aren't making let's dive into California I gave some evidence already about something different going on in California so this is interesting what I think is a very interesting comparison of California versus other states and to be clear it really is California versus other states we actually separated out other states played around is there another state like California for those who live in California you may be proud to know that there's no other state quite like California um but uh but you know there's the higher penetration of PB and battery in California there's a whole different things set of things going on that were a recent major outage events in California such as Civic gas and electrics uh public service power shutoffs um so what we see is that the change in outage intensity and you look at the the fraction of solar postal so first of all the level is much higher between California and all the other states the co-adoption is much higher to start but uh but the slope is actually similar maybe a little steeper uh so it's primarily a level shift up and maybe a little bit of the sloping slightly steep but that's not going to be just listening so so you see a much higher all installation fraction in California um but it gets to a more interesting story here when we actually look about uh what people would have done if batteries were not available um and how that changes with power outages so here on the left hand side we have all the other states and on the right hand side we have California so this figure um is telling you what the change in outage intensity does to the change in percent change and solar capacity so it's a very similar figure to these figures right total storage total solar um so here's the total solar change in average intensity in California uh it increases same here so we have the change in average intensity by 20 you have more outages you're going to have uh more solar capacity he was particularly have more solar capacity because you have more PV and Battery however some of those who adopted this pvn battery chose to adopt the pvn battery because instead of adopting PV only and that's what we see here so PV and only is negative so people are not adopting PVA uh or they're not adopting TV only because batteries are available and so they're adopting PBM battery uh and so when outages increase you're basically cannibalizing the PV only group uh and shifting them to PV and batteries installation California is slightly different and this gets back to what what uh I was talking about before with those coefficients so here in in California we see a you know you increase the average intensities you have more outages in California and with those coefficients that I showed you before I'm actually going to flip back to them really quickly you have this some of this these positive coefficients here on the negative coefficients here which basically are saying that when outages increase a bunch of people in California this is the positive coefficient are going to be buying solar anyway so so an increase in outages increases code option but it also increases just PV only which is different than any other states that's fascinating to me so total solar actually increases by even more in some sense you could say people in California are even more responsive to outages than in other states so a 10 increase in outage leads to increase in solar capacity by eight percent in California and one percent the rest of the country finally we're going to get to the role of Financial incentrics and I'm right at halfway points and I have a couple two slides left this is three or three sides left so I'm right on time here so the role of financial incentives state and federal programs that offer rebates from stalling solar technology this is the the California sgip provides incentives um is an example of this so we're going to run a counterfactual exercise we're going to reduce the pro post rebate price by 20 for the The pvm Battery Systems it's similar in magnitude to the sgip and look at the effects on solar and storage capacity and look at substitution that are basically are we going to be how much are we actually going to be increasing total PV only uh total PV the ivory PV of both uh or how much are we just you know switching people between those two technologies and that allows us to calculate some return on investment types of calculations so here are the effects on adoption let's start on the left hand side the left-hand side we have all other states in California and we have the effects on solar capacity in megawatts so we have PV only PV and battery in total and this shows that the solar capacity increase uh in megawatts of capacity so when you uh put in this 20 price reduction California gets a big boost this is consistent with what I was saying before the the responsiveness in California is greater for PB and Battery than it is in other states um a whole bunch are going to be shifted I mean so in both from PB only to pvm battery but you do see an increase and it's a greater increase in California than in other states in the total amount of just solar capacity on the right hand side we can look at the effects of storage capacity and we can kind of see PV and battery and obviously total of PB and Battery are pretty much the same so we see a greater increase in PBM battery and this is again consistent that in California relative to other states we do see more responsiveness to uh price changes or outage changes people are just more responsive in California in uh in being induced to to uh adopt pbn batteries so providing a 20 price reduction increases storage capacity by about 11 to 8.3 percent in the in California and you pay three percent in the other states there is a high substitution between those those two technologies though or technology options and you can do some quick uh calculations of return on investment um finally we can look at return on investment and I'm just kind of skip that for time reasons I want to make sure we have time for questions we do kind of look at the return on investment in power outages when you look at change in an outage intensity and uh and so it's an interesting the return on investment um actually slightly declines with more average intensity because basically people are going to be adopting uh solar and storage anyway there and do set to get solid storage anyway and that's sort of some of them are at least so that's sort of what's what's going on there so you'd get that that the market gets bigger and for code option when you have more outages uh the return on subsidy Investments actually declines someone that's so to finally conclude oh that came out funny um in this project we study complementarities between solar and storage um this is an ideal empirical setting for distance angle of preference correlation from complementarities which is really what we're going to be doing that's kind of of our model we do find that consumers increase valuation of solar oil and PV and battery out when the pvm battery option is