HOMER Software Plays Key Analytical Role in Economics of Load Defection Report

The HOMER hybrid renewable energy economic optimization model is showing its power in a new way – by driving the analysis behind the ground-breaking report, “The Economics of Load Defection: How Grid-Connected Solar-plus-Battery Systems Will Compete with Traditional Electric Service, Why It Matters, and Possible Paths Forward,” which was released today by the Rocky Mountain Institute and co-authored by HOMER Energy LLC and others.

The report is a follow-up to the early 2014 The Economics of Grid Defection report, which first analyzed the economic potential for grid defection. The “grid defection report” was widely cited as the first systematic analysis of one of the challenges facing the utility industry today and into the future. The HOMER model was key to both these reports, demonstrating the value of this unique piece of software to the future of energy.

“While the solar-plus-storage systems analyzed in the new report have been technically feasible for decades, understanding the economics of what works in a particular location under a particular set of conditions requires analysis of hundreds or thousands of possible configurations,” said Peter Lilienthal PhD, CEO of HOMER Energy. “That’s why I created HOMER, to make this possible.”

Adding storage and the right inverter to a commercial or residential solar photovoltaic system can create a “smart solar” system – one that can meet some or most of its own needs. Whereas the previous report focused on systems that would permanently “defect” from the grid, the recent analysis looks at systems where the grid would be used only when either the load is particularly high, prices are particularly low, the solar resource is particularly poor, or some combination of these two.

HOMER, which stands for Hybrid Optimization of Multiple Energy Resources, is a decision analysis model originally created by Dr. Lilienthal while he was a Senior Economist at the National Renewable Energy Laboratory. Dr. Lilienthal obtained the commercial rights to HOMER in 2009, and began modifying it to meet the needs of the future energy market – both grid-connected and disconnected (“islanded”) microgrids – energy systems that can stand on their own, either some or all of the time.

HOMER is unique in combining the sophisticated engineering required to simulate a complex electrical system for an entire year with an economic optimization algorithm. This allows HOMER to make choices about how to most economically meet the electricity needs of the application being considered at each moment of the year. It then allows easy tabular and graphical comparison of what the least-cost system is under a range of conditions. HOMER Energy released a major update to HOMER – HOMER Pro – in November 2014, and since then they have updated its grid capabilities.

As the new report makes clear, solar-plus-battery systems will be a growing part of the energy landscape, but exactly what role they will play, and at what rate they will be accepted, remains to be seen. As conditions change, and pricing and regulatory systems adapt, HOMER will continue to play a role helping stakeholders analyze their options.

“The grid may evolve in many different ways,” said Dr. Lilienthal, “And HOMER Energy is ready to help stakeholders understand their options in a changing landscape. After decades of focus in remote microgrids for isolated utilities and communities, HOMER now has value to virtually every player in the growing market of grid-connected solar-plus-storage. Utilities, municipalities, and electricity users have an opportunity to rethink our entire system, and HOMER can help substantially.”