With subsidies starting to wither away and module prices falling, opportunities for solar energy storage systems appear to be growing. As they say, as one door shuts – or several as may be the case – another one opens
A report Solar Storage 2013 published this month by market intelligence company NanoMarkets forecasted that the global solar energy storage systems market will be worth US$2 billion by 2018 — a “conservative estimate” believes Dr Eicke Weber, who has recently been appointed President of the newly established German Energy Storage Association.
According to NanoMarkets, the falling costs of PV modules and declining subsidies, most notably the reduction of feed-in tariffs (FiTs), are playing a key role in driving growth in the solar energy storage market. As subsidies are reduced, self-consumption of solar power becomes more valuable than exporting, therefore, storing becomes a much more attractive option. These trends will lead to rapidly growing solar storage demand from small businesses and residential PV users in the immediate future, NanoMarkets believes.
This view is shared by Roland Hengerer, Technology Development Manager at manufacturer Trina Solar. Speaking to PV-Tech, Hengerer says: “The fact solar subsidies are being phased out in most countries now and countries like Germany now have grid parity means that the PV panels are cheaper than grid electricity. That means that we have storage [opportunities] where the cost is lower than the difference between the PV electricity price and the price of the grid electricity.”
However, Hengerer believes that for the energy storage market to really take off, costs of storage need to be lowered. This is because electricity prices have remained high in Germany, meaning businesses have been struggling to sell storage systems along with PV systems.
Weber agrees: “The key to rapid growth of the storage market will be rapid cost degression and efficiency increase of battery systems. Today, the lead-acid battery still is the lowest cost domestic storage technology, but in a few years we do expect more modern battery systems to become cost competitive, as they are already today in the mobile market where weight is a key factor.”
Germany leading the way in Europe
Paving the way in Europe is Germany. The country recently announced the formation of a new German Energy Storage Association, and in the next few weeks is set to launch a new federal incentive scheme for energy storage systems. Although the finer details of the scheme have not yet been revealed, observers expect it to begin shaping the future energy storage market.
Rumours in the industry suggest that the scheme, which will be applied to residential storage systems, will be focused on the battery storage element of newly installed PV systems.
According to Professor Peter Droege, President of Eurosolar, the European Association of Renewable Energy, the imminent incentive scheme “is only a signal now”, but has already had a strong effect in boosting interest in the whole area of energy storage. “Clearly, that signal is important particularly to larger and also medium size industry participants and players to engage in a growth curve in which otherwise wouldn’t perhaps have happened,” he says.
Hengerer points out that because the incentive scheme is only likely to come to a small amount, its main impact will be to give some early impetus to new market. “They’re talking about €50 million maybe. Every system will get €2,500 as a kind of credit subsidy so we’re talking about 20,000 systems,” he says. “So it’s a small number and nothing comparable to the overall PV market but it might be big enough to at least keep this young market alive and to keep people working on the technology.
“And when the cost gets to the point where it makes financial sense, then the market might start to grow seriously. At the moment I wouldn’t say that it will become a youth market but it will be something big enough to make it interesting for many players.”
Germany was a pioneer in feed-in tariffs for PV and many countries soon introduced their own subsidies after seeing the solar boom in Germany. Similarly, if the storage scheme proves successful, it is likely that similar subsidies will be offered by other countries.
“I do expect this, especially in countries in which the utilities themselves jump on this bandwagon by offering complete solar systems with storage options,” says Weber. “On the other hand, I expect increasing resistance in countries where the big electricity suppliers behave like dinosaurs, trying to defend their old business plans instead of grasping the opportunity of exciting new, growing renewable energy markets worldwide.”
Dr. Hengerer adds: “Essentially what we’ve seen happen in PV where basically many countries have repeated Germany’s feed-in tariffs, there is the question of money available and political will to really move on towards real energy. But I’m sure there are a lot of countries looking at these subsidies to see how it works and, if it proves successful, I wouldn’t be surprise to see other countries copy this scheme.”
Impact on smart grid deployment
Governments have been striving for enhanced grid stability and reliability all over the world and this has become one of the key reasons for the development of smart grids, with or without renewable energy.
Hengerer believes that solar storage systems and the imminent incentive scheme in Germany will both “definitely” play a part in the development of smart grids. “The idea of the government would be to use the storage system to support the grid and to enable storage systems to provide some kind of grid service to the utility. So the whole idea of the subsidies is based around the need to help the smart grid to grow and develop.
“Again it’s only one part of the overall picture but it will hopefully help to get the whole storage business moving and to keep the momentum going for the whole industry.”
Droege agrees the scheme will contribute to the development of smart grids. “It’s important to the developers and the suppliers of storage systems and important to the purchasers,” he says. “So it actually has a very strong market signal and also a strong signal in the R&D of storage systems and services so that of course is supporting smart grid development and deployment.”
‘No energy transformation without energy storage’
In November last year, at the International Renewable Energy Storage 2012 conference in Berlin, Eurosolar highlighted the growing importance of storage, claiming, “There is no energy transformation without energy storage”.
Expanding on this, Droege says that new forms of energy storage will be critical in the transition towards low carbon forms of energy. “Without having the capability of applying a new elite, if you will, of storage that is both standalone and grid connected, you can’t have a transformation from fossil/nuclear supply system to a renewable system.”
“If we want to move towards renewables,” adds Hengerer, “I think it’s clear we need storage. Renewables can’t control when the sun is shining or when the wind is blowing, so you will need some kind of storage. It’s not clear if it will be battery storage or another kind of storage but if we want to have a new energy source based on renewables we have to have energy storage. I think that’s very, very clear.”
Source: PV Tech