Is your goal real-world impact? Then use marginal emissions.

Everyone knows you can’t manage what you don’t measure. Less often pointed out? You can’t manage what you measure incorrectly

Corporate net-zero targets are at an all-time high, per reporting from The EconomistIn fact, fully 75% of the world’s largest corporate greenhouse gas emitters have set net-zero by 2050 (or sooner) targets, as of an October 2022 benchmarking analysis by Climate Action 100. This is good news.

Or… it should be. Of course, these targets will only genuinely decarbonize the atmosphere if they measure the real thing. And, unfortunately, that’s not always what happens.

From South Korea to Europe to the United States, corporations are under more scrutiny for potential greenwashing than at any other time in recent memory. 

At WattTime, we care about this not because we care about catching bad guys. In our experience, the vast majority of corporate emissions miscounting is a genuinely well-meaning mistake. But such scrutiny is also good news nonetheless. Why? Because it is forcing corporations to re-examine their sustainability efforts to better align with true impact that corresponds to real-world emissions reductions, not merely on-paper-only green claims.

And as companies allocate growing sustainability budgets, a heightened focus on actual impact empowers them to identify and pursue strategies that yield the highest real-world decarbonization return on investment (ROI) — and, reciprocally, to avoid strategies that cause a real-world increase in total global emissions.

Using the Right Math Matters

How companies measure the emissions they cause and which math they use to do so matters. A lot. That’s because, let’s face it, climate change is starting to claim lives. And the only thing that will save lives is impact — whether and how much a company’s actions genuinely cause total global emissions to go up, down, or stay the same.

Historically, much carbon accounting was done in terms of average emissions factors (AEFs). AEFs take the overall electricity generation mix for any given power grid, then apply it to a specific company’s load for their facilities. This was a fine solution in the early days, when carbon accounting didn’t actually do much, and most companies were not taking meaningful real-world actions based on these emissions factors. 

Times have changed. Today, companies are actually meeting GHG targets, optimizing their actions, and taking sustainability seriously. This is fantastic news, but it means that today, the connection between carbon accounting and reality actually matters.  

But there’s one big problem. AEFs are the wrong math for measuring impact, because they ignore the basic physics of how power grids operate — including how power grids respond to various influences. Using AEFs assumes that all generation sources on a power grid equally share in outcomes. They don’t. Nuclear power plants are not going to turn on and off in response to what one electricity user does. Neither will always-on baseload plants.

Moreover, simply making AEFs more granular, such as hourly, doesn’t solve the problem, either, because it still ignores fundamental power grid operations.

When a company chooses to site a new facility (and its electricity load) — a data center, a factory, a new corporate campus — in a particular region because that region has a “green” power grid… When a fleet of electric vehicles (EVs) uses smart charging to modulate when those EVs do and don’t charge… When smart thermostats and building energy management systems modulate the flexible portion of a commercial building’s electricity demand to shift load across hours… 

All of these and other examples don’t impact the entire generation mix. Most of the power grid’s generation stack merrily chugs along unaffected, blissfully unaware of these influences.

But the common corporate decarbonization strategies mentioned above do impact a specific subset of generators that respond to the corresponding increases or decreases in electricity demand. It’s precisely these generators — and their emissions — that matter for understanding impact.

They are known as marginal generators. Their associated emissions intensity is known as the marginal emissions factor (MEF). And their emissions are the marginal emissions: those emissions that specifically result from marginal units responding (e.g., turning on, ramping up) in order to meet the next incremental megawatt of electricity demand.

If a company chooses to site a new facility in a particular power grid, it’s the marginal units that must meet that demand — and therefore, the marginal emissions that best measure the impact of that load-siting decision. If a smart thermostat or EV charging software shifts the timing of power demand, it’s the marginal units that are impacted — and also therefore, the associated increase or decrease in marginal emissions that best measure the impact of that load shifting.

The temptation to use AEFs is understandable: they are widely available and the calculations are easy to run.  But this is a well-established area of research. Scientists and grid experts agree that AEFs do not accurately measure impact. The GHG Protocol is clear that one may not use AEFs to measure avoided emissions; rather, they specify use of MEFs for such Scope 2 calculations. The list goes on and on.

