Falling battery energy storage prices support faster renewables adoption and help them become a more reliable source of power.
Is more widespread adoption of renewable energy at scale just around the corner? Many people in the industry see it as inevitable, though projected timeframes vary widely. The intermittent nature of wind and solar energy is one often-cited factor constraining wider adoption. Solar and wind provide varied output depending on geography, climate, weather and time of day. This is one of many reasons why we are still seeing deployment of non-renewable resources in addition to renewable resources across the nation.
Battery energy storage currently offers the most likely and appealing solution to this problem, and today we are beginning to see more affordable, efficient energy storage systems on the market. A new chapter in the story of clean energy has begun.
The rise of the energy storage market
The beginnings of energy storage date back to the 1880s. Until recently, the only viable storage technology was pumped storage of energy derived from hydroelectricity. Pumped storage involves using energy during periods of low energy demand to pump water from a lower-elevation reservoir to a higher-elevation reservoir and store it until periods of high energy demand, when the water is released to flow through turbines and generate energy. Today, about 95% of utility-scale energy storage still comes from pumped storage1, yet hydropower growth is limited by factors such as the finite number of water reservoirs available and increasing drought. The technology for storing solar and wind energy took a while to bring to the market. (See how solar + storage works.) Just a decade ago, there were few affordable options.
Today, thanks to technological advances and market forces, energy storage is developing faster than ever, with global growth of 6 gigawatt hours (GWh) of added capacity in 2018, exceeding the previous year by 147%2. According to energy consultant Wood Mackenzie3, global storage capacity in 2024 is likely to be 13 times greater than today.
The trend is driven by a drop in costs, which have fallen by 85% since 2010 and 35% in 2018 alone, according to Bloomberg New Energy Finance (NEF)4. However, despite optimism and recent advancements, residential battery energy storage is still finding its way in the market, with prices rising to make profits on skyrocketing demand5.
Combined with the exponential growth of the solar and wind markets, energy storage makes possible the next breakthrough in renewables adoption, and current trends show it may already be making an impact. Solar continues to make great strides in the U.S. despite vanishing government support and rising tariffs on solar imports6. In the first quarter of 2019, 2.7 gigawatts (GW) of solar photovoltaic (PV) capacity were installed—a 10% increase year-over-year and the strongest first-quarter in the industry’s history7. While this statistic cannot be directly linked to the growth of the storage market, it is clear the two are highly complementary technologies. The Solar Energy Industries Association (SEIA) estimates that, by 2023, roughly 20% of non-residential solar PV installations will come from combined solar plus storage projects.8
Solar plus storage rewrites the rules
The solar plus storage combination is increasingly one of the best bets on the market, which means that renewable energy systems should be designed and developed – if not already – with battery energy storage in mind.
This approach is being explored and adapted to meet the utility-scale deployment requirements of balancing demand during peak loads, making it possible for renewables to shift toward more of a dispatchable energy source, available on demand at the request of power grid operators. The market for utility-scale applications has been growing steadily every year since 2011, with noticeable transition from early adopters to the broader market in 2018. This year might be the best in history for annual combined solar plus storage growth in capacity9. By 2040 this energy technology pair are expected to attract some $620 billion in investment, according to Bloomberg NEF10.
From niches to the masses
Throughout the U.S. there are steps being taken to increase solar energy storage capacity.
In the Northeast, in late April 2019, New York Governor Andrew Cuomo announced $280 million for energy storage development in conjunction with the state’s ambitious agenda aimed at 100% clean and zero-carbon energy by 204011.
The New York State Energy Research and Development Authority’s President and CEO Alicia Barton commented on the move12: “As more renewable energy resources [come] online, energy storage will enhance the efficiency of the electric grid to better integrate these variable resources and provide New Yorker’s [sic] with a cleaner, more reliable energy system.”
Momentum in solar energy storage capacity is not only growing in New York. California has developed its own Energy Storage Roadmap, and a number of other states have also made ambitious energy storage commitments.13 Here in Georgia, Georgia Power Company may soon be granted authority “…to develop, own and operate energy storage demonstration projects totaling up to 80 MW”14 as part of its 2019 Integrated Resource Plan. Meanwhile, a dozen states are considering ambitious renewable energy goals15, while the U.S. Energy Storage Association has just launched a new Energy Storage Incentives Guide for policymakers. Thanks to the growing availability of information on the best energy storage options16 and cost estimates17, consumers can also learn how to obtain energy storage as well.
In Georgia, the storage industry continues to grow as a powerful complement to the state’s solar industry. Early in 2019, Southface Institute updated GeorgiaEnergyData.org – which includes the most comprehensive map of solar installations in the state – to include storage installations on its solar map and dashboards. This tool and visual reference will continue to track solar energy battery storage as it begins to make its mark in the Southeast.
Despite challenges, the future is bright
It may be a game-changer, but battery energy storage is not yet a game-winner, even as it has continued to gain leverage as a viable option that unlocks massive opportunities for further innovation and change.
According to Steve McKenery, former Vice President, Energy Storage Solutions at solar developer 8minuteenergy Renewables, the increasing affordability of energy storage might mean that “many states would never build another gas plant”18. Energy storage is stimulating whole-energy system innovation and making clean energy more affordable.
For the transition to renewable energy to continue to be successful, there is still much work to be done including evolving the energy grid, making significant changes in energy policy to incentivize battery energy storage deployment, continuing to explore a diverse array of battery energy storage technologies and use cases, and accelerating adoption of new energy habits. Still, the incredible advancements of battery storage provide one more reason to believe that the transition to a sustainable energy future is truly possible.
1: Pumped-Storage Hydropower
2: The Solar Singularity: 2019 Update (Part 1)
3: Global Energy Storage to Hit 158 Gigawatt-Hours by 2024, Led by US and China
4,5: Battery-Backed Solar Breaks Into Grid Long Seen Off Limits
6: Trump’s solar tariffs haven’t stopped America’s switch to solar
7, 8: Solar Market Insight Report 2019 Q2
9: 5 Predictions for the Global Energy Storage Market in 2019
10: The Battery Boom Will Draw $620 Billion in Investment by 2040
11, 12: Governor Cuomo Announces 280 Million Available for Energy Storage Projects to Combat Climate Change
13: Fact Sheet: Energy Storage
14: Georgia Public Service Commission Docket #42310, Georgia Power Company’s 2019 Integrated Resource Plan – 2019 IRP Stipulation
15: These dozen states could move to 100% renewable electricity
16: How to choose the best battery for a solar energy system
17: Is solar battery storage worth it given current solar battery cost?
18: McCrone: In Energy, Even The Incumbents Say “Viva La Revolucion!”