Demand Response Made a Path for Energy Storage Growth

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

EnerNOC (NASDAQ: ENOC  ) and Comverge pioneered the demand response business and in turn made energy conservation as valuable as energy production. This was their business plan all along, but they may have inadvertently created a path for energy storage to be a new growth product in the industry.

Energy storage has a great future if it can make storing solar or wind energy economical or allow a homeowner or community to leave the grid entirely. But for that to happen the energy storage industry needed a business model to make its product profitable. That's where demand response comes in.

Making batteries economical on a large scale
When the PJM Interconnection, a regional electrical power transmission organization, ruled that lowering demand was just as valuable as increasing electricity production it opened up opportunities for EnerNOC and Comverge to build demand response networks. But it also made an energy storage business model viable.  

What Solar Grid Storage and SolarCity's (NASDAQ: SCTY  ) battery system built by Tesla Motors (NASDAQ: TSLA  ) are planning to do is reduce peak energy usage at their installations by storing cheap energy or on-site generation and saving it for more valuable times of the day. This saves on demand charges, which are costs for the highest energy usage a building uses, and can also save money if peak charges are in effect. This is important in areas covered by PJM because electricity generated before or after peak times can be stored and sold into the system at peak prices.

This simple change to the use of demand response to supply storage creates a business model for the battery industry until markets like solar or wind are economical enough to demand storage.

Out in front of energy storage
The companies getting out in front of energy storage are going to have a key advantage. Interestingly, Panasonic could be a huge winner because it supplies Tesla's batteries and companies like Solar Grid Storage use the same lithium ion technology.

Look for General Electric to make a play as well. The company is working on flow batteries and has its Durathon Battery Energy Storage Systems. There's a vested interest to play a role in energy storage since it may replace some of its power plant business.

Electricity's biggest energy source
There's been a huge shift in where the U.S. gets its energy and another industry benefiting from that is natural gas. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 31, 2013, at 1:12 PM, StanO6 wrote:

    But, but, but @JohnPetersen (Seeking Alpha) says:

    "It'll never work!"


    Happy New Year everyone!

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2780103, ~/Articles/ArticleHandler.aspx, 9/29/2016 9:41:07 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,339.24 110.94 0.00%
S&P 500 2,169.36 -2.01 -0.09%
NASD 5,318.55 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 4:00 PM
ENOC $5.44 Up +0.02 +0.00%
EnerNOC CAPS Rating: ***
SCTY $20.48 Up +0.49 +0.00%
SolarCity CAPS Rating: ***
TSLA $206.27 Up +0.46 +0.00%
Tesla Motors CAPS Rating: **