Widespread Agreement to Use MEFs for Impact Assessment

More than a decade of robust research and widespread agreement among scientists and grid experts support using MEFs as the right way to measure the environmental impact of electricity system interventions. For example:

Here at WattTime, we’re strong advocates for measuring whatever will affect real-world total emissions. In electricity, that means MEFs. (Within our datasets, they’re referred to as MOERs: marginal operating emissions rates. You can read more about our perspective in our 2022 insight brief about impact accounting.)

In the wake of the UN IPCC’s AR6 final synthesis report about the climate crisis — underscoring the need for rapid, deep decarbonization of the global economy — none of us can afford to base decisions, and impact assessments, on faulty math. We need to make authentic progress reducing global emissions. And for that, we need to use marginal emissions data to honestly and accurately reflect how power grids actually respond to the strategies we implement.

You can't avoid emissions without additionality

To beat climate change, humanity needs to massively expand the global supply of renewable electricity to rapidly wean our power grids off existing fossil-fueled power plants. Here at WattTime, our goal is to support and cheer on anyone aiming to build those renewables in ways that drive more impact, faster. We call this “emissionality.”

We’re perhaps best known for pointing out that you can drive more impact by building new renewables in areas where each new clean kilowatt-hour replaces a greater amount of dirty fossil-fueled marginal emissions. But we recently received a gentle critique that we think is a good and fair point: why has WattTime never said much about additionality? 

After all, using data to invest in and build renewables where there are higher marginal emissions rates doesn’t much matter if you’re not building new renewable capacity in the first place. Which is the main thrust of additionality. You can’t avoid emissions without additionality.

Using emissions data can help multiply the beneficial impacts of building new renewables via an emissionality approach, but it’s nothing without the additionality foundation. In the absence of additionality, quantifying avoided emissions amounts to multiplying by zero. Additionality is a key part of emissionality, and the former is more important than ever in 2023.

GHG Accounting and Impact Are Misaligned

Scope 2 of the Greenhouse Gas Protocol (GHG Protocol) — covering the emissions associated with purchased electricity, along with how to account for renewable energy procurement — has been a key tool for driving corporate investment in renewables. But the protocol has a glaring hole.

Currently, a corporation can technically reduce their GHG Protocol carbon footprint without necessarily achieving a corresponding reduction in atmospheric emissions. In other words, they can decarbonize themselves on paper, without actually moving the decarbonizing needle for the world in reality.

As climate analyst Kumar Venkat explains in a recent column, with current GHG Protocol Scope 2 accounting methodologies, "if some businesses reduce their carbon footprints, then others will be saddled with higher footprints (this is explicit in the market-based accounting rules for electricity purchases and is implicit in other cases such as material purchases in the value chain).” This flawed approach means sustainability teams waste precious time, energy, and resources shuffling around claimed responsibility for emissions, without necessarily causing global emissions to actually go down.

Additionality Keeps the Focus on Impact

While some companies might procure renewable energy for purely economic reasons — such as for a fixed-price economic hedge to guard against energy price volatility — most corporations are going green with their energy as a way to reduce their own emissions and help move the world toward net-zero.

Making progress toward global net-zero emissions comes down to two fundamental questions: 1) Did we CAUSE MORE renewable energy to get built (vs. merely taking credit for something that was already there and/or taking credit for renewables that would have been built anyway, with or without your action)? 2) HOW MUCH fossil emissions did the extra clean renewable energy we caused displace? This brings us back to the fundamental importance of additionality: if we aren’t first causing more renewable energy to get built, the second question regarding avoided emissions becomes pretty irrelevant.

We begin to address the latter issue in our recent Impact Accounting whitepaper. In it, we call for the GHG Protocol to more-directly measure the Scope 2 emissions benefit of different interventions, such as renewables procurement, instead of counting proxy megawatt-hours. Merely adding additional attributes and/or granularity to unbundled renewable energy certificates (RECs) is insufficient.

But this is just half of the equation. The other critical missing feature for better-aligning with real world impact is an assessment of whether the reporting organization caused those interventions. In other words, did they have a material impact on the additionality of interventions such as renewable energy capacity. 

Additionality must be present for an organization to have an authentic impact on global emissions. Using good marginal emissions data allows us to amplify and optimize those impacts via emissionality-style strategies.

