Solar Novus Home

Solar Novus Blog


Residential solar energy storage is on the rise

The global market for grid-connected residential photovoltaic (PV) solar installations with energy storage is predicted to grow tenfold to reach more than 900MW in 2018, up from just 90MW in 2014, according to IHS Technology. That is tremendous growth, but with global installed PV capacity estimated at about 133GW in 2013, energy storage installation has to overcome many technical hurdles and market challenges before we see widespread adoption.

Fueling the growth that this market has recently experienced is a combination of things, not the least of which is falling prices. Sam Wilkinson, Associate Director for the Power and Energy Group at IHS and the author of the IHS research report said that he “absolutely expects battery prices to continue falling.” He attributes the cost drop mostly to falling prices of lithium-ion batteries, which will fall a further 35% through 2018. A number of countries are investing in R&D, which will bring advance battery technologies. The electric vehicle market is also helping to drive improvements in technology while driving down costs through economies of scale, Wilkinson noted.

Newer technologies are just getting traction and finding their sweet spot.

According to Dean Middleton, Senior Sales Director at Trojan Battery, “Newer technologies are just getting traction and finding their sweet spot.” He added that, “Some will leap forward we’ll see the most dramatic decreases in cost as they gain economies of scale.”  The greatest challenge in advancing storage products with new technologies is the level of uncertainty—it has to be proven as well as being cost effective. “We saw many new companies a few years back that are not on the map today.”

Market barriers

Cost has been the greatest barrier to adoption of energy storage in residential solar installations. But there is also the issue of safety. Flooded batteries, the least expensive battery type, require regular checking to make sure electrolyte levels are maintained and they must be properly vented because charging produces potentially explosive gases.

Residential solar energy storage from Sonnenbatterie

Other safety concerns are legitimate, such as electromagnetic radiation or the potential of fires, but the risk isn’t above and beyond risks involved in any electrical system, according to Middleton. “The key to safety is working with qualified local installers that are trained and certified by a trusted organization like NABCEP.”

Market opportunities

Costs can be prohibitive in integrating battery storage into PV installations, but it can be justified in certain situations. Self-consumption is the term for solar power installations that have energy storage, so the energy produced is used right where it is generated rather than sending it to the grid. Using intelligent energy management, the stored energy can be used when electricity is at peak rates or when the most electricity is being used in the home. While it is a great idea, the cost has been prohibitive for most residential users, however, that is slowly changing.

Wilkinson suggests consideration of several variables: should be considered the levels of self-consumption that can be achieved, and the development of retail electricity rates over the next 20 years. He added that, “The fact that these variables are impossible to ensure and so difficult to predict makes the investment relatively insecure and has further hampered end-user appetite for residential PV energy storage.”

In Japan there is a huge movement in the smart home industry and home energy management systems, where energy storage is paired with solar to build highly efficient, independent homes. 

The two main markets for energy storage in grid-connected residential PV are Germany and Japan. In fact, in Japan there is a strong market for lithium-ion storage in general, not necessarily for PV powered systems. This is because the grid is very unreliable and they have frequent blackouts, Wilkinson noted. Also in Japan there is a huge movement in the smart home industry and home energy management systems (HEMS), where energy storage is paired with solar to build highly efficient, independent homes. According to IHS analysis, Japan will see more than 200MW of PV energy storage in 2018, making it the largest market. And this is despite generous PV incentives that make PV self-consumption unattractive, Wilkinson said.

To determine whether it is economically wise to add energy storage to a residential PV system to increase self-consumption, Wilkinson said that there are three key variables: The value of feed-in tariff, the expense of buying electricity from the grid, and the cost of energy storage products.  “And all of these metrics are moving in the right direction,” Wilkinson commented. “IHS predicts that each of these key parameters will have moved to such an extent that PV systems with storage will begin to offer a greater return on  investment after 2016.”

Government incentives

Feed-in tariffs, net metering schemes, storage incentives and other forms of government support can make it attractive to generate solar energy and store it for use during energy peaks or in the case of power failure. In North America backup is currently the only driver for PV system owners to add energy storage to their systems. Where there is net metering, there is no difference between what you export and what you import, which doesn’t help to promote self-consumption. Australia, on the other hand, encourages storage with a sort of bonus that gives residents a greater savings if they store their solar power and use it in the evening during peak times.  Germany is an example of a country where, on sunny days, solar has provided half of the country’s electrical demand. While this is great from a sustainability standpoint, it cuts into the base load. “Germany has had instances where wholesale electricity prices in negative, paying people to take it away,” Wilkinson said.  This problem is not unique to Germany. Texas has had the same experience as a result of wind generation. Wilkinson said, “The long term vision is to have batteries behind the meter, which would be aggregated so a single entity would have control over the batteries, operating them in a way that benefits the grid.”

Real-world energy storage solutions

Many solar energy storage systems are currently on the market or soon to become available. Reposit Power, an Australian company, offers the GridCredit storage system that includes software that monitors a home’s energy use and then intelligently sells power back to the grid, automatically connecting the home to the energy market. Sonnenbatterie, based in Germany, has a residential energy storage solution that includes lithium-iron-phosphate batteries in an enclosure that includes an inverter, electronics, application control and a display. SunPower and Sunverge will be releasing a system in early 2015 that integrates SunPower’s solar energy system with Sunverge’s energy storage solutions for residential and utility customers in the US and Australia.

GS Battery system

GS Battery's storage system (shown here) includes batteries, inverter, charge controller, cooling system—plus a car charger. In the second half of 2015, Enphase Energy will release the AC Battery and Enphase Energy Management system for residential solar energy storage. Enphase is using batteries manufactured by Japanese manufacturer, Eliiy Power, which are based on olivine-type lithium iron phosphate.

Expect more announcements of partnerships between battery manufacturers, power electronics specialists and solar providers on integrated storage solutions. Residential solar energy users are driven to add storage by government subsidies, the attractiveness of self-consumption, and also by increasing interest in simply becoming independent from the grid. The opportunity has never been better for companies with innovative energy storage solutions.

Written by Anne Fischer, Managing Editor, Solar Novus Today

Labels: energy storage,lithium ion,Trojan Battery,IHS Research,GS Battery,SunPower,Sunverge,Eliiy,Reposit Power,Sonnenbatterie,Enphase

Back Back to Features

Innovative Solar Products

Copyright © 2020 Novus Media Today Group, LLC. All rights reserved. Website design and build by MM Design.