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As Solar Costs Drop, Energy Storage Solutions Take Center Stage

Energy storage has emerged as the next big opportunity for the solar industry. With significant improvements in PV technology and new balance-of-system innovations, the solar industry has dramatically reduced both commercial and residential solar system costs in the last year — leading to a substantial increase in the amount of solar connected to the grid in the U.S. The U.S. solar industry achieved impressive growth in 2012, and there is no slowdown in sight. In 2013, EuPD Research projects that the U.S. will add approximately 3.9 GW of new solar capacity and continue robust installation rates for both residential and utility-scale PV systems.

However solar energy, as well as wind energy, relies on an intermittent energy source and output fluctuates based on weather conditions. This presents several challenges for utilities, independent power producers and solar project developers alike. First, variable power generation limits the utility applications of solar technology, as customers demand energy access 24 hours a day — not merely when the sun is shining. Secondly, the U.S. power grid is not yet well equipped to handle surges or quick declines in power demand leaving many utilities unsure about solar's impact on the grid. 

Commercialized energy storage solutions solve these problems and will play a pivotal role in ensuring the solar market’s continued growth. The more solar that is integrated into the grid, the greater the need for energy storage solutions because it improves the quality and reliability of the renewable energy solar supply, and eases the integration of solar systems. Further, energy storage transforms PV plants into controllable power systems that can meet demand at all times of the day. Recent technology developments, coupled with favorable policies and support schemes, are accelerating the widespread adoption of energy storage, which in the U.S. could reach 4 GW by 2016.

Many of these innovations were displayed this summer at Intersolar North America in a special exhibition segment on energy storage, and industry leaders gathered to discuss incentive programs and the market landscape during four conference sessions dedicated to the topic.

Editor's note: Watch Elsaesser discuss energy storage at Intersolar North America below, and click here to view all Renewable Energy World video coverage of the event:

Benefits to Storage

With storage solutions, grid operators are able to more aptly manage grid output. Over-generation risk is mitigated, moment-to-moment fluctuations in power can be regulated, and grid operators can earn more revenue by self-scheduling.  Globally, more energy can be sourced from renewable sources, if power plant operators and grid managers are better able to control that output through storage solutions.

Current Solutions

There are five different types of energy storage on the market: electrochemical such as batteries or flow batteries; mechanical such as compressed air energy storage, flywheel energy storage or hydraulic accumulators; electrical such as a capacitor; chemical/power to gas like hydrogen fuels cells; and thermal which includes molten salt, seasonal thermal store and PCM storage systems.

The vast majority of energy storage today — 89 percent — is comprised of pumped hydro. The second most utilized technology solution is batteries, followed by thermal storage such as molten salt, which is heavily used in concentrating solar thermal power plants (CSP). Though siting and permitting can present challenges for pumped hydro, because of the lengthy environmental assessment process, there is a growing interest in expanding the reach of this solution, according to EuPD Research.

Storage solutions are typically tailored to specific solar systems. Molten salt and thermal storage systems work well for power plants that generate steam, such as CSP facilities, while lithium-ion battery technologies have proven useful for home PV systems. Li-ion batteries are also being considered, more and more, for utility grid-support applications, such as community energy storage, commercial end user management and frequency regulation. For example, the California ISO is served by a 2-MW A123 System’s battery. EUPD reports that stationary markets for Li-ion batteries could exceed those for transportation.

Policy Progress

In order to propel the storage industry forward, public support is essential. In the United States, California leads the way, both in terms of favorable state legislation and incentives, as well as in terms of companies developing innovative solutions. In 2010, Governor Arnold Schwarzenegger signed AB2514, which mandates the implementation of utility-scale energy storage. This year the California Public Utilities Commission began execution of that law, determining viable procurement targets for each load-serving entity in the state. Under this law, Southern California Edison is required to procure 50 MW of new energy storage capacity. Additional capacity requirements will be established by 2015 and again in 2020.

In Hawaii, the Kauai Island Utility Cooperative (KIUC) is making storage a priority. It plans to install 1.2 MW of battery systems to help support its goal of reaching 50 percent renewable energy generation by 2013. The current system slated for installation is on the forefront of advancements in technology and can compensate for very rapid changes in output, including micro-second fluctuations.

The U.S. federal government has also shown considerable support for the sector, initiating a Pay for Performance proposal at the Federal Energy Regulatory Commission (FERC) and passing both the Federal Energy Storage Act of 2009 and energy storage provisions in the American Recovery and Reinvestment Act of 2009.

The U.S. Department of Energy is an enormous customer of new energy storage technologies, particularly compressed air storage, adding over 537 MW of storage to the nation’s grid. The Advanced Research Projects Agency – Energy (ARPA-E), a division of the DOE, has an annual budget of $180 million aimed to fund technologies that improve energy efficiency, reduce emissions outputs and hasten the deployment of other advanced technologies. Energy storage research and implementation receives much of this funding. The DOE also works with Sandia National Laboratories in the Energy Storage Technology Advancement Partnership to foster new storage technologies, as well as Argonne National Laboratory (ANL). In March, ANL announced plans to award up to $120 million over the next five years to next-generation storage technologies.

Disruptive Technology

Innovations are taking hold in each storage technology class, from chemical to thermal to mechanical to gravitational. One company that recently received high-profile investment is Aquion Energy, who is commercializing a water-based battery system technology for large and small scale, including micro-grid and off-grid, applications.

Additionally, storage solutions for CSP have enabled great growth in this sector in the last year. Two large projects, the 280 MW Solana system and a 110 MW Crescent Dunes system have incorporated molten salt solutions. Other providers with different types of storage technologies and solutions include S&C Electric Company, Princeton Power Systems, Trojan Battery, AEG Power Solutions, BSB Power Company Limited, MK Battery, Outback Power, Green Charge Networks, IKR Energy Corporation, SOLARIS Engineering, JEMA Technologies, and CBC Co. Ltd. Visitors of Intersolar North America 2013 can see these companies and the technologies of many others firsthand in the special energy storage exhibition segment.

For the solar industry to continue making gains in the global energy portfolio, energy storage solutions must continue to advance. Just as PV technologies improvements led to a significant drop in total solar system costs and a dramatic jump in U.S. installations, further improvements in storage technologies will open up opportunity for the solar industry to expand and meet more of our energy needs.

Read more opinion-commentary here.

Lead image: Spotlights via Shutterstock

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