Energy Storage Becoming a Staple of California Hospitality Industry

Jesse Remillard for Zondits, August 31, 2015. Image credit: Ben_Kerckx

Demand charges have been steadily rising in America for the last 10 years. These charges can account for 30% or more of a commercial customer’s utility bill in areas with high grid congestion, such as California and New York. This has led to a growing market for systems that can reduce customer demand charges and provide reasonable returns for their investment.

These so-called demand charge reduction systems use sophisticated software paired with battery systems to anticipate when facility peak electrical demands will happen and reduce their effect on the grid.

In two case studies, the Ocean Park Inn in San Diego was able to reduce its demand charges by 10% using an 18 kW system from Stem Inc., while the Shore Hotel in Santa Monica has been able to reduce peak demand charges upwards of 30% using a Green Charge Networks system.

Stem Inc. and Green Charge Networks have both found a growing customer base in the California hospitality industry. While both companies have installed their systems in California hotels, last fall Stem Inc. announced that it had finalized an agreement to install its demand charge reduction systems at sixty-eight Extended Stay America-owned hotels.

Part of the reason the companies have been successful is rooted in the creative financing options they both offer. By sharing the cost savings from the system, and utilizing local utility incentives, customers are often able to get the systems installed at no charge.

Ultimately, cost savings and simple paybacks are determined by local demand charge rates, the facility’s demand profile, and the ability of the installed system to predict the facility peak demands. Nevertheless, it appears that demand charge reduction systems rooted in modern software and maturing battery technologies are here to stay.

How the hotel industry benefits from energy storage

Green Biz, August 21, 2015

As battery storage technology has improved — Tesla announced in May its entry into the energy storage market — an increasing number of hotels are investing in energy storage systems to help reduce demand charges that typically account for at least 30 percent of a commercial electricity bill, and often as much as 50 percent.

“The idea that energy storage can be used to mitigate demand charges is fairly new,” said Gabe Schwartz, marketing manager for Stem. “Batteries have to be effective and the system has to know the building’s energy profile. It needs to know when to release stored energy.”

Stem generates monthly energy savings by learning the hotel’s energy usage patterns, charging when energy prices and demand are low and deploying stored power to offset costly peaks. The facilities staff is free to manage other operations while Stem automatically stores and deploys in the background.

Beyond automated storage, the inn’s CEO, Elvin Lai, furthered savings by spreading out energy-intensive activities with the help of Stem’s PowerScope software platform. Stem’s software displays real-time and predicted energy use, providing visibility into how the hotel’s energy usage patterns translate to costs.

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