The Solar-Plus-Storage Revolution

Intermediate

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A large PV array with battery storage.
The PV industry got its start providing power in remote locations­—like in space and the backcountry. Both require energy storage.
The PV industry got its start providing power in remote locations­—like in space and the backcountry. Both require energy storage.
Large-scale facilities are often susceptible to peak demand charges, making energy storage a cost-effective addition to a PV system. Here, a Primus Power 250 kW and 1 MWh Primus EnergyPod are integrated with an existing 230 kW PV system. The combined microgrid system provides several functions, including reducing peak electrical demand typically experienced during weekday afternoons and providing power to critical military systems when grid power is not available.
A lithium-ion storage battery system by LG Chem. Residential systems can benefit from solar-plus-storage systems for many of the same reasons that a municipal utility or business can.
A residential nickel-iron storage battery by Iron Edison.
Battery systems aren’t just for balancing surges in supply and demand, but can help in times of no supply, too.
Kauai Island Utility Cooperative provides a good example of the advantages of energy storage. These systems store renewably generated energy from the island’s utility-scale and residential grid-tied PV systems, significantly reducing the need for diesel fuel.

PV systems were born out of a need for power in remote locations. As such, the PV industry established its roots in battery-based systems. Today, it is trending back toward that direction.

Decreasing module and battery prices; changing market dynamics; regional resiliency goals; and additional system benefits gained from residential, commercial, and utility-scale photovoltaic (PV) systems are spurring on the solar-plus-storage “revolution.”

The growth of the solar-plus-storage market is on an impressive trajectory. According to researchers from Greentech Media (GTM), the annual deployment of U.S.-based solar-plus-storage systems tripled—from 18 MW in 2015 to 47 MW in 2016. By 2022, annual solar-plus-storage installations are projected to exceed 1.4 GW.

Price Drops

Unsubsidized solar is now competitive with conventional power. In November 2017, Lazard, a financial advisory firm, released its 2017 figures comparing the levelized cost of energy (LCOE) of utility-scale PV systems with that from conventional fossil fuel and nuclear power generation. The low-end cost of electricity from utility-scale PV was $0.04 to $0.06 per kWh, depending on whether the location was sunnier or cloudier, versus $0.06 to $0.07 for coal or natural gas. The cost of electricity from utility-scale wind farms was $0.03 per kWh.

If you account for the federal tax subsidies (ITC and PTC), then LCOE pricing comes down to $0.035 for utility-scale PV-generated electricity and as low as $0.014 for wind-generated electricity. Costs rise when storage is added—the report stated that solar-plus-storage systems generate electricity at $0.082 cents per kWh (unsubsidized). If the storage is placed into service at the same time as the PV is installed, it too can qualify for the 30% tax credit, thus reducing the cost per kWh.

However, since those numbers were published, Xcel Energy released new pricing from bids for future energy generation in Colorado. Out of 87 bids, the median bid for solar plus storage was $0.036 per kWh. While there are some unknown details and these projects aren’t expected to go online until 2023, the news is compelling. The lowest previous contracted solar-plus-storage bid was in May 2017, for Tucson Electric Power (TEP) in Arizona at $0.045 per kWh.

While much of the news concerns utility-scale deployment, residential installations are also cost-competitive in some areas. A panel discussion at the GTM 2017 Energy Storage Summit noted that a residential solar-plus-storage system installed in California’s San Diego Gas & Electric, Pacific Gas & Electric, or Southern California Edison’s service territory can break even within seven years—even without the self-generation incentive program.

Comments (4)

MSCHMITZUSA's picture

It all makes sense, but the battery prices keep on exploding, because the Chinese consume more and more lead with their industry, driving up lead prices and the mining capacity does not increase. A golf cart deep cycle battery with 220Ah which used to be 50 USD does cost you now 140USD and I not even dare to think about industrial lead acid battery prices. Other battery technologies are great, but too expensive for the average Joe. Lithium Ion is even more expensive if not the most expensive battery and even Ni-Fe batteries for home solar are in the 10000USD plus range for a decent capacity battery bank. At one time I explored making hydrogen with my solar panels and storing that in tanks to use wit combustion engine generators or fuel cells, but that was out of reach as well. So I do not see any truth in the statement that energy storage is coming down in price at all. Sorry, but until somebody comes up with a battery you can make from scrap metal from the recycling bin and pool acid bought at home depot, the battery prices will keep on rising and they make up for more then 50% of the cost of a solar system in todays days!

Greg Smith_0_0's picture

There is plenty of truth in stating that lithium ion pricing is coming down- a quick search on the subject yields hundreds of thousands of articles explaining the pricing decline of these newer battery technologies. I guess "average Joe" is a subjective term since people put value on different things. To some average Joes, going into debt on a $50,000 car is acceptable, but they won't spend that much money on a solar+storage system because they think it is too expensive. Golf cart batteries are ok for some applications, but not viable for the type of storage that people need to really take advantage of their solar.

MSCHMITZUSA's picture

The golf cart battery was just an example, because most newbies to solar use those. I run the Rolls L16 type of battery in my off-grid system, because their industrial line was out of my financial reach. I do own a car which I bought for 3000USD and do not even own a flat screen tv or a smart phone. My house is wired like a boat running 12 and 24V Direct Current. I have a 300W Morningstar sinewave inverter to run my wife's Singer sewing machine and my 1960 Panasonic vacuum tube stereo system. All my other things are made for direct current like cloth iron, ceiling fan, refrigerator, freezer, water pump etc.

Greg Smith_0_0's picture

While the majority of our systems are being deployed for battery backup applications, certain parts of the country are starting to realize that self consumption and time of use operating modes are a valuable part of the storage system. I always tell our customers to put the unit in self consumption mode even if they only need the system for backup- take advantage of the 15,000 cycles and optimize the solar to maximize its usefulness. Use the sun at night everyday instead of only when the grid goes down. Win-win-win-win!

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