Energy Storage Is the Next Growth Driver for Solar

Some critics of solar energy rightfully criticize the energy source for its intermittent energy generation, which not only makes solar difficult to manage on the grid, but also limits its potential to grow because fossil fuels are still required for night power generation. But if energy storage can be added to solar systems, it not only levels out the peaks and valleys that can occur during the day, it would lead to a more manageable grid and even the possibility of cutting the grid cord altogether.

California, which is leading the charge into solar, took a step in that direction, eliminating interconnection fees that would add $1,400 to $3,700 to energy storage systems in the state. Utilities argued that a review of energy storage systems were needed while simultaneously arguing against net metering, in part, because of the difficulty it adds to managing the grid. But California's regulators saw things the solar industry's way and eliminated the fees and review, opening up a huge potential market for energy storage.

Community solar installations like this one will be an early market for energy storage. Image courtesy of SolarCity.

The energy storage revolution will be televised
Leading the charge against these fees was SolarCity  (NASDAQ: SCTY  ) , which is trying to roll out energy storage for both commercial and residential installations. Under the new rules, systems under 10 kW, which would be almost all residential systems, SolarCity will have to put in a meter to measure the interplay between battery charging and solar generation, but the cost is capped at $600.  

SolarCity's commercial energy storage system, built with Tesla batteries. Image courtesy of SolarCity.

In the long term, this is also big news for Tesla Motors (NASDAQ: TSLA  ) , which is SolarCity's battery partner and will be supplying batteries from its planned Gigafactory. Tesla's CTO JB Straubel spoke at an energy symposium this week and said that 35 gigawatt-hours of the plants capacity will be for automotive while 15 gigawatt-hours will be devoted to energy storage.

SunPower (NASDAQ: SPWR  ) is also testing energy storage in at least three locations around the world, and CEO Tom Werner has big plans for storage as well. The plan for SunPower isn't to get into the storage manufacturing business, like Tesla is doing, but rather to use partners for manufacturing. In a way, this is a departure from what SunPower is doing by building its own solar panel technology, but it reduces technology risk, and with huge companies like General Electric, Panasonic, and Samsung, just to name a few, eyeing the battery market, it may be best to be a buyer rather than a supplier.

The next phase of solar growth
A notable development with California reducing entry costs for solar is that regulators are starting to see the value of the solar/energy package. When combined, these two products will have less of a volatile impact on the grid while allowing solar installations to grow at the same time.

As costs fall for both solar energy and energy storage it'll become economical to install both products in many locations around the world. SolarCity, Tesla, and SunPower are certain to lead the way as barriers to energy storage fall.

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Read/Post Comments (10) | Recommend This Article (9)

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  • Report this Comment On May 24, 2014, at 12:11 PM, bigfoot wrote:

    Another move by Calif. to make it harder for established companies to operate. This time it is the utilities (and us rate-payers) who have to pay for a few rich so-called enviromentalists to brag to each other that they are off the grid. Usually while sitting in their multi-million dollar ocean front homes. (Built by illegals but that is another story) What is Calif. going to do when the grid falls apart?

    I have a quarter million in a utility fund but can see that I will have to move it sooner than later. What will the socialists do when no one wants to invest in these companies? Then who will bring electricity to their cherished illegal aliens? Of which we have over 3 million here in CA. And I have lived in Calif. for 56 of my 58 1/2 years.

  • Report this Comment On May 24, 2014, at 2:45 PM, JongettheHout wrote:

    The writing is on the Wall. Advances in solar technology and storage are the future of our energy system. The grid is going the way of the dinosaurs along with oil companies. We may feed off their dying carcases for a while but even the materials industry will stop using plastics eventually. The mining industry will change drastically as materials develop from renewable sources. Pollution and the defacing the planet is going to end. Money is going to change from something that clumps it's self together in a limited number of pockets to something that distributes it's self more equitably amongst everyone. Wealth as we know it will not exist as poverty will not exist either. The rich and powerful will resist and call this socialism but it is actually evolution and bible thumpers will also proclaim it a great evil. The greed and ignorance will end.

