Could 2016 be the year that solar-plus-storage really takes off? There are plenty of signs to suggest so. PV is now well established in most European markets and at grid parity in some. Batteries, meanwhile, are plummeting in price.
The combination of the two seems an obvious route to relatively low-cost, carbon-free dispatchable generation.
In Germany, the residential PV market is already embracing storage thanks to generous government support, and other sectors are beginning to follow suit. As the year progresses, here are some of the main trends we expect to see.
1. Europe embracing grid-scale solar plus storage
Until now, Europe has been slow to pick up on large-scale solar plus storage. Most major battery systems installed on the continent so far are either standalone projects or linked to wind farms. But that is changing.
Just as the concentrated solar power industry has latched onto thermal energy storage as a must-have, so PV developers are increasingly aware that they can increase the value of their projects by including batteries.
The result is that while a couple of years ago there were no big PV-plus-storage plants to speak of in Europe, as of this month there were at least 10.
That growth looks set to continue not just thanks to the plunging cost of batteries but also because of concerns over the grid’s ability to cope with rising levels of intermittent generation.
2. Developers creating virtual power plants
German companies such as LichtBlick have pioneered the concept of virtual power plants, where distributed assets are tied together to form an ‘energy cloud’ whose output can be ramped up and down to suit demand curves.
In the US, companies such as First Solar are aiming to achieve similar results by aggregating plants and curtailing output as needed to meet utility requirements.
Providing quasi-dispatchable generation in this way clearly improves the value of solar within the energy system.
With the addition of storage the measure of control is much greater, allowing plant owners to trade more effectively on energy markets and achieve a premium for their output.
3. Community energy trading taking off
Another feature of virtual power plants is that you don’t have to sell your energy to a utility. Instead, you can offer it direct to customers who might themselves be energy producers too.
This community energy trading model was spearheaded by LichtBlick and others but more recently has been used by the German storage leader Sonnenbatterie as a way to cut utilities out of the residential power supply equation.
4. Utilities investing in energy storage
In the face of competitive threats from companies such as Sonnenbatterie and LichtBlick, it seems likely European utilities will fight back with solar-plus-storage offerings of their own.
This has already begun to happen in Australia, and in Germany the second-largest electricity company, E.ON, made a significant move last month when it became an investor in Greensmith, which makes storage aggregation software.
5. PV plants using hybrid storage
Solar developers are at the beginning of the learning curve when it comes to batteries, but one thing the storage industry knows already is that different battery types have very different characteristics.
Thus if you want to increase value with a stack of potential applications, such as smoothing and peak shaving, you may need to combine different types of storage.
This has already been done with wind power at installations such as Braderup in Germany; solar could follow suit in 2016.
All in all, hybrid PV and storage installations are set to grow from just over 200 MW in 2014 to 3.5 GW in 2018, according to IHS. Storage will be essential in integrating non-programmable renewable energy sources into the grid. The rise of hybrid and electric vehicles will be another industry catalyst.
Energy storage development and penetration will not only depend on technical battery evolution, but will be tightly connected to the commercialisation of the available business models across all market segments.
