Virtual batteries can be a wonderful opportunity for large property owners such as real estate investment trusts (REITs). REITs often own hundreds of thousands of rental housing units, and they are always looking for a market advantage. By installing fleets of smart energy devices in their units and coordinating them as an energy resource (a “virtual battery”), REITs can market their properties as green, sustainable, and climate friendly. Owners can then receive revenues back from energy markets, reduce vacancy rates, potentially increase rents, and ultimately create a higher value for their buildings.
REITs are also great partners for Packetized Energy. They often have their own vendor network to implement IoT solutions (plumbers, electricians, etc.), and typically install consistent brands of electric devices. All this lowers the installation costs of our virtual battery solutions, offering more revenue to share among the program partners.
So how does this really work? Let’s say a REIT is located in a part of the US where electric water heaters are common and where the local electric utility desires storage to be added to the grid to balance the installation of a lot of solar panels. Packetized Energy would partner with the REIT to install smart thermostats, such as our Mello, to each unit’s water heater and install home scale batteries in the building’s basement. The REIT could complete the installation using their team of vendors who already service the units.
Once the fleet of devices is installed, Packetized Energy partners with the local utility to provide our Nimble virtual battery software to manage these water heaters and batteries as a single grid resource, a virtual battery. Nimble software empowers the utility to lower peak demand on the electric grid, optimize the costs of energy, and balance the frequency regulation on the electric grid. Regional wholesale energy markets, often ISOs or RTOs, or the local utility generate sufficient income from these grid and market services to share revenue with us and the REIT.
Overall, the cost of operating the electric grid is lower so all electricity users benefit; renters gain guaranteed quality of service even during peak events as well as the intangible benefits that drew them to the “green” unit in the first place; and, the REIT has happy renters, some new revenue, and increasing rental rates over time. This is why we are excited for the potential of virtual battery deployments with real estate partners.
We have just completed our first real estate partnership with Redstone, deploying over 20 Mello smart thermostats in their historic Winooski Block building in Winooski, Vermont. Redstone expressed their enthusiasm for the project saying, “the team at Packetized Energy crafted a well-thought-out game plan and worked efficiently to ensure a seamless and successful installation of the devices at the building. We are excited to work with groups like Packetized Energy to implement new technologies that support efficient uses of our precious resources.”