Global distributed storage for solar systems will be worth US$8 billion in 2026, according to American consultancy Lux Research.
Lux Research is a Boston-based independent research and advisory firm, providing strategic advice and ongoing intelligence on emerging technologies – many of which fall into the renewable energy sphere. Its findings are often referred to by businesses, finance firms and different levels of government in the US.
In a report titled Helping Renewables Shine On: Analysing the New Business Case Where Batteries Make Sense for Solar Systems, Lux Research said the plummeting costs of solar systems will offset the cost of adding storage – culminating in an attractive economic case for solar and storage by 2023.
Lux Research said adding storage increases costs – affecting revenue streams and addressable market size – but as solar system costs decline in the US from US$3.85/W in 2015 to US$1.87/W in 2035, a tangible business case for storage will begin to emerge in 2023. More information on the parameters of the modelling that Lux used is outlined in the report, although it is only available to paid subscribers.
“Energy storage in the form of batteries is a natural extension to solar installations, but have remained sidelined due to high costs. Meanwhile, supportive policies have enabled the business case for distributed solar systems, promoting energy independence for homeowners and businesses,” the company said
“However as the penetration of solar resources has increased on the grid, governments are reducing incentive levels while utilities are responding with a mix of open hostility and reluctant acceptance.”
Good news for the market, according to Lux Research, is that the momentum is just beginning to build – although the pure investment case for solar-plus-storage systems won’t be present for some years to come.
Lux Research has articulated three trends in the new solar-plus-storage market:
- Solar-storage partnerships have begun to emerge
- International partnerships between Stem and SunPower, Green Charge Networks and SunEdison, and Sonnen and Sungevity are a sign of things to come. Software is a key differentiator.
- Global market leaders like SolarCity 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 analyse weather data to optimise solar consumption and storage. On the local front, Enphase chose Australia as the global launchpad of its energy management system
Policy support has big impact. Thanks to policy certainty, Germany has installed 12,000 solar-plus-batteries systems since 2013, with a recent growth rate of 35 per cent in installed solar plus storage. Japan has launched a subsidy program to cover two thirds of the installation costs for lithium-ion battery systems at 1 kWh or largest, while California offers a US$1.46/W incentive and mandates utilities to install 1.3 GW of storage by 2020
Lux Research said it had found increased activity among existing solar installers, battery suppliers and system integrators globally, which is beginning to shape four distinct consumer use-cases – self consumption, renewable smoothing, grid independence and grid services.