The market for combining energy storage with solar power will be worth $8 billion globally by 2026, according to a new report from Lux Research.
As solar system costs continue to decline, Lux estimates that storage will boost the market for rooftop distributed solar by 25 GW per year.
The growth in solar installations will help drive down cost so that solar power will be prices at $1.87/watt by 2035, making the combination of solar and storage more economically attractive, the report argues.
As the penetration of grid-connected solar power increases, governments are reducing incentives and utilities are responding with rate changes and punitive policies that undercut the value of solar installations, creating an opportunity for partnerships between the solar power and the energy storage industries, analysts at Lux Research say in a new report.
“As the solar-plus-storage market matures, interesting developments will unfold on a number of fronts,” Cosmin Laslau, senior analyst and lead author of the report, said in a statement. “There will be more vertical integration between the two industries, increased financing options and even a move towards energy-sharing between communities,” he said.
Lux analysts expect distributed storage for solar systems will be worth $8 billion by 2026.
The first opportunities for combining solar and storage are likely to occur in markets where policy choices drive adoption. As a result of reductions in solar feed-in tariffs the Australian storage market is expected to hit 244 MW of annual installed capacity by 2020 from a base of 7 MW installed in 2015, according to a report from GTM Research.
And in Hawaii changes in net metering policies are hastening the adoption of energy storage to enhance the value of solar installations. In September 2015, SolarCity announced plans for a fully dispatchable solar + storage project on Kaua’i.
The Lux report sees cooperation between solar installers, battery suppliers, and system integrators taking shape in four use-cases: self-consumption, renewable smoothing, grid independence, and grid services.
The report cites existing collaborations between Stem and SunPower, Green Charge Networks and SunEdison, and between Sonnen and Sungevity. The report also identifies opportunities in three first-mover markets: California, Germany, and Japan.