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Seeing a Bright Future for On-Site Energy Storage

Seeing a Bright Future for On-Site Energy Storage Urban Land (07/17) Brass, Kevin

Commercial property owners are rethinking their attitude toward energy storage systems as battery prices decline and third parties offer new financing models. "Everybody is recognizing that it is a necessary component of the overall [sustainability] picture," says Sara Neff at Kilroy Realty Corp. A tracking report from the Energy Storage Association found that the first three months of 2017 was "the biggest quarter in history for the U.S. energy storage market." Battery pack costs declined from about $1,000 per kilowatt-hour in 2010 to $230 per kilowatt-hour in 2016, according to a report released in June by McKinsey & Co. At the same time, states like California, New York, Massachusetts, and Hawaii are turning to incentives to help push companies to find ways to manage their consumption.

LBA Realty installed a Stem-operated 1.3-megawatt battery system last year that is believed to be the largest indoor energy storage system nationwide at a 2.1 million-square-foot mixed-use complex in Irvine, Calif. The system is expected to reduce the site's energy costs by more than $90,000 in the first year of operation. Meanwhile, Kilroy Realty is working with Advanced Microgrid Solutions to install Tesla-made batteries in five of its office buildings in Southern California.