NREL: Solar-plus-storage could be competitive by 2020
Combining solar power and energy storage could be cost competitive with standalone solar PV installations by 2020 according to a new report from the National Renewable Energy Laboratory.
The findings are specific to a variety of circumstances, including how the storage system is coupled to the solar system and the overall degree of solar penetration.
- The system with the highest benefit-cost ratio in the current environment is a DC-coupled solar-plus-storage system that is charged only by solar power.
The NREL report underscores the market distortions associated with the investment tax credit for solar-plus-storage systems. The ITC currently is only available for energy storage systems that are charged mostly from renewable energy sources.
In the current environment, assuming about 6% solar penetration, it is more economic to give up revenue from load shifting in order to charge the system with solar power in order to qualify for the ITC.
The NREL study was modeled based on a facility in Southern California with a 50 MW fixed-tilt solar PV array tied to a 30 MW, 120 MWh storage system. If battery costs continue to decline, the benefit-cost ratio would likely increase, but as solar penetration rises, the benefit-cost ratio will decrease, the report found.
Higher solar penetration levels reduces solar revenues due to the reduced marginal value of solar energy. So at higher solar penetration levels, the benefit-cost ratio of solar power begins falls, but the benefit-cost ratio of combining solar with storage rises.
The benefits of standalone solar begin to wane at about 15% solar penetration. At 24% penetration any combination of solar-plus-storage beats standalone solar, even without the ITC.
One take-away from the study, Greentech Media noted, is that it would make sense to build solar-plus-storage facilities while the ITC is available so that the system will be in place when solar penetration rises.
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