How RECs Lost Their Way and Divorced From Additionality

So why are we having a renewed conversation about additionality? The current GHG Protocol Scope 2 market-based method defines a purchasing mechanism that allows corporations to reduce their GHG footprint by retiring energy attribute certificates (EACs) like RECs and guarantees of origin (GOs). And so it follows that EACs have become the accepted “proof of purchase receipt” for green energy.

When EACs were first created, this made sense because renewable energy was rare and came with a significant price premium, and so essentially all renewable energy projects were additional. But a lot has changed since then.

Partly because the market-based standard defined EACs as the primary mechanism to reduce an organization's footprint, companies began purchasing EACs in volume. For example, in the U.S. the voluntary REC market roughly tripled during the decade 2010–2020. This is good news for the planet. BUT, unbundled RECs have comprised the largest share of that market, and there has been growing recognition and criticism that unbundled EACs alone are far too often not actually causing new renewable energy to be built. By extension, they also too often don’t genuinely represent material emissions reductions.

Of course, in 2023 unbundled EACs are not the only mechanism organizations use to procure renewable energy. There are now a diversity of procurement options, including both direct / physical and virtual power purchase agreements (PPAs) as well as utility green tariffs. Not all of these renewable energy procurement options have the same impact on renewable energy development. This is why more and more corporations are shifting to power purchase agreements to procure renewable energy, as they are generally accepted to have a systematically higher level of additionality.

Additionality Comes Back Into Focus

And so, additionality has become a goal or prerequisite for many organizations pursuing authentic action that drives investment in new renewable energy. For example, it is a prerequisite in Salesforce’s procurement approach, which the company articulated in its 2018 Clean Energy Strategy and its October 2020 white paper More Than A Megawatt

"The purpose of our 100% Renewable Energy program is to increase the proportion of renewable energy on the grid. Therefore, we only count new renewable energy generation that we’ve helped catalyze or that our suppliers have catalyzed on our behalf. Often this means providing enough financial certainty to a project's developer or financier to guarantee the return on investment necessary to justify large upfront capital investment."

Google also acknowledges the importance of additionality in its 24x7 approach to renewable energy procurement.

"To ensure that Google is the driver for bringing new clean energy onto the grid, we insist that all projects be “additional.” This means that we seek to purchase energy from not-yet-constructed generation facilities that will be built above and beyond what’s required by existing energy regulations."

At WattTime, we’ve concluded a key barrier holding back more organizations from following suit is that — let’s face it — precisely and accurately quantifying additionality can be difficult. We have rarely brought it up because we didn’t have answers ourselves. But we’ve come to agree with the many organizations who have been saying that we as a field must find some reasonable, objective way to quantify it. 

One reason for doing so is because, in reality, various parties each have partial claims to any given project and its additionality... the renewable energy developer, the bank / financier, the corporate offtaker, the tax equity investor, and the REC purchaser.

But perhaps more important, doing so can also pave the way for EACs to once again map to real-world impact. Renewable energy is part of a blended supply chain of electrons, in which "good" and "bad" inputs get mixed and spat out the other end without differentiation. Yet the market needs a mechanism and signal for buyers to show (and pay for) demand for "clean" versions of the “thing.” That's where book-and-claim approaches, such as EACs, come into play. We need a way for the voluntary market to continue sending signals, while having those signals better map to REAL impact.

A Path Forward on EACs and Additionality

WattTime’s expertise is in measuring the effect a change in energy consumption or generation has on emissions from the electricity sector. There are going to be other organizations that do a better job than us at quantifying additionality. But we view the success of this work as fundamental to what we and so many others really care about: seeing atmospheric emissions go down in reality. So, we’ve been working hard at figuring out who can get the job done, and what it might take. 

To do it, we’ve been having an increasing number of conversations with renewables developers to understand what drives the construction of new renewable energy and therefore who takes credit for getting projects built.

Most seem to agree with what the team from Schneider Electric wrote in a white paper for Smart Energy Decisions“Most renewable energy projects cannot be financed and built without a secured, creditworthy off-taker like a utility or corporation… which makes the role of additionality very straightforward: without that long-term commitment, the project wouldn’t get built.”

