US Solar + Storage Market To Go Beyond $1 Billion A Year By 2018
Originally published on Solar Love.
SunPower and Sunverge just announced a big solar+storage partnership, which follows a partnership between SolarCity and Tesla as well as the announcement of several energy storage companies beginning to hit the market. If you thought solar power was disruptive (it is), wait until solar + storage beat the price of grid electricity.
I’d say that future isn’t going to be the norm in a few years, but it also is not too far out. And it’s really a gradual transformation, where solar+storage makes sense for certain people and businesses first, and then others, and then others… until, presumably, it makes more sense for the masses. All along the way, we will see growth. A new report estimates that the annual US solar+storage market will rise from $42 million in 2014 to over $1 billion in 2018, a tremendous increase.
By that time, it is expected that 10% of commercial solar customers will also utilize energy storage systems.
US Solar+Storage Annual Market Size Forecast
The report, released moments ago by GTM Research, expects that the US will install 328 MW of behind-the-meter energy storage by 2018 (in cumulative terms).
The Future of Solar-Plus-Storage in the US identifies key drivers of the growth as the falling costs of solar power, the falling costs of batteries, changes to net metering policies in certain states, California’s energy storage mandate and other state incentives, Tesla’s coming Gigafactory, and the need for greater grid resiliency.
“However, significant barriers do remain. While the cost for lithium-ion storage is falling by 20 percent to 30 percent annually, the price point for both lithium-ion and other technologies is still high. Additionally, the report expresses concern about the ability of solar-plus-storage to participate in multiple use cases such as demand response and ancillary services,” a GTM Research press release stated.
“Currently, only PJM and a handful of other pilot programs allow the participation of aggregated solar-plus-storage in wholesale markets or for grid services,” said Senior Energy Storage Analyst and report author Ravi Manghani.
Some key findings from the report include:
- Behind-the-meter solar-plus-storage in the U.S. will be a 169 MW market in 2018
- The annual market value in dollars will grow from $42 million in 2014 to more than $1 billion by 2018
- California will have the largest market share of solar-plus-storage through 2018, largely due to the fact that it will continue to be the biggest behind-the-meter solar market
- For a typical commercial end customer, solar-plus-storage systems can provide electricity bill savings of 20% to 30%, resulting in returns (IRR) of 16%-23% for 2014 installations.
- Solar-plus-storage economics for residential customers are less attractive compared to commercial customers, with returns (IRR) of 6%-14% for 2014 installations.
- Solar-plus-storage penetration for commercial customers is set to grow from 1% in 2014 to 11% by 2018.
For more information, you have to drop down the cash to purchase the report.
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When the utilities and the energy politics about it start to get hostile towards residential solar PV, there would be an accelerated adoption of residential battery storage, and such a market could even surpass the projected demand for battery energy storage.
I for one is waiting on the secondary market of used EV batteries or the drop in price of residential battery storage to less than $100/kWh storage.
There will be pre-emptive lobbying of utilities against residential battery storage to protect their turf. Some solar PV lease agreements already included clauses against the installation of battery energy storage. Oh, the greed for profits!
Better presentation of the math of battery storage needs to appear. Like the stickers on refrigerators “this appliance uses 328 kWh per year”. There, easy to understand. Batteries at present are not consumer friendly. They need to say “the lifetime cost per kwh of this battery is 10 cents”.
By the way I have been pleasantly surprised by the appearance in the stores of the Aquion salt water batteries. Amazing how they snuck up on us. They vastly put perform lead acid. Get this: 3000 cycles to 100% Before declining. That is equivalent to top quality lithium ferrous (lifepo4). They are made from benign materials ….you could eat them without harm ( not tasty though). They won’t appear in EV’s because they are heavy but perfect for stationary residential and commercial solar storage. About $500 per kw. Available at the AltE on line store. Anybody tried them? I am calculating about 10 cents kwh lifecycle at 5000. Could be even greater than 5000.
For comparison here’s what I’m now using –
12 Trojan T-105 RE batteries $2,050
16.2 kWh total storage
3.24 kWh usable storage at 20% discharge
4,000 cycles at 80% DoD
$633/kW (usable)
$0.16/kWh
Aquion $500/kW. At 3,000 cycles that’s $0.17/kWh.
(I’m not following your 5,000 cycles if the batteries are listed at 3,000.)
Bob, 3000 cycles to 100% degree of discharge, before they begin to decline. They don’t say how many partial cycles left. I presume they have thousands of remaining cycles to 90%, 80% ….50% etc. just as lead acid and lithium also have many partial cycles remaining after their pristine cycle capacity has passed. Particularly in solar residential applications full capacity is not important as long as they get you through the night. For EV’s it is different since you need the full voltage and power production for performance of the car.
(I believe, once again, a very important battery breakthrough has arrived with these Aquion batteries. Love to hear from anyone actually using them)
Update about Aquion batteries. Real Goods sells them and has a working 60kwh battery installed in an off grid ranch in Californiea with a 14kwh PV array. They have a complete pdf on it to download gives pricing and estimates vs lead acid vs diesel etc. A treasure house of information. Real Goods is the granddaddy of solar living. Reliable.
Update on Real Goods.
John Schaeffer has purchased the company back from the corporation that was letting it deteriorate. He is in the process of bringing back the company.
I got my start in solar from a workshop John put on in Berkeley about 25 years ago.
John got his start by commuting to work from a cabin which had no electricity. At first he tapped into his VW van (IIRC) battery to run a light or two. That sent him looking for a better solution.
For the first few years Real Goods was the mother ship. Their Solar Handbook was the bible for many of us putting our first systems together.
Ha, great bit of history. Little did we skulking cabin dwellers imagine that our lifestyles might influence the main stream. My big fat solar handbook sits on the shelf, my how prices have fallen. I believe it was John Schaeffer who built himself an amazing place in the forest after he got a bit of dough…there was a nice YouTube video of it a few years back.
I guess that why it is impossible to find out simple facts on how long batteries will last is that no one really knows it well. Because we have not seen them performing in real world applications over extended periods because technology is so new and laboratory simulations can tell only so much on the real world performance.
Battery storage economics is hideously hairy calculations that has multiple variables that are not known well enough. Therefore we cannot predict exact life-cycle costs, but any cost estimates contain at least 30 % error margins. And this is of course problematic if you are investing on battery storage and are expecting 7 % return for invested capital!
There is a problem in that manufacturers can do accelerated cycling tests but those tests may not match real world conditions closely. It may take a generation or two before life cycles are nailed down.
I think it was someone at GM that made an offhand statement about their batteries lasting better than anticipated.
my hunch is also that batteries in general are doing better than expected in real life conditions. Even so much better that actually we have probably already reached the parity with battery storage, but markets are few years behind what technology today could allow.
Remember the resistance to the Prius ” the batteries won’t last, they’ll be expensive and you will have replace them every 6 months”. Recently read a news story on a 2003 Prius taxi in Vancouver that had 1.5 million kms on it without having replaced the battery. So much for the naysayers!
Did it mention how well the battery was doing? Is it at 90% of original? 80? That would be interesting to know.
When people and companies are starting to install seriously roof-top solar panels + storage, this means that the revenue stream of utilities is dramatically reduced. As utilities cannot cut the costs of grid infrastructure this leads inevitably that the price of grid electricity will go through the roof. And this of course makes the economics of roof-top solar panels + storage more attractive even for households.
Anyone know how to submit a link of interest to Cleantechnia? Here’s what i want to submit http://www.bbc.co.uk/news/business-30518649
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