available and we do find strong preference correlation so 80 of PV and Battery adoption is cannibalized would have not taken place anyway but would have come to be coming from uh PVE adoption so what if I've been solar adoption anyway um but power outages appear to be a very important factor in the code option decision they've clearly increase the value of storage increase the co-installation rates in the spur the adoption of solar California it's an even strong in California it's an even stronger effect um and California is at a higher base level already of code option um and then incentivizing storage well it increases adoption of storage as intended and has only a small effect on aggregate solar due to the number of people you would set device storage a bunch of people are going to be switching from getting PV only to pvm battery substitution and then they're going to be some people who would have not bought PB at all gone down the track at all or incentivized to co-adopt because of the more affordable PV and Battery substitution option so with that I'm I'm at the end of my slide deck and I'd love to take some uh some questions in the Q a um there are quite a few of them here I've noticed um and some are getting answered which is is great um so I think uh Naima will pass it back to you to moderate um going forward um but thank you all for your attention as Naim mentioned uh we have a draft just about you know we're still polishing up about to submit it but it's it's ready to to be shared with with anyone and we love your your feedback and thoughts on uh on this work excellent yeah thank you so much uh Ken as you noted there are a number of questions have already been um uh posed and answered um so I think uh Andres and um Brian have been good at answering the questions as you go um so please do enter additional questions uh in the Q a again just click on the Q a button and enter your question there and we can we can address them now so we have a healthy amount of time about 25 minutes um or as long as as we need to to answer these questions um let's see so there are a couple that have been answered that perhaps we can um re-revisit or or maybe discuss a little bit um in a little bit more uh depth um so so one question is the California correlation with solar only and outages the function of the long lead times on batteries many people tried to install batteries but it was taking multiple years to get them installed um which is uh an interesting point but it's the um can if you have any any thoughts on this yeah so um Andres already answered and said that we don't have a decisive explanation about why California is different than the rest and I think that's true um I think that the fact that California has this um longer slightly longer lead times now one thing to note is that there are long lead times in many states um California's not the only state with long lead times but California absolutely had long lead times for for quite a while um where except multiple years to get installed and um that could should the California lead times be significantly different than the other states uh that could be a potential explanation um I don't think that would be the only explanation but I think it's a really interesting point um playing a role here things are going into to play and the difference between California States uh great so we have a question here um I may have misunderstood your description on the graphs and discussion on the relationship between power outages and solar only adoption the graphs show a negative relationship so more outages result in lower solar only adoption is that interpretation correct and if so uh would would there be fewer solar only adoptions as outages increase I would think there would be at least a neutral effect the two different things and I'm going to share my screen again to try and uh bring you back to that point if that's okay um because it's just so I'm going to come back to what you saw here so what you saw is that uh in other states outside of California we actually did see if you have more outages PV only declines so that's consistent with what you're saying in California however we see PV always increasing so let me talk about uh those two findings and a little bit more about what they might be really meaning so in other states we see PV only declining however this decline in PV only in other states almost entirely goes to PE Plus Battery so it's not that these people don't install solar anymore it's that because of higher outages they co-ed out so that's really what's what's going on so the total solar actually increases and so you mentioned if I could be an almost you know potentially a neutral effect which you have in mind probably is this dotted red line which is the total solar which includes co-adoption of PV Plus Battery and PV only which is and that that actually slightly increases so total solar increases with more outages it does decrease with fewer outages but not a lot utilities spend a lot of time attempting to uh to try to do tree trimming uh underground lines Etc it's that's not going to cut the solar Marketplace they make it have a small impact but if you do see a lot more outages than you you do see quite a large and pretty similar again with climate change this is this is potentially the world we're moving into the despite effort s of States California is a little different now California you see people uh you see total solar going up in the same way but what you see is that PV only also goes up in California so why would that be it could be that after outages people are are just thinking more about solar and about energy Independence and about what they can do they might get to the point where they're thinking about maybe even the fact that PV and Battery was available makes them talk to the solar installers and then maybe they get sticker shocked and realize that PV and battery is just too expensive right and and so but they've already gone halfway through the process they might as well put PV only on it's still a pretty good deal um so they end up installing TV only so that's one potential story or narrative for what could be going on there um we were able to rule out the possibility that people were putting in PV only along with inverters that allow them to to um Island on PV only that there are a handful of inverters that allow you to do that and we actually delve into that and identify those inverters and saw no real change uh no no real big uh change so these are mostly people who who can't island with their solar panels um the ones who have PV and batteries and Islands they can they can uh you know see the only people still their their solar panels would go down if the grid goes down um but I think the Salient story is probably the most likely story they're just thinking about it they know the TV battery is an option they may have had friends with it and then they go through the process and decide TV only is actually the the right path for them so those are our explanations um welcome emails to