Quantifying the Missed Opportunity of Solar Without Storage
At the turn of the 21st century, solar energy technology existed but it was far off and still futuristic. In fact, it wasn’t until 2010 or so that solar panels started to pop up on the rooftops of homes and businesses more noticeably and in utility-scale solar farms, and then ultimately seeing exponential growth. Driven by solar installation prices that are about three times cheaper than they were in 2010 in the residential sector and almost more than eight times cheaper in the utility sector, falling from solar capacity has grown from a blip on the radar (less than 0.1% of total generation) to a total 2021 capacity of over 94 Gigawatts (GW).
As solar programs have sought to grow, the understood reality has been that the key to unlocking even more solar installations is energy storage. From the Duck Curve to intermittency, many of the most notable hurdles in the world of solar energy can be solved if the power generated by the sun could be efficiently and affordable stored to ensure that energy could be used when and where it’s most needed. The energy storage sector, however, has been slower than solar to grow in past years, but that seems poised to change with falling battery prices poised to define the next decade.
Experts predict U.S. grid-scale storage capacity is set to grow by five times by mid-century, while the optimal pairing of solar + storage has been identified as the future of energy independence and reliability for homes, businesses, and even microgrids. For example, of the 14.5 GW of utility-scale battery storage in the U.S. pipeline from 2021 to 2024, 9.4 GW (65%) are set to be paired directly with solar generation.
But what’s driving this push towards solar + storage? And what are the opportunities missed when solar generation occurs without battery backup for it?
Utility Bill Savings
The first reason that energy storage as a partner of solar power is gaining favor is the most direct and obvious, but also the most motivating: savings on energy costs. With solar power installed on a home or business without batteries, the only actions the customers can take is to consume the solar power or to send it back to the grid (in regions that allow net metering). That’s the only flexibility offered, and because solar panels aren’t always producing at the time when customers most need energy, the amount generation cuts into power demand for the building can be suboptimal. For example, peak power usage often occurs during late afternoon and early evening, the time when the sun is not at its peak so solar generation is falling.
To try and balance this misalignment between solar supply and consumer demand, utilities often create specific rate structures that encourage consumption during hours where solar is plentiful and charging more during those peak hours. But again, the normal customer can only have the flexibility to use energy or not at a given time, there’s not much more they can do to adjust.
That all changes, though, when these solar customers also invest in battery storage!
When these solar installations are paired with energy storage, it allows those buildings to over generate from their solar panels during the day to charge up the batteries, only to tap into that energy later during the day when demand is peaking and energy costs are highest. Customers with these time-variable rates can utilize solar + storage to reduce their energy costs, all unlocked thanks to the availability of batteries. Study finds that intelligent on-site energy arbitrage like this allows real customers to unlock a further 30% of energy bill savings.
Further, consider the momentum in the world of tiny homes, where homes require less than 10% of the power of an average home and which have seen annual builds in some regions grow by as much as 200%. These homes can readily have their owners see 100% energy bill savings with proper installation of solar plus storage given their low energy needs, though that would be impossible without energy storage to ensure that power was available at night and when the sun wasn’t shining.
Further Decarbonization
Homes and businesses that invest in solar installations are often thrilled by their economic benefits, but often these are decision-makers who are also motivated by the desire to contribute to the clean energy future. Solar panels are one of the most impactful and visible ways that a building can demonstrate its commitment to greenhouse gas reductions, helping to decarbonize the local area.
Like the dollars and cents of it all, the amount of emission reductions possible with a solar installation is only enhanced when paired with energy storage. And even better: the patterns and actions such customers can and should take to achieve these goals mirror the exact same actions as the ones they should use when simply trying to save money. By using solar panels to charge their on-site batteries during the middle of the day, and then using that energy once the sun goes down, these customers can have 100% renewable energy running their systems for a much greater portion of the day. A customer with solar panels but no batteries is at the whim of the sun’s pattern and the cloud cover to know when they can use carbon-free energy, but the optimized solar+storage customer can carefully plan how to use solar energy for their needs well into the night.
Even better, these actions aren’t just reducing the carbon footprint of the home or business with this solar+storage installation, but on a grid-wide level those customers are also moving the needle of energy markets to allow for new large-scale renewables to come onto the grid. The more a building relies on its own energy generation, the more transmission capacity and power consumption demand is met by new utility-scale solar, wind, and other renewable projects. And these capabilities are part of the reason that the Solar Energy Industry Association finds that the long-term success of solar energy and its ability to scale beyond 20% of the grid mix relies wholly on the cost-effective integration of batteries and other energy storage.