Solar-centric microgrid venture aims to deliver megatons' worth of carbon reduction in North America.For small and medium-sized C&I customers, solar, storage, and backup power have traditionally not been cost-efficient. The high costs and complexity of engineering site-specific energy systems typically rules out these customer classes. Over the past decade, however, the microgrid market has evolved, and clean-energy companies are hoping to be able to target these users.

Recently, microgrid developer Schneider Electric has partnered with Huck Capital, and together, they formed a new company called GreenStruxure to deliver energy-as-a-service to commercial and industrial buildings. According to a press release, “This partnership combines Schneider’s industry leading energy management and microgrid expertise with Huck’s sustainability-focused investment and operational focus. The partnership creates an innovative alternative for building owners and operators who want to transition to renewable energy to lower emissions, increase resiliency, and reduce costs, without investing in renewable energy assets and relying on specialists to operate the microgrid.”

Background

Huck Capital has long sought to transform the century-old utility model, and modular microgrids have been a key factor in expanding the potential market. These systems are built around traditional technology platforms such as fossil-fueled generators, combined-heat-and-power systems and battery-backed solar systems. As a result, they offer customers energy and resiliency through reduced-cost, long-term contracts.

GreenStruxure promises to offer a no-money-down solar plan plus battery and on-site generation systems of up to 5 MW. While this will entail a long-term power-purchase agreement, the customers will still be paying less than they would through their utility or retail provider.

National potential

In the U.S. and Canada, 90% of the buildings are small and medium-sized. One study found that as many as 600,000 buildings in the U.S. could see reduced energy costs through on-site solar energy. The total demand of such a changeover could pull 145 GW into the clean-energy column. “Businesses want to maximize their energy independence and minimize their carbon footprint,” said Steve McBee, Founder and CEO of Huck Capital. “This model supercharges momentum for a zero carbon future and provides customers the clean, affordable, and reliable solutions they demand. The energy transformation has arrived, and there is no better partner to meet the moment than Schneider Electric.”

Although most modular microgrids are built around fossil-fueled generators, the value of solar for C&I customers is expanding rapidly. One analysis indicates that about 70 percent of the commercial buildings in the U.S. could cost-effectively install solar today. This is a dramatic difference when compared to the roughly 4.5 percent of the market that has already done so and the estimated 8 percent that will do so by 2025.

Simplifying the system

To make this work, Schneider Electric will provide prefabricated “energy control centers”—essentially the power conversion and control devices going into buildings. This will ease installation and interconnection complexities and manage commissioning and ongoing operations via its EcoStruxure cloud computing platform.

To realize the return on investment demanded by private equity investors, the new company will analyze and optimize the value of existing C&I energy tariffs and rebate structures and seek out additional revenue from demand response programs, wholesale energy market capacity or ancillary services, and managing customers’ demand charges or coincident peak charges.

Overcoming barriers

For most customers, there are two key barriers to adoption: the complexity of C&I solar installations and the availability of financing to achieve them. Bundling backup power into solar offerings could well boost the value for customers in wildfire- and blackout-prone California or the hurricane-threatened Eastern and Gulf Coast markets.

Focusing on clean energy

Huck Capital brings a decided clean energy focus to their work with Schneider Electric. According to Huck Capital’s Founder and CEO, Steve McBee, “Businesses want to maximize their energy independence and minimize their carbon footprint. This model supercharges momentum for a zero carbon future and provides customers the clean, affordable, and reliable solutions they demand. The energy transformation has arrived, and there is no better partner to meet the moment than Schneider Electric.”

Emmanuel Lagarrigue, Chief Innovation Officer for Schneider Electric adds that “Renewable energy, generated by buildings is no longer only accessible by a select few with in-house energy expertise and the capital to invest. This partnership will make decarbonized, onsite generated energy simple and accessible to a much bigger market.”

An average commercial microgrid using renewable energy delivers over 10,000 tons of greenhouse gas savings over its lifetime, the equivalent of saving 21 million car miles. The new company has a target of 5 megatons of carbon-dioxide emissions reductions from their pipeline of projects, at an average reduction of about 10,000 metric tons per project.