The World's #1 Renewable Energy Network for News, Information, and Companies.

Solar Storage Market Set for Rapid Growth

News that Germany plans to launch a €50 million solar storage incentive is the latest indicator that solar storage's time has come.

Under the program, German owners of solar systems with storage will be entitled to a low-interest loan from KfW, the state-owned bank, and a repayment allowance from the Ministry of Environment, which will cover 30 percent of the battery system's cost. The program will apply to newly-installed PV facilities with storage and solar plants with storage systems installed after December 31, 2012. Systems under 30 kW will be eligible for the subsidy.

Although lack of emissions trading revenue for the Energy and Climate Fund is said to be currently delaying the program, it is predicted that it will soon move forward, possibly by the originally specified date of 1 May.

This incentive will make almost any emerging energy storage technology capable of tying into a PV array cost-effective, according to Brian Warshay of Lux Research. Subsidizing a storage system's energy capacity rather than its power capacity, as does California's Self Generation Incentive Program (SGIP), is a more logical approach, says Warshay, because the solar shifting application requires more energy than power. Germany's incentive will benefit technologies capable of longer discharge duration such as molten salt and flow batteries rather than most lithium-ion batteries, Warshay said.

Research firm NanoMarkets believes the growth of the solar storage market is driven by declining costs for PV modules and reductions in government support for solar power. Without attractive subsidies, self-consumption can be more valuable than selling power and storage becomes desirable. NanoMarkets predicts that demand for storage in the residential and commercial sectors will soon show rapid growth.

A Growing Need

According to IMS Research's recent survey of over 400 purchasers of PV inverters including distributors, installers, integrators, EPCs and wholesalers, the need for energy storage in solar systems is growing fast. Although energy storage is still a young market, nearly one third of respondents said they expect to be using storage in over 40 percent of the PV systems they install by 2015.

Survey respondents from Germany, Italy and the UK identified energy storage as more critical than any other requirement for future PV inverters. When IMS asked what the main driver for the adoption of energy storage would be, the most common response was a reduction in battery prices helping to drive system prices down and make storage financially viable.

IMS found that over 60 percent of respondents believed that an acceptable increase in system price for the inclusion of energy storage would be between 10 percent and 29 percent; however, almost 30 percent of respondents indicated they would be willing to pay even more.

Grid Benefit

According to the 2013 Storage Study from the Fraunhofer Institute, carried out for German solar trade body BSW-Solar, battery storage systems used in conjunction with a PV system can increase the absorption capacity of existing power grids by up to 66 percent.

“The positive effects that decentralized photovoltaic battery systems have on the power grid cannot be overstated,” said Dr Christof Wittwer, head of the Intelligent Energy Systems department at the Fraunhofer Institute for Solar Energy Systems.

“The success of the Energiewende depends on the use of solar batteries as grid-assistive short-term storage capability,” said Jörg Mayer, managing director of the German Solar Industry Association. “What we need now is the initial spark for the development of decentralized battery storage systems, so that we can quickly achieve progress in terms of technology, and above all in terms of costs. With an increasing production of batteries, solar storage systems will quickly come down in price, thus enabling savings in grid expansion.”

Move Fast

Nanomarkets' report entitled Storage 2013 predicts that the global market for solar storage systems will be worth US$2 billion by 2018. Dr. Eicke Weber, head of the newly-established German Energy Storage Association, has called this a “conservative estimate”. Italian energy consultancy BIP said the battery market will reach at least 9 GW of capacity by 2020 from today's 270 MW.

And the commercial sector's uptake is growing in line with the residential sector's. Nicola Cosciani, head of energy storage at Italian industrial battery maker Fiamm, says heavy power users such as cement and steel makers are looking at solar storage. “Germany and Italy will be explosive markets for residential storage and big energy users are also starting to show an interest. This is a game changer,” he said in a Reuters interview.

When implemented, Germany's incentive will result in a short but rapid boom in distributed storage, Warshay predicts. “Developers with any hopes of addressing this market opportunity will need to move quickly into Germany to establish partnerships that will help decipher the bureaucratic requirements necessary to benefit from this new policy,” he said.

Technology growth

Considerable technological innovation is expected in energy storage, yet traditional lead-acid batteries will be the main revenue generator over the next decade, accounting for more than $950 million in revenues in 2018, research firm Global Information (GI)'s Solar Storage 2013 report has found. Lead-carbon technology will improve the margins on this type of battery, generating another $135 million by 2018, the report said.

There is also growing interest in the use of lithium batteries in the solar sector; GI expects these batteries to generate $235 million by 2018. Chinese solar energy storage firms seem likely to focus on lithium batteries since China is a major source of lithium.

RELATED ARTICLES

Solar panels

New Tool Helps Utilities Manage the Rapidly Growing Community Solar Market

Vince Font, Contributing Editor Community solar projects are among the fastest growing solar segments in the U.S with some estimates forecasting that community solar initiatives will be responsible for the addition of 500 MW (megawatts) of annual capacity...
Pope Francis

A 9-Minute Guide To Pope Francis’ Encyclical on Climate Change

Jim Lane, Biofuels Digest Pope Francis issued Laudato si’ (Praise Be to You) On the care for our common home, his second encyclical, concerning Catholic doctrine with respect to climate change, consumerism, and development.

Intersolar Europe 2015: Spirits Up, Stats Down

William P. Hirshman, Contributor Intersolar Europe, billed at the world’s leading exhibition for the solar industry, is indeed big. But Intersolar Europe 2015, one of five Intersolar-branded gatherings around the globe each year, was not as large as the an...
US Capitol

Republicans and Democrats Back Bill to Level the Playing Field for Renewable Energy

Vince Font, Contributing Editor U.S. Senators Chris Coons and Jerry Moran are leading a bipartisan effort to reintroduce tax code legislation aimed at leveling the playing field for renewable energy investment. The Master Limited Partnerships Parity Act w...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 3
1505REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

NFMT Orlando

NFMT Orlando is a trade show and educational conference for facility pro...

Green Sports Alliance Summit

The annual Green Sports Alliance Summit is the world’s largest and...

SAP for Utilities

The SAP for Utilities conference is the most comprehensive SAP for Utili...

COMPANY BLOGS

Five Ways GreenLancer Creates High Quality Solar Designs

High quality solar designs don’t have to take weeks to get back to...

More Middle-Class Massachusetts Residents Are Going Solar

Massachusetts is known for the Pilgrims, Boston cream pie and its excell...

Harnessing Emotions

Think about how you interact with your prospects. Are you going from the...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS