Backup power solution providers need new ways to close deals and expand their market reach. That’s why many vendors are bundling grid games – Demand Response and coincident peak programs – into their sales pitches to boost their value proposition.
When a business invests in a backup power asset, they’re acquiring a solution used to keep operations running during an outage. Vendors use terms like “resiliency” and “peace of mind” to sell these products.
What they don’t realize is that backup power solutions can be combined with participation in local energy markets to get compensated to pay for the asset and earn revenue.
By offering opportunities for customers to lower their electricity bills and earn money, battery storage and generation equipment become much more than an energy resiliency solution – they’re a smart financial investment.
Let’s see how you can use these programs to close more deals.
Grid games: Earning money through Demand Response and coincident peak programs
Demand Response programs are designed to help balance energy consumption across the grid during peak times. When electricity demand is highest, utility companies notify participating businesses when to reduce their energy use and pay them for it.
Companies can sign up to participate in DR and earn up to $50K per MW annually.
Coincident peak programs incentivize businesses to lower energy consumption when electricity prices are high, but they must guess when it will happen and know how to respond. Programs like Ontario’s Industrial Conservation Initiative (ICI) provide financial rewards for reducing energy usage during these high-demand periods. However, identifying these key hours in advance can be complex, making effective participation both valuable and challenging.
Companies participating in coincident peak programs, like the ICI program, can save up to $380K per MW by responding to five peak notifications during a year. Ohio-based companies, for example, save $160K per MW for a single peak notification response.
Why customers should combine these programs with a backup power solution
When the electrical grid is under stress, customers receiving an event notification can switch to their backup power sources easily rather than developing and executing procedures to shut down (and spin up) operations. Instead of paying premium rates or curtailing operations, they can use their stored energy or generator to keep things running. This means lower electricity bills and more savings that can be used for the backup power solution.
The challenge for them is knowing when and how long to curtail far enough in advance to minimize costly disruptions. Imagine a production facility shutting down for eight hours when only five peak hours occurred. Those extra costs will never be recovered.
This is where bundling EnPowered’s services into your sales offering helps you address customer concerns and make it easy for them to participate in these programs.
Example: Battery pitch incorporating energy program savings
The graphic below presents real numbers to help explain this value to customers. Here, a battery proposal was created that includes future savings gained through the grid games in Ontario – specifically Demand Response and the ICI program (a coincident peak program), reducing their electricity costs (specifically, fees paid for grid infrastructure upkeep as part of Ontario’s peak pricing system). The total annual savings are $2,631,966 ($2,504,955 from coincident peaks and $126,027 from Demand Response):
- Annual electricity costs before the battery was installed: $5,009,952 ($417,496 monthly)
- Annual electricity costs after energy program savings are accounted for: $2,378,025
- Annual savings that can be used to offset the purchase of the battery $2,631,966
- This example even had excess savings, resulting in a battery purchase with no upfront cost and net savings of $653,263 annually on top of this.
These benefits will vary depending on factors like energy consumption, local utility regulations, and business operations. Regardless of your customer’s situation, the math is sound: backup power + energy conservation programs work to save money across North America.
Evaluating savings potential with Demand Response and coincident peak programs
The best way for customers to understand their potential is through a detailed assessment of current energy use, local energy markets and programs, and mapping out potential savings opportunities.
Consider these questions:
- How much do they spend on electricity annually?
- What is their average peak demand?
- Do they pay high capacity, transmission, or global adjustment fees on their electricity bill?
- Are they able to modify operations in response to a peak call notification?
- Do they have energy-critical operations that would benefit from a backup power solution during a peak event?
With EnPowered, you can help customers evaluate their answers and develop an earning solution based on purchasing a backup power asset. If they can say yes to even one of these questions, you’ve opened the door to more business.
Why choose EnPowered?
Convincing customers to pay for your backup power products through Demand Response and coincident peak programs requires skill and time. You need to understand energy markets and know how to ingest, analyze, and make curtailment decisions based on publicly available data from the energy provider – a full-time job.
EnPowered makes this easy. Using AI and game theory, we can accurately predict energy usage and market responses in regions across North America – sending your customers real-time, proactive notifications to prepare and curtail operations accordingly. And we know how to adjust your pitch to explain this clearly and effectively to help close deals.
The next step is simple. To get a partner who knows how to turn backup power solutions into a revenue source, contact us now.