The world is no longer so black and white. GHG Protocol should recognize that additionality is a spectrum. All EACs are not equal. Procurement mechanisms and project specifics cause different effects on development, but this is currently obscured, in part because the GHG Protocol treats all EACs equally under current methodology — whether bundled as part of a PPA, required in a regulatory environment, or unbundled.

On this front, progress is being made to assess impact empirically and create more transparency for offtakers. For example, we’ve seen a few proposals that try to quantify this differential impact of various procurement options. RMI has proposed a “procurement factor” that could be used to compare the value different procurement options provide to renewable energy projects.

We are intrigued by this proposed methodology because it shifts from a binary test for additionality towards a spectrum that different procurement actions would fall on. The European Union recently released rules for renewable hydrogen that only allow renewable energy developed onsite or through a PPA and recently constructed and unsubsidized to count towards compliance with the rules. We encourage other organizations to explore these approaches to additionality as well as provide potential alternative additionality tests. 

Implications for Decarbonizing Other Sectors Beyond Electricity

The certificate question has broader implications beyond electricity accounting as well. Today, other sectors are considering implementing market measures for accounting, including steelaviation fuelshipping, and natural gas. These could potentially be powerful new mechanisms in the fight against climate change. But only if we can learn from the past and design them better this time to ensure authenticity.

Before the GHG Protocol considers allowing certificates in these sectors in addition to electricity, they should understand how certificates and procurement options drive development of new clean resources and ensure they are not just rearranging who is responsible for emissions with no actual net reduction in global atmospheric emissions. 

Overall, we think that Scope 2, if it retains the market-based method in some form or expands market mechanisms to other scopes, must include some assessment of whether the organization’s action caused the reported reduction in emissions inventory. For Scope 2 and EACs we put out a call to the industry to suggest potential tests. 

Henry Richardson is a senior analyst at WattTime. Please contact Henry if you have questions, comments, critiques, or proposals regarding additionality.

Major California utility tests automated emissions signaling, affirms it can reduce device-level emissions from associated electricity use

At this very moment, even the most-efficient appliances are sucking up energy indiscriminately from their local grid—clean, dirty, whatever’s on tap at the moment. Until recently, there’s been little choice in the matter. Now however, it’s possible to get choosy about how we power up the machines and devices we depend on, from electric vehicles to smart thermostats. And major utility providers are taking note.

Here at WattTime, we’ve been advancing a capability we call Automated Emissions Reduction (AER). It provides a software signal that allows smart energy-using devices, from EVs to thermostats, to sync with clean energy and avoid dirty energy. By operating with the intelligence of real-time marginal emissions data, our software tells devices if using power now (or later) will in-turn cause a high-emitting power plant to respond, or maybe zero-carbon wind or solar, and it automatically opts for those low or no-carbon moments. All this takes place with zero negative impact for the end user. The technology has increasingly been battled-tested and -proven.

Now, California utility PG&E has conducted a rigorous analysis of WattTime's AER software. The results? In short: AER works. The 50-plus-page assessment is no light read, but it indicates growing industry interest in effective new ways of meeting emissions-reduction targets and driving other strategic goals, like demand response programs and renewable integration.
Four device-level examples of AER in action
To understand how AER supports broad utility strategy, it’s useful to consider first how AER works for the average device. PG&E’s analysis looked at four everyday appliances, in a laboratory setting, concluding that WattTime software effectively supports control of end-use energy consumption for each. By using AER technology to control their own versions of these appliances, people can…

