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Distributed solar and energy storage
- May 15, 2018 -

Distributed solar and energy storage technologies play a key role in reducing greenhouse gas emissions, increasing grid flexibility, and improving access to energy. A series of dynamic development trends will gradually determine the development and application of distributed solar energy and energy storage technologies, and whether it can achieve its potential value. The main findings of this research report include the following aspects:


• Several advantages of combining distributed solar energy and energy storage technologies


Solar energy and energy storage technology have their own advantages. Solar power can achieve zero carbon emissions without additional costs. Energy storage technology provides backup power, FM, and other grid services. Combine the two to obtain further advantages. In particular, it can realize continuous power supply at night, increase the output during the available power generation time, and improve the flexibility of the power grid. In distributed communities and rooftop systems, the combination of solar energy and energy storage technology can also reduce pressure on the distribution network and postpone or reduce infrastructure investment. At the macro level, energy storage and solar power generation can increase the penetration of solar facilities without major changes, thereby reducing carbon emissions. The combination of energy storage technology and solar power generation can also serve as a fast channel for electrification in emerging markets.


• Different ways to combine photovoltaic and energy storage by combining mature markets and emerging markets


- In mature markets, the main driver of the combination of distributed solar power and energy storage technologies is cost savings and reduced dependence on the grid. From a cost perspective, the main driver of consumers or communities investing in this technology is to reduce electricity bills. Photovoltaic power generation is the leading technology, and through the energy storage, the utilization rate of solar power generation can be increased, thereby increasing economic benefits.


- In emerging markets, the main driving force of the combination of these two technologies is to solve the problem of grid power supply instability. After consumers purchase energy storage systems, they can enjoy uninterrupted power. Solar power generation can support energy storage systems to extend the power supply time and further increase the value of energy storage systems.


- The imbalance in the development of these two technologies is already very obvious. Some areas in Germany, Japan, and the United States have rapidly adopted rooftop PV systems due to economic considerations, but in most cases they are not equipped with energy storage systems. India, on the other hand, has established a mature supply chain for lead-acid batteries, helping end users solve the problem of unstable power supply without solar power facilities.


• The regulatory mechanism is both an obstacle to roof solar energy and energy storage and a driving factor


If the market is to grow in the future, it must address the regulatory obstacles that lead to market prejudice against solar energy and energy storage, such as grid access fees, lack of electricity sales mechanisms for non-power plant projects, and self-consumption taxes for distributed generation. Wait. The net electricity metering deduction method is a case worth studying. Although it strongly promotes the adoption of distributed solar energy technology, it also reduces the economic benefits of energy storage technology.


• Energy storage costs are more important bottlenecks than solar energy costs


The cost of solar power technology has dropped significantly in the past two decades and will continue to decline. At the same time, in the total installation cost of residential photovoltaic installations, the labor costs and regulatory regulations have become more and more important. In terms of energy storage, whether it is possible to reduce costs is less certain, because the technical cost of the battery itself is greater than the labor cost. The estimate of Bloomberg New Energy Finance's "doubling of energy storage capacity and cost reduction of 15%" is based on only a few short years of experience, because the market for electric vehicle batteries is only a short time ago. If solar energy and energy storage technology are combined to become a viable alternative for mature markets and emerging markets, energy storage technology still needs to significantly reduce costs.


• The global electric vehicle market can shape the future of a combination of solar and energy storage technologies


Lithium-ion batteries are becoming the world's leading energy storage technology complementary to solar energy, but lithium batteries still need to expand industrial scale in order to achieve cost reduction. One of the main driving factors is the increase of electric vehicles, which are usually used for lithium batteries. The proportion of car batteries in the global lithium battery market is increasing, but the current growth rate is not yet clear. If trade barriers cause fragmentation of the electric vehicle industry, the advantages brought by economies of scale will also be reduced.


• The combination of solar energy and energy storage technology is not the only choice


Although energy storage technology can increase the overall value of solar energy, it is not the only one. Other options include improving the accuracy of renewable energy forecasts, improving demand response capabilities, and adding emerging technologies such as flexible loads, heat storage technologies, and electrical energy conversion. Most notably, low-cost natural gas can provide low-cost, highly-flexible electricity that complements solar energy, which reduces the attractiveness of energy storage technology. In emerging markets, the use of lower-priced coal to produce part of the electricity to increase the reliability of the grid may also undermine the value of combining distributed solar energy and energy storage technologies.

• Japan and Germany are pioneers in developing distributed solar and energy storage technologies


Japan and Germany have higher electricity prices and receive more regulatory support, thus establishing an early market that combines solar energy and energy storage technologies. The resulting innovation will benefit the world. Japan has a huge battery manufacturing industry, and the industry will continue to grow as the domestic market expands. In Germany, the business model innovation of solar energy storage technology has emerged. For example, consumers can rent a part of the power storage facilities for grid operators, and power companies such as StromBank set up community energy storage projects to support the development of rooftop solar energy. As forerunners, these two countries have also undertaken some negative influences. The lessons they have learned can ultimately benefit other countries.


• The US market is relatively fragmented, but in the long run, the combination of solar energy and energy storage technology may dominate.


California and Hawaii now have the highest solar energy penetration in the world. However, the direct obstacle to the integration of solar energy and energy storage technology in the United States is the continuously declining price of natural gas, which is the low cost of electricity generation. Despite this, U.S. start-up companies have embarked on the development of a complex combination of distributed solar energy and energy storage technology. Companies such as Tesla have also used the link between electric vehicles and energy storage technologies to recently launch the PowerWall residential battery system.


• China is prioritizing the development of power plant-scale solar projects, but there is still room for development with a combination of distributed solar energy and energy storage technologies.


China is currently drafting its “Thirteenth Five-Year Plan”. The latest guidance documents show that although the state supports the development of distributed solar energy facilities, the current focus of energy storage technology is still to ensure the reliability of large-scale energy storage. If rooftop and community solar power and energy storage technologies are further developed in China, they will begin in the highest-priced commercial and industrial sectors.


• India is ready to become a leader but still faces potential obstacles


India has more and more lead-acid battery companies committed to solving the grid power supply instability problem, and is ready to apply good domestic experience to foreign markets. However, with the development of the power industry and regulatory regulations, it is crucial that the central government and state governments implement strong policies to ensure that state-owned enterprises and the private sector can establish profitable and sustainable business models. Quality standards and quality assurance will also help support investments in distributed solar and energy storage technologies.


• Industry and policy makers need to start addressing the issues that may arise in the future from now on


The most pressing issues currently faced by the combination of solar energy and energy storage are the high cost of energy storage technology and the obstacles to regulatory regulation. However, other issues may also affect the development of the market after it is scaled up, especially if we do not anticipate beforehand. Get ready and ready. The problems that can be foreseen at this stage include: impact on reputation due to low installation quality (it is recommended to establish uniform standards in the industry, and implementation of certification system to solve problems), and regulatory policies caused by poor integration of power grids (recommended through continuous investment pilot projects) , widely sharing best practice knowledge to cope with), lack of skilled workforce (it is recommended to install installers and engineers training programs), and threats such as cyber attacks (it is recommended to establish alliances with the IT industry and strengthen cooperation in grid integration). The discontinuity of trade barriers and supply chains may also hinder the development of this area, reduce the dependence on materials, and promote the research of alternative chemicals to ensure that technical costs continue to decline.