  • Report this Comment On May 24, 2014, at 2:48 PM, btc909 wrote:

    Almost sounds like in Kalifornia you need a second panel. You have the "Edison" panel and the panel you use.

    Edison: "ummm customer we see you are using no electricity?"

    Customer: "tosses letter in the trash / ignores phone call from Edison"

  • Report this Comment On May 24, 2014, at 3:36 PM, DmitriyY wrote:

    Energy storage is important, but lets not overlook the alternative - leveraging time zone differences and weather condition differences. Just in US a 3 hour difference means that effective routing of solar energy across the grid can ensure that excess supply during peak solar hours can be redistributed to net consumption areas. Same for areas of sun vs clouds - smart technology could redistribute energy "live" from net producer to net consumer areas to compensate for a large amount of day-to-day solar inequality. Storage would simply compliment this solution as it develops.

  • Report this Comment On May 24, 2014, at 5:06 PM, pdmaher wrote:

    Hello Friends, Storage is always half of the equation. Powering your vehicle, powering your home. This seems pretty fundamental. What is a little less apparent is the number of new storage technologies that have grown out of the advent of Graphene, The Ryden Dual Carbon Battery and Photoswitching, among others. When these storage technologies become hybridized with any of these new energy production technologies Thermionics, latest Photo Voltaic technology, Optical Rectification, Photoswitching and LENR, among others, our dependence on Fossil Fuels vanishes. I can hear the oil companies, and the big Tokamak guys knees knocking.

  • Report this Comment On May 24, 2014, at 5:12 PM, pdmaher wrote:

    The grid will soon vanish, much as gas lighting, the wagon trains, and Model T's have. There will be stops and starts, efforts to retard the development of new energy paradigm shifting technologies. But in the end innovation will win as it always has.

    May the Weak Force be with you,

    Paul Maher

  • Report this Comment On May 24, 2014, at 9:33 PM, MaxxTheKatt wrote:

    Anything beats wind generators. They are a blight on the landscape. Even Boon Pickens saw the light and bailed out of the wind generator fiasco.

  • Report this Comment On May 24, 2014, at 10:14 PM, kdavis860 wrote:

    I'm not sure we want the grid to vanish. It's great for load balancing, and improvements in grid management have wiped out the need for interruptions at times of peak demand where I live.

  • Report this Comment On May 25, 2014, at 12:29 AM, CarFanatic wrote:

    Aside from Tesla doing a great job making cars. There is more in the pipeline than most people/investors realize. This article states that.

    That is Tesla's growing business in stationary storage. This has the potential to bigger than their car business.

    Most people think it is only for storing energy from solar and using it when needed.

    But there is more to the story:

    Just for numbers sake.

    Lets say a home uses about 5 amps power under normal usage. Then when you start an electric motor from a compressor etc, or microwave. Notice how the lights dim for a few seconds while the system "fills up", then drops off after the initial start up. During that start-up the current draw can spike to 20 amps.

    In commercial applications that "spike" will set the electrical rate for the whole billing cycle, whether you use 20 amps continually or not. The electric utility will provide for those 20 amps and charge at a much higher rate than 5 amps (just to be available when needed). It just takes 1 spike to set the rate. This has been confirmed through friends in the utility business.

    Tesla's electrical stationary storage fixes that. During that initial spike, the storage unit takes over and provides the current to absorb that spike, due to their load leveling system. Thus pulling from the grid a constant low current draw, and a lower electrical rate.

    I think this is part of their Supercharger "charge free for life" equation.

    It is good for the grid.

    Utility companies love it.

    And shareholders will love it down the road.

  • Report this Comment On May 25, 2014, at 4:56 PM, vet212 wrote:

    Only repeat only if a better method of storing electricity is found neither Solar or wind can be cost effective or truly useful until this happens

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Travis Hoium

Travis Hoium has been writing for since July 2010 and covers the solar industry, renewable energy, and gaming stocks among other things.

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