  1. Curb heating and cooling emissions with smart thermostat controls. Global energy demand for air conditioning is expected to triple by 2050, making AC one of the top drivers of global electricity demand in the years ahead, according to the U.S. Energy Information Administration (EIA). In California, for instance, PG&E notes that AC usage often coincides with higher GHG intensity on the grid. Meanwhile, the EIA residential energy survey reports that space heating accounts for roughly 15% of an average home’s annual energy use. So it’s meaningful that utilities can take more ownership over the kind of power people use to heat or cool their homes. With WattTime’s AER solution, PG&E simulations found that the average homeowner could trim HVAC-related emissions by 7.5–13.2% per year.
  2. Maintain a water heater’s warmth, while cutting back on associated emissions. Water heating makes up 15% of a home’s energy use, according to the EIA survey cited above. With AER water heater load control, homeowners can make sure they’re using more of the clean energy that’s available from their utility. Per PG&E’s assessment, the water heater load controller “performed well” in controlling temperature and, in some cases, could reduce emissions by as much as 20% per day while maintaining desired water temperature.
  3. Ease up on the refrigerator’s carbon footprint with an AER-powered smart plug. Refrigerators may be a quiet but steady energy suck, constituting about 7% of the average home’s energy use. But it’s a myth that they’re always consuming power. In fact, refrigerator compressors only have to consume power in little bursts of cooling that happen about every 30 minutes or so—during which time, the grid’s supply can vary greatly. AER can help find the cleanest five-minute period within that window, supporting demand-response programs while enabling homeowners to keep both food and appliance in good shape. In PG&E’s simulation, this approach cut carbon emissions by 1.3% on average per day.
  4. Give EVs an instant ‘MPGe boost’ with AER service equipment. WattTime research shows that smart timing of EV charging can reduce associated emissions by as much as 20% annually, and up to 90% on some days. This will vary by location and grid. For example, PG&E’s California-based simulation team found they were able to shift charging time to achieve a 13% per day average reduction in GHG emissions.


The big picture: AER can help utilities achieve climate goals

Utilities working toward ambitious carbon emissions targets are increasingly seeing the broader benefits of adding AER to their toolbox.

For starters, AER aids renewable energy grid integration—and helps avert undesirable renewable energy curtailment—by using more surplus renewable energy. It does this not only by shifting flexible demand to windy and sunny times, but by especially targeting times when renewable energy is on the margin and at risk of being wasted.

AER also gets more out of demand response programs, especially when emissions rates and electricity prices are aligned. With AER, utilities can turn DR offerings into a year-round feature that truly appeal to customers. Our research shows AER boosts DR program enrollment and retention.

As California’s largest electric utility, PG&E’s report is another major affirmation that AER works not just for the individual devices people depend on everyday—but for the larger utilities that bring them to life, too. In a world of ever-more sophisticated demand response and renewable energy efforts, AER is proving a game-changing tool that grid operators can increasingly appreciate, and adopt.

Could ‘Emissionality’ be the next big thing to disrupt corporate sustainability and renewable energy procurement?

