The energy storage business could be worth $103 billion by 2030, so dozens of companies are jockeying for position to capture market share. Tesla (NASDAQ:TSLA) has made the biggest splash, but AES and Siemens creation Fluence, Stem, Total, and General Electric (NYSE:GE) are trying to stake out their piece of the pie as well.
GE recently announced a new energy storage offering called Reservoir that's intended to reduce construction time, increase battery life, and improve reliability. It's also building the solution to fit with the way renewable energy projects are being built today, which could make it an attractive offering for developers.
GE Reservoir's pitch to developers
The Reservoir solution is a 1.2 MW/4 MWh scalable energy storage system that comes in a standardized, self-contained enclosure. GE assembles the product at its factory and then final wiring is done on-site before the energy storage system is operational.
In competing systems, more assembly of batteries and the enclosure is done on-site. That adds time to the installation, something GE says it can cut by 50% with Reservoir.
GE also says it can extend battery life by up to 15% with Reservoir, although details on how that will happen are sparse. Extending the life of batteries is a focus of any manufacturer today, but if GE can make a technically superior product, it would be a big differentiator.
Built for any market
While the information released about Reservoir indicates that its main target is as a value add-on to solar projects, GE is taking the product to market to cast a wide net. It could be added to natural gas plants to improve efficiency in sending energy to the grid, as a value-add for wind or solar projects, or even as a key component to microgrids.
As a key supplier to the electricity industry, GE has the name recognition and balance sheet to ease fears buyers may have about other energy storage products backed by less stable companies. And with financiers looking for proven assets, it could be valuable having the GE name behind energy storage applications.
From factory to power plant
Moving more of the work of building power plants from the field to the factory isn't a new one, but it's gaining traction in the market in an effort to reduce costs. For example, SunPower's (NASDAQ:SPWR) preengineered Equinox (residential), Helix (commercial), and Oasis (utility) products are built on the idea of lowering costs by doing more work at the factory. Microinverters are added to some panels at the factory to make wiring easier at a site, and in utility projects, the Oasis design is a standardized power block of 1.5 MW that developers can scale depending on their needs.
Developers are increasingly looking for plug-and-play options from manufacturers, whether they're building solar, wind, or energy storage. And manufacturers are adapting to the market by serving more turnkey solutions and doing less project development themselves. GE's Reservoir fits into the new market trends very well and could be tacked on solutions from virtually any other renewable energy component supplier.
Can GE become an energy storage powerhouse?
Energy storage will be a small business for GE in 2018, but it could be a big growth driver for the company over the long term. GTM Research predicts that over 9 GWh of energy storage will be built in the U.S. each year by 2023, worth tens of billions of dollars in revenue to the industry. Capturing some of that market will be crucial, and with wind turbines and other electric solutions, a turnkey energy storage solution with short installation times could be a valuable offering. At least GE isn't letting this growth opportunity pass it by, and is putting its best foot forward in energy storage.
Travis Hoium owns shares of General Electric and SunPower. The Motley Fool owns shares of and recommends Tesla. The Motley Fool owns shares of Verisk Analytics. The Motley Fool is short shares of General Electric. The Motley Fool has a disclosure policy.