In an article for GreenBiz, Navigant Research explains the forces behind a strong growth forecast
Deployments of solar PV and wind farms continue to grow substantially thanks to lower costs and technological improvements leading to increased power output. And while a steady increase of renewable generation deployments is good news for sustainability and greenhouse gas reduction initiatives, it’s also a challenge for many of the world’s outdated electrical grids.
In an article for GreenBiz, Adam Wilson, research analyst at Navigant Research, says energy storage is one technology that’s increasingly being used as a solution to this challenge.
“Energy storage that supports renewables integration can help solve these issues by maintaining smooth, consistent power flow to the grid,” he said. “As a result, renewable installations combined with energy storage are expected to make significant waves in the energy market well into the future.”
Wilson said strong growth is expected, with annual revenue for energy storage tied to utility-scale wind and solar is anticipated to reach $9.6 billion by 2026. Revenue for behind-the-meter installations, he said, is expected to surpass $13 billion in the same time frame.
According to the article, across the commercial and industrial (C&I) and residential sectors, combining renewables with energy storage is mainly driven by the potential for reduced electricity costs. In addition, the reduction of incentives for solar PV such as feed-in tariffs (FITs) and net metering in several key markets actually has improved the business case for energy storage plus solar PV over standalone solar PV. Further, demand charges — particularly impactful for C&I customers — provide a significant incentive to integrate energy storage with onsite solar PV.
Wilson adds that a continued decline in energy storage costs, as well an energy storage system’s potential to provide backup power, also signal strong growth ahead for this market.
The future is bright for both renewables and energy storage, he said. Together, the two are proving to be a powerful combination in the global energy market.