Tamir to others with other explanations as well excellent uh thanks there there were a couple questions about the data in particular uh why Texas was included there are a number of other states that aren't included as well so just I did want to [Music] um to highlight what what Ken had mentioned this the data for the solar Plus Storage installations are from the tracking the Sun data set so um this data set is not a complete data set it doesn't include all states it doesn't include all systems in all states it is a sizable data set in in numbers but it's not comprehensive and so there are states where we weren't able to get any data and Texas is one of the many a number of other states are not included in that data as well so that that explains um why we aren't seeing every state in in the slides that highlight state level results okay uh let's see a question here in the counterfactual model the outage intensity increasing 20 percent is leading to a substantial increase in storage adoption is this the direct output of your choice model uh the coefficient of the model is usually considered a local estimate meaning that it is more valid near the original outage value how do you validate it still how do you validate it um and still have the extra extrapolation power when outage intensity increases by 20 or even more that's an interesting question so uh we it is an output of the choice model um and uh it's now part of the choice model in the sense that we uh use the choice model to develop a set of parameters including the relationship between outages and adoption and we have a fairly flexible formulation that allows us to understand that um so we have coefficients that that tell us you know if outages increased or not um how does this this impact results you're correct that the cohesional model is is a local estimate so then you want to look at what is the variation in the data that you actually are using to uh to identify or to pin down that local estimate and fortunately for us the variation in the data is far more than 20 percent we see large large large changes so we're in some sense you know using periods of time and areas that have far fewer outages and periods of time in areas that have far more outages to pin down this relationship between the two um it is possible that that relationship actually changes with the amount of outages um and and that's something we're not looking at but we're what we are looking at is a nice average value um across uh you know the the variation that we do have or the the differences and outages that we do have which is Which is far far more than 20 percent so we we feel that the 20 uh estimate is well within the range that we can actually start talking about you'll note though that we didn't say 50 or 100 so we are very attuned to this this exact critique and then don't feel comfortable doubling outages or sending outages down to zero or some or something feel is something that we can feel comfortable with it's a great question uh great so um uh perhaps uh another question so are you saying that PV Plus Battery allows the facility to island in the case of an outage whereas PV only does not allow islanding except if a special inverter is installed in that case when that explained much of the negative PV only adoption with increased outages in non-californian States because PB only doesn't help address an adage yes yes that's exactly right so so just to elaborate on that a little more um there are only a handful of inverters out there that again we did some some bound research that if you put on a solar panel uh would uh but no battery um would allow you to um back up an outage there are very very few of those those inverts that do it it's actually kind of a tough thing to do without another source of um voltage coming in um so because of that uh you know PV and battery does allow facilities to systems o a home that has an evm battery um is all of the the PV and Battery inverters are designed to allow for islanding um in the case of an outage definitely the LG cam one definitely the Tesla powerwall Generac you name it but they all allow you to Island um but but PV only does not allow you to do it um so that could be definitely playing a role in the negative PV only adoption with increased outages in the non-california States because basically you have increased outages going PB only doesn't really help you with increased outages very much um if at all unless you have one of those special inverters and even then it's it's a really iffy thing like maybe in the middle of the day when the sun's really shining it'll back you up but uh but it's not going to back you open at night or in the evening it's not going to back you up if a cloud goes overhead so that's part of the reason why uh you don't people don't consider PV only as a reliable or even all that useful backup so so that that is actually very much the explanation for why we saw that that negative relationship for Pb only and why they all basically with higher outages a lot of them are switching to PV Plus Battery excellent um so uh another question in Puerto Rico our research teams have seen a similar pattern of PV only and PV plus energy storage in California particularly spiking after hurricanes Irma and Maria to which perhaps we can share insights have you considered a correlation between catastrophes such as a massive the massive wildfires to outage time increase yes we've considered it we have not estimated it um we've considered a lot of things uh but it's it's almost another paper a very interesting one in fact um but I think that there's clearly something going on with catastrophes and long outages they're really um a couple different types of outages in in our data the outage from the from a catastrophe a hurricane a big Wildfire sometimes those are multiple days here where I live in Connecticut you can go for a week or more um for a big hurricane that comes through and not sat a ton of power lines or big winter storm um but in but a lot of outages are are you know some malfunction happens and they're short outages high percentage advantages or these kind of short typical outages um but that often don't bother people as much people might not be so concerned having an outage for 20 minutes um what is it about four hours is how much your four or five hours and you need to be worried about your refrigerator right so so once you start hitting four or five hours that's when people start really getting uh and and wanting to spend money for defense it's a terrific point and one reason why we didn't want to focus on that as Ken mentioned it's a completely different project at that point uh these that level of catastrophe would have huge implications on the supply side as well so if we're trying to look specifically at consumer demand for solar and solar plus storage options we would not want to use variation in outages that is due to these catastrophic events that would lead to issues with you know trucks going out and actually installing solar itself so by using this