In the ancient past of corporate sustainability initiatives—like, say, five whole years ago—the concept of “additionality” gained traction and fundamentally disrupted the long-standing practice of companies buying unbundled renewable energy certificates (RECs) as the leading way to demonstrate their commitment to clean energy. Additionality came along and set a new bar: corporations could sign power purchase agreements (PPAs), whether direct/physical or virtual, that enabled new large-scale wind and solar energy to get built and added to the U.S. power grid. It has undoubtedly been an overwhelming force for good. Between 2015 and August 2019, corporations signed contracts for a staggering 17.7 GW of new renewable energy, according to the Renewable Energy Buyers Alliance Deal Tracker. And the investments continue. Just last month, telecom major T-Mobile announced a quintet of contracts for solar and wind projects in three U.S. states: Virginia, Illinois, and Texas. Meanwhile, also last month tech giant Google announced perhaps the largest corporate renewable investment ever: $2 billion invested in 1,600 MW of wind and solar projects spread across 18 projects in the U.S., South America, and Europe. All of which begs the question: Is new “steel in the ground” the end game ? Or do some investments mean more than others?    A new wave of innovation reaches corporate renewables purchasing RECs bundled with PPAs that pass additionality muster remain the standard, especially for the largest buyers that have the demand, credit worthiness, and resources to source such contracts. But with the climate crisis only deepening, we’re now seeing a new wave of innovation to make renewables drive even more impact. As with the decommoditization of electricity, which looked beyond treating all raw kilowatt-hours the same and started to differentially care about the source of those electrons (e.g., coal, natural gas, wind, solar), we’re now arguably seeing a decommoditization of the PPA. In this unfolding new era of corporate renewables procurement 2.0, we’re starting to see some buyers look beyond the raw PPA. There’s an increasing understanding that all renewable PPAs are not created the same. And I’m not merely talking about common contractual details: price, term length, wind vs. solar. More importantly, I’m talking about location. Where new renewable energy projects get built matters, not in terms of proximity to a corporate buyer’s facilities, but rather in terms of the positive impact a new wind or solar farm will have on grid emissions. And those impacts can be significant: Holding all else equal (e.g., project budget, MW build side, interconnection possibilities), the practice of emissionality, according to WattTime research, can achieve up to a 380% increase in avoided GHG emissions. “Here at WattTime, we’ve started calling this concept ‘emissionality,’” says co-founder and executive director Gavin McCormick. “Like additionality, it’s a way for renewable energy buyers to ensure their purchases are really driving impact. But it’s a more quantitative way of thinking about impact: by directly comparing the real-world drop in fossil fuel emissions that different renewable energy projects cause.” The idea is straightforward: Although renewable energy itself is by definition always emissions-free, where such projects get built greatly influences their true net impact on overall grid emissions. For example, yet another wind farm in a region of the country already saturated with—and perhaps even curtailing surplus—wind energy isn’t going to reduce total electricity sector emissions as much as a solar farm built in a region of the country where its output will displace coal-fired electricity. Emissionality was the driving force behind Boston University’s wind power purchase announcement in September 2018. The university looked beyond the New England region and ultimately signed a contract for a project in South Dakota. That’s because BU’s 2017 Climate Action Plan targeted carbon neutrality by 2040, which included a focus on buying wind and solar energy to offset its electricity use and, crucially, seeking out projects that would reduce emissions as much as possible. In other words, BU didn’t just want renewable energy; it wanted renewable energy that could deliver the greatest emissionality benefits, too.   Clearloop is putting the spotlight on emissionality Until now, examples like BU’s have accounted for only a minority of the corporate renewable PPA market. But there are signs that emissionality is gaining momentum. For one, new entrant Tennessee-based startup Clearloop—which is already getting a fair amount of buzz—is the first to make it core to their offering. Rather than offer renewable PPAs against a corporation’s overall electricity consumption, Clearloop is offering renewables-based emissions offsets at the product level.  As a hypothetical, imagine that a shoe company wants to offset the carbon emissions associated with producing a particular line of sneaker. Once the company has calculated that emissions number, it can go to Clearloop to source an equivalent amount of avoided emissions, rooted in new renewable energy projects built around the country. It’s an intriguing twist on corporate renewables procurement. Corporations are typically accustomed to buying renewable energy on a MWh basis. Through Clearloop, they’re instead essentially buying renewables on an avoided emissions basis. This naturally lends itself to putting emissionality into practice. In order for Clearloop to offer its customers the biggest bang for their buck, it will naturally seek to build new renewable energy projects in those regions of the country where they can achieve the biggest avoided emissions. “The grid is not equally dirty across the country, so we saw opportunities to build renewable energy in places where it can have the best impact,” says Clearloop co-founder Laura Zapata. “Rather than tying carbon offsets to something less tangible and less connected to everyday actions, like trees planted, we’re basically leveraging companies’ desire to invest in carbon reductions and connecting it more directly to tangible renewable energy projects.”Accounting for emissionality of a project still has a way to go before it becomes a central factor in corporate renewable investment decision-making. But it clearly is making inroads. There’s growing recognition that better siting of new wind and solar projects can achieve deeper reductions in grid emissions, rather than adding yet more renewables to those regions that already have it in spades.

Residential solar+storage is coming. But is it actually better for the environment?

In the world of pairings there are the classics: bacon and eggs, peanut butter and jelly, milk and cookies. To that list we may now need to add another: behind-the-meter energy storage with solar PV. According to a report released last year from GTM Research—now integrated into the Wood Mackenzie Power & Renewables group—by 2023 some 90% of residential energy storage installations will be paired with solar.

It’s hard to imagine another clean energy technology whose market growth is so closely tied to deployment of another complementary technology. The only other example that comes to mind would be electric vehicles (EVs) and EV charging stations. It’s near-impossible and almost laughable to imagine a residential customer installing a home charging station in their garage in the absence of also purchasing an EV.

By the mid-2020s, the residential solar+storage market is going to get big. According to WoodMac’s most recent U.S. Energy Storage Monitor—released in March earlier this year—by 2023 and 2024 residential storage installs will surpass 1 GW annually.

