Solar Energy Storage In Five Years?

It is becoming increasingly obvious that the solar industry is going to have to address the energy storage issue soon if the market is to continue growing. Can battery technology be ready for primetime within five years?

Current moves on the part of utilities to centralize solar with large “solar farms” notwithstanding, solar will be considered marginal until it becomes dispatchable. That is, it needs to be available “on demand,” day or night, rain or shine, 24/7.

In a recent Scientific American article, Umair Irfan writes that, “Storing energy remains the missing link for many clean power technologies, but DOE researchers and startup companies are racing to fill the gap.” Irfan goes on to describe several promising next-gen storage technologies, such as “Aluminum-Air” batteries that store energy as molten aluminum. He also describes energy storage with super-critical fluids, as well as “flow batteries” which produce energy by pumping liquid electrolytes through a cell. These are particularly suited for grid-level electricity storage because they can be scaled up easily. It sounds like the technology getting close, but how close?

A recent report from Deutsche Bank (DB) recently predicted that energy storage will reach a competitive price point in as little as five years. Energy storage, which DB calls the “missing link of solar adoption” says that competitive batteries will become the “killer app” and the “holy grail” of solar penetration.

“Using conservative assumptions and no incentives, our model indicates that the incremental cost of storage will decrease from ~14c/kWh today to ~2c/kWh within the next five years,” the report says. “When overall system cost decreases are considered, we believe solar + batteries will be a clear financial choice in mature solar markets in the future.”

The report points out that “Commercial customers are often subject to demand based charges, which can account for as much as half of the electric bill in some months… We think companies with differentiated battery solutions coupled with intelligent software and predictive analytics that work with the grid to avoid these charges and smooth electric demand will pave the way for mass adoption.”

One such project that was recently announced is a recent announcement by Swiss energy storage start-up Alevo Group that they will be entering into partnership with Customized Energy Solutions (CES) to deploy 200 MW of its lithium-ion-based battery systems in an undisclosed wholesale energy market in the United States.

The distributed storage projects are aimed at providing frequency regulation services through CES, which works with eight independent systems operators in North America. The battery storage projects will help the unnamed grid operator integrate renewable energy resources, including solar, into the grid. The installations are planned for the second half of 2015, a spokesman for Alevo told PV Magazine recently.

Another promising energy storage project is being launched by ViZn Energy Systems in partnership with LFC Capital. Their program will offer commercial property owners solar PV systems combined with energy storage. The availability of as much as $5 million per project is expected to accelerate the deployment of ViZn’s Z20 Energy Storage System, a zinc/iron redox flow battery.

LFC Capital’s program uses a traditional operating lease with ownership options after six and seven years. LFC also encourages the use of a follow-on loan as a way to conserve cash and maintain low monthly payments throughout an extended investment period.According to ViZn, the ideal project size is a 50 kW to 1,000 kW solar PV installation, requiring 80 kWh to 500 kWh of energy storage.

Not only are these advances in battery storage great news for utility customers who are looking for more independence from dirty coal-fired electricity and government-sanctioned monopoly utility companies, but for those in the developing world, it could be their first opportunity to have access to plentiful and high quality electricity.

A report from the London-based Climate Group and the Goldman Sachs Center for Environmental Markets titled titled The Business Case for Off-Grid Energy in India, concludes that storage will be an important component of solar home systems in the country, sales of which are expected to grow at 60 percent a year between now and 2018.

The report identifies solar and storage as a tool for lifting 360 million Indians living off-grid– around 50 percent of India’s rural population– out of energy poverty.

The need for energy storage is obvious if the solar market is to continue to grow. What is less obvious are the amazing new opportunities that will become possible for both residential customers and businesses, urban and rural residents, when storage prices reach a point where they become competitive with grid power.