Large energy storage projects have headlined most news in the storage sector.
Enabled by falling battery prices, heralded as essential to renewables and mandated by progressive regulators, utility-scale storage projects have been widely viewed as the key technology which will help bring the nation's utility grid into the 21st century.
In fact, the market for larger, utility-scale projects is expected to grow at a startling clip in the next decade – with global revenues anticipated expected to rise from just $460 million to more than $8 billion by 2024, according to analysis by Frost & Sullivan.
But amid all the hullabaloo surrounding larger deployments, a smaller segment has been gaining steam and could have an even larger impact on the grid. Residential storage, once the stuff of expensive pipe dreams, has gone from feasible to home feature, with developers bringing out a range of products and offerings. Many are tied to home solar systems, but there is also growing interest in stand-alone storage for battery backup, aggregation and demand response.
In fact, Navigant Research earlier this year pegged the distributed energy storage system as an area of startling growth, with annual revenues expected to rise from $450 million last year more than $16.5 billion in 2024.
Calling it “one of the fastest-growing markets for energy storage,” Navigant's analysis said “in particular, residential and commercial energy storage has far exceeded industry expectations for growth and market volume.”
“Partnerships are flourishing in the North American residential solar-plus-storage market, and it’s becoming increasingly exciting,” said Omar Saadeh, a senior analyst at Greentech Media.
"The barrier to this market has long been the high cost of the batteries," he said. But new business models and leasing strategies, combined with the falling cost of storage, "are creating new options for advanced home energy systems."
The biggest residential growth area right now is solar systems paired with storage, allowing customers to store excess power for later use, and potentially participate in demand response or grid services programs.
"Increasingly more residential solar players have identified opportunities to expand into the home through a combination of energy storage, electric-vehicle charging, and home energy management system applications," Saadeh said.
That's an evolutionary skip from past partnerships, Saadeh said, which were based around more mature technologies like smart thermostats or energy gateways. The new slate of grid-connected, interconnected energy devices may be small now, but "players have indicated larger-scale ambitions in the next few years."
Perhaps the highest-profile is SolarCity, the nation's largest solar installer, which earlier this year partnered with Tesla Motors to roll out a rooftop solar-battery combo. Starting with new customers, SolarCity has begun offering a battery backup service that includes all permitting and installation. The system will use Tesla's Powerwall, available in 10 kWh and 7 kWh capacities, and will utilize a "time of use energy-shifting algorithm," according to the company.
At about the same time, Sungevity announced its own partnership with European storage provider Sonnenbatterie, to offer smart energy storage systems to its network of customers. The companies touted load shifting capabilities, sleek design and reliability, with Sungevity Chief Product Officer Peter Graf calling the battery storage modules "a compelling extension of our solar energy system."
Greentech's Saadeh said that "solar players have been bullish on residential storage opportunities for both homeowners," in addition to utilities, especially as solar energy gains broader acceptance.
Microinverter specialist Enphase Energy announced its energy storage offering about a year ago, a modular, plug-and-play system that would be fully integrated with the just-introduced Enphase Energy Management System.
The Enphase AC battery will provide 1.2 kWh of energy storage, is scalable and easy to install, and can be monitored with the company's software interface. And just last week Enphase in a filing with the U.S. Securities and Exchange Commission said it had inked a six-year deal with Japan's Eliiy Power to develop the batteries. The company is rolling out storage solutions to Australia, where it has a strong presence, as well as the United States next year.
While the overall market for storage additions to solar systems appears poised for growth, Saadeh said the sheer volume of options could be a stumbling block for some companies.
"While the integration of solar generation data will undoubtedly be beneficial to home energy management systems, uncertainties remain as to the ability of solar service providers to attract sufficient HEMS adoption in a market rife with competition," he said.
But not all energy storage systems are tied to solar PV. A few developers appear intent on capturing a market that still wants backup power and the potential to load shift during times of high prices.
When Tesla announced its residential storage options earlier this year, the price point on its 10 kWh battery of $3,500 (uninstalled) elicited gasps. But what seemed like a standout at the time could be one more among the pack. Since then, a pair of storage options have been announced that appear to target the same capacity, but with potentially lower price points and simpler installation.
Orison, a startup based in California, announced a line of home battery products that require no installation, have a lower price point than Tesla's and can keep a home's lights on through the night in the event of an outage.
The Orison "Tower" and "Panel" resemble a lamp and a picture frame, weigh approximately 40 pounds, have a capacity of 2 kWh and will have built-in demand management functions. The tower will sell for approximately $2,000 and the panel for $1,600. Expansions could allow a customer to have 8 kWh of storage for $4,900.
And SimpliPhi Power, formerly known as Optimized Energy Storage, said last month it is developing a home and light commercial energy storage option the company says is 98% efficiency and does not require expensive heat mitigation. No price or capacity has been announced, but the company is touting size and ease of installation among its selling points.
Ease of installation may wind up being the next real step in home storage. Devices you can hang on a wall or sit on a table, and simply plug in to manage your energy use, will entice consumers. As a plus, the newest offerings resemble sleek tech gadgets more than the bulky batteries of the past.
Shifting business models will also play a part, even beyond leasing schemes and falling storage prices. Storage developer Stem Inc. last month bid in an aggregated storage load into the California ISO that in practice acted as demand response, sourced from six commercial sites.
As efficiency guru Carol Stimmel at Manifest Minds wrote recently, the industry is undergoing a fundamental change.
"We believe that in the wake of cheap residential solar and storage options, that taking a services viewpoint on residential energy efficiency accepts the reality that the electron is well on its way to easy ubiquity," she said. "This fundamentally changes the motivation for energy efficiency from the reactive (fix the house) to the proactive through advanced management (operate the house)."