variation instead we can focus more on the demand side [Music] but I think uh understanding what's going on in Puerto Rico is incredibly important and Incredibly interesting as well great so Brian actually answered this question but I thought it would worth uh repeating here so the current adoption stage uh position on the adoption S curve of solar and PVE is going to be different in different states especially considering California and other states does this affect your model and results um and Brian feel free to repeat uh what you would you typed in here uh but wondering if there's anything else to add just that it's really a terrific point and it's one reason why we actually ended up uh using a more structural model um in this research to try to capture the actual functional relationships uh the difference between California and a lot of these other states um no you know there's there's large differences and one of those is the Baseline level of adoption uh and therefore you can see large effects on maybe the utility of co-adoption versus adopting solar as a standalone product outside of California but when you have Baseline adoption rates very very small the the the total effect you're gonna then see on aggregate adoption might not be as large and that's why when Ken showed that graph on these aggregate effects you actually saw larger effects in California because those Baseline adoption rates were higher and you were on a steeper part of that response curve than you do in uh the rest of the country so it's a great question great um a question uh did this analysis consider the impact of uh nem-3 and other regulatory barriers in California well we can quickly say an M 3.0 um is after our data sample so so the answer is no um you have data through 2022 and 2023 then it'd be very interesting to start to include those factors um we do account for changing incentives incentives um that that the code system or a solar system and we use those data to help us better uh pin down the relationship between incentives and adoption and that actually fundamentally is what is driving our results in the counter factual where we are changing the incentives around um a question are these results residential only would commercial or industrial commercial customers who rely on energy Supply as business essential and who are willing to pay more for reliability have different results um so more PV battery to achieve reliability [Music] but the results are driven by residential absolutely scale systems um a large commercial or industrial facility probably would not be in this data they might be putting in a much larger system uh they probably would pay more for liability they also have a generator as well um they're a different Market um and I think there's there's a whole set of different considerations that uh that would occur when you start talking about you know a large industrial facility or a large commercial facility so these are all small scale systems that said I mean I think I think the small scale systems do make up a very large portion of the market um and uh when you think about it comparing utility scale solar batteries that that's a huge portion of the at least megawatts being put in largest portion of the Megabots being put in and understanding the number of decisions and how decisions are made it's really useful to be focusing on just small scale systems rather than those who have a slightly larger system because the decision process would be different um excellent let's see um what type of incentives did you model in the adoption of PV and storage Grants tax credits and were some incentives better at increasing uptake than others Andres you may want to take this on we had the total you know dollar value of the incentives um but we did not do an analysis uh a point of sale Grants versus tax credits um I'm just kind of lumped them in dollar values together I think that's a really interesting line of research that that one could explore one of the interesting things with tax credits is if you don't have enough ability you may not pay it um they lead you into a leasing model I should note that we do account for leasing in in this set that hasn't come up yet but we do have a um variables for for releasing uh whether it's a third-party owned type system so we are accounting for for this in in there um but Andres do you want to add anything on the different types of incentives no okay that's great so we we don't and I think that's a really interesting line of research so questioning it and so this is a little bit more of a comment uh an interesting topic for future research would be the question of how alternative financing models such as utility leasing impact adoption rates especially given 30 cost Adder for solar plus PV versus storage alone driving up out of pockets pocket costs I this um there are some really there's some great work including papers that come out of uh lbl and nrel and others about solar leasing um third-party ownership it's definitely an important area to study the intersection between that and uh and co-adoption is something that we implicitly are modeling but we're not focusing on in this study um we're not you know trying to get results about about leasing we're trying to understand the aggregate Market um but we do have room to potentially explore that further there it's in the data we do know if it's a third-party owned system so there are some things that we could do to have a better sense great uh just a question on is it possible to make this recorded Video available and yes absolutely we will follow up um in about a week with everyone who had registered for this webinar and uh you all to um make this to send a link to the video it'll also be at uh on our EMP so that's the electricity markets in policy group at Berkeley lab the their website so emp.lbl.gov Publications and you'll be able to view it there uh it'll be linked through YouTube okay so uh let's see I we have a great question on the source of data for the State ranking of outages all of our outage data comes from Andres actually I'll leave it to you to explain to the data set a little bit more advantage.us
yeah so all the um data comes from an on outages come from the same source and this is poweradage dot us this is our website and it's probably and we kind of through here we got access to this data and it's all coming from the same source and all the rankings and everything we use in the paper come from that source excellent and with that we are reaching the bottom of the hour so I'd like to again thank Ken for the presentation Anderson Brian for supporting and answering all the questions we have noted all the the questions here and appreciate the the input uh feel free again to email any of us we can send a draft uh shortly for uh this this report and as soon as it is published it'll also be on the EMP website as well as the the journal on the journal web pages of course as well uh excellent so thanks again have a great rest of your day and goodbye thank you very much everyone