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Distributed Storage For Solar Systems To Be Worth $8 Billion In 2026

Distributed storage for solar systems is expected to be worth $8 billion in 2026 according to new analysis from Lux Research.

According to intelligence firm Lux Research, the market for distributed storage for solar systems will be worth $8 billion in 2026, “as solar combines with storage in order to continue its remarkable growth.” Specifically, as many have already concluded, energy storage combined with solar systems is believed to be an integral partnership if solar is to overcome its inherent constraints — such as intermittency and the lack of power after dark.

Lux Research predicts that energy storage will increase the distributed solar market by 25 GW annually in 2026.

Furthermore, the need for adding storage will add costs to solar, affecting revenue streams and addressable market size. Nevertheless, Lux Research believes that solar system costs will continue to decline, from $3.83/W in 2015 to $1.87/W in 2035, creating “an attractive economic case” in 2023, “leading to strong growth.”

“As the solar-plus-storage market matures, interesting developments will unfold on a number of fronts. There will be more vertical integration between the two industries, increased financing options and even a move towards energy-sharing between communities,” said Cosmin Laslau, Lux Research Senior Analyst and lead author of the report.

The report, Helping Renewables Shine On: Analyzing the New Business Cases Where Batteries Make Sense for Solar Systems, studied the impact storage will have on distributed solar. Some of the reports’ key findings include:

  • Solar-storage partnerships begin to emerge. Partnerships between Stem and SunPower, Green Charge Networks and SunEdison, and Sonnen and Sungevity reveal the industry’s future. First Solar even joined a $50 million investment in Younicos, a leader in grid-scale energy storage integration.
  • Software is a key differentiator. Leaders like SolarCity and others are offering demand management software that can help integrate storage. Sunverge’s system can link to smart devices and electric vehicles, while Sonnenbatterie’s software can analyze weather data to optimize solar consumption and storage.
  • Policy support has big impact. Thanks to policy support, Germany has installed 12,000 solar-plus-batteries systems since 2013 with a recent growth rate of 35%. Japan has launched a subsidy program to cover two-thirds of the installation costs for lithium-ion battery systems at 1kWh or larger, while California offers a $1.46/W incentive — and mandates utilities to install 1.3 GW of storage by 2020.
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