Solar and energy storage go together like peanut butter and chocolate. They're nice enough on their own, but they're even better together – or so thinks Janice Lin, co-founder of the California Energy Storage Alliance.

A lot of people agree with Lin's solar "peanut buttercup" theory for energy storage, a broad range of technologies often regarded as the holy grail for renewables – a gamechanger that would calm the shale gale of cheap natural gas that has blown against clean energy over the past couple of years.

That hope shorts out when developers and utilities look at the cost of using the power of stored light when the sun sets or a cloud passes.

But Lin and others like her suggest that there might be a day not too far in the future when PV systems could become more expensive without storage.
BrightSource's addition of molten salt storage to its power plant for Southern California Edison indicates that this might be true for Concentrating Solar Power.

But Lin said that this is also the case for PV, depending on how you do the math.

"I wanted to challenge this conception that storage is too expensive," she said. "Expensive is always a relative term. Energy storage is cost effective, [but] the challenge has always been how do we define the application."

Much of the policy focus in California has been on behind the meter initiatives and energy regulators are currently implementing a key piece of legislation, which will set storage targets for utilities, she said.

"The stars and the moon have aligned in terms of policy makers here in California, a couple of years ago the very first storage-focused legislation was enacted here. This requires our utilities to consider procurement targets of energy storage by load serving entities – we're implementing that now and through that proceeding defining the market and applications for energy storage.

"This is how solar got started in California – there were commercialization incentives through the self-generation programme that populated the market with a lot of solar projects and we predict the same thing will happen with energy storage. We're just on the front end of that because these incentive programmes are available now.”

The Self-Generating Incentive Programme (SGIP) began in 2001 and provided Californians with incentives to install distributed sources of renewables. SGIP has now been extended to storage integrated with solar.

It was opened with about $400m in funding and the storage can get up to $2 a watt for a project up to 3MW, about $3.5m maximum per project, said Lin.
She said the programme had been open for about six weeks and is "working beautifully for storage, just like it did for solar years ago."

Dramatic cost reductions as seen in the solar market will be a key driver in market adoption of energy storage.

Martin Ammon, senior research manager at EuPD, said that this was particularly the case in Europe where feed in tariffs are ramping down.

"The elimination of FiTs after 2015 will directly affect the profitability of future solar storage investments. Residential lithium-ion and lead acid solar PV storage solutions are currently not viable business cases. But economic feasibility is expected to shift after 2015."

After 2015, integrated PV systems could make more economic sense with storage than without.

"In the near future, expect prices of both technologies to continue to decrease. Compensation for electricity fed into the grid will decrease to zero by 2020 [in Germany], there's likely to be a strong decrease in the profitability of PV systems without storage.

"The core question for the development of storage solutions for PV systems is not the question of whether it is working or not; the question is, is the solution profitable or not?"

That question could be settled over the next few years if the calculations based in Ammon's case study are correct. His calculations assume a four-person home in Germany with a 5kW peak system integrated with a 5kWh battery.

"Without storage, the household can achieve a proportion of 25% for a PV system. With storage, that increases the proportion of consumption to 58%."
Ammon said his research showed that most residential storage solutions were still based on conventional lead-acid batteries that were more cost-effective than lithium ion batteries.

Increasing numbers of companies such as Bosch and Panasonic were looking at lithium-ion battery storage for PV systems despite costs.
The price, including installation costs, of a 9kWh lead acid battery system is around €9,500, versus €13,000 for an equal sized lithium-ion system, he estimated.

That margin would narrow as lithium ion costs reduce by 10–15% a year as companies innovate and improve designs. But lithium ion batteries already have attractive upsides, he said.

"The typical lifetime of a lead acid battery is around eight years when used in a PV system. The lifetime of a lithium-ion battery is around 20 years. The efficiency of lead batteries is 86% [whereas] lithium ion batteries reach an efficiency level of about 95%."

Installers, developers and the businesses and homeowners that pay for solar installations would also prefer to move away from lead acid because of the risk that "toxic contents could lead to exclusion from private households".

"This is the same with cadmium telluride in the PV sector. The dangers of fire or explosion are risks that apply to both lead batteries and lithium-ion.
"The consumer image of lead batteries is characterized by the risk of toxic substances. Li-ion batteries are associated with the EV sector and they have an image perceived as modern and progressive."

Excitement for the potential of energy storage has also spread to investors hoping for an expanding slice of the pie that it estimated to be worth $238bn over 10 years in the US alone. Last year, investment in energy storage grew thirteen-fold, making up 11% of total VC cleantech investments in California.
CalCharge is the brainchild of CalCEF, an evergreen fund of funds borne out of California's energy crisis and paid for with $30m from Pacific Gas & Electric's bankruptcy settlement, and the Lawrence Berkeley National Laboratory.

This consortium between investors and academics now aims to corral the best-in-class of storage technologies from the 30 startups in San Francisco's Bay Area and accelerate the development and deployment of their technology and reduce costs.

But BrightSource, Lin and a growing number in the renewbles industry would argue that storage isn't a question merely of price, but of value.
"When you think about storage and solar, clearly you have to think about the technology. But at the same time, you have to think about the market and benefit streams.

"Storage is in the money today, it just depends on what applications and what benefit streams you're able to put together. As we make progress with our policy agenda there will be more and more benefit streams. We're at the forefront of what will be a really huge market."

Comments