Multiple factors are driving growth of residential solar+storage

Residential customers are adopting storage paired with solar for a variety of reasons. Some are of course interested in the resilience benefits of having their own clean generation and backup power for storing that self-generated electricity. Others will undoubtedly be interested in using the storage part of their system to reduce residential demand charges and/or arbitrage utility time-of-use rates, depending on what type of rate structure plan they’re on. Customers in the most-expensive retail electricity markets may be looking to insulate themselves from high and/or rising retail prices.

But other customers will be looking to pair their storage with solar for another important reason: to self-consume their PV generation. In other words, they’ll look to store their solar-generated electricity in home batteries, then use that stored electricity to power their home’s energy use. Maybe they live in a utility service territory without net metering, one where residential solar power exported to the electricity grid is compensated at a rate well below the retail price. Or maybe they’re on a rate plan similar to Hawaiian Electric’s Smart Export, which provides no export compensation at all during the 9:00 am to 4:00 pm block of daytime hours. Or maybe they’re simply motivated by environmental ideals, with the idea that self-consuming their own solar energy using a storage system helps to reduce their climate footprint.

These are rational and noble intentions, but in reality, there may be a wrinkle or two to consider.

Solar self-consumption isn’t always the answer to reducing emissions impacts

For residential customers pursuing solar+storage paired systems, the logic seems rational enough: a) produce clean energy, b) store clean energy to use later when solar isn’t generating, c) reduce your emissions and climate footprint. Right? Not always.

Although it’s tempting to consider residential solar+storage systems as units unto themselves sitting behind a utility meter, the reality is that they remain interconnected to a broader electricity grid. That grid is dynamic, just like the home systems. At times, renewables are cranking out kilowatt-hours of electricity; at other times, fossil-fueled power plants are ramping up to meet grid demand.

To wit, researchers Robert Fares and Michael Weber—in a study published in the journal Nature Energy—found that residential storage systems paired with solar in Texas can actually increase net emissions, rather than decrease them (vs. stand-alone solar). This counterintuitive finding has big implications. For residential customers that want to reduce their environmental impact, it’s not enough to simply say, “I installed a home solar+storage system.”

Instead, they need to ask themselves a question along the lines of, “What happens when I do or don’t use the grid, buy kilowatt-hours, export solar-generated electricity, or store solar power in my battery to use later?” The answer will give them a much closer and more-accurate sense of their true emissions footprint.

How Automated Emissions Reduction unlocks potential in residential solar+storage systems

Of course, answering the question of “What happens when…” requires both a) a way to know the answer to a fairly sophisticated question and b) a way to tell smart devices, such as a home energy storage system paired to rooftop solar, what to do when. Is it better to self-consume my solar, or store it for use later tonight, or export it now to the grid? Which option(s) yield the best emissions and environmental benefits? (As you might imagine, that answer can continuously change, making automation a key ingredient to the equation. No one should expect customers to manually modulate their systems!)

This is where WattTime’s Automated Emissions Reduction (AER) technology truly shines. (Please pardon the solar pun.) AER is a simple software update that allows smart devices to use energy during times of cleaner electricity and avoid times of dirtier energy. Behind the scenes, AER uses 5-minte increments of historical and real-time data (and eventually, predictive data as well) along with sophisticated algorithms and machine learning to deduce the specific environmental impact of your energy use.

It’s like giving residential solar+storage systems an ‘easy button’ for making hard decisions about how they interact with the broader electricity grids and the emissions impacts that go along with it. We’ve already shown how AER could be a crucial lever for reducing the emissions associated with stand-alone storage systems, such as in the California market.

Residential energy storage system manufacturers, solar+storage system installers, and developers should take note. Homeowners—and not just the eco-minded ones—are demanding features like AER, in part because it allows them to achieve the environmental benefits and self-determined control they’re ultimately after with solar+storage systems. The smart companies that roll this out sooner than later stand to gain competitive advantage and win more customers. With residential installations approaching 1 GW annually by around 2023, there’s a lot to gain—delivering easy-to-capture benefits while we’re at it that deliver on the ultimate promise of solar+storage systems.