Dominated by grid installations, this market segment will be a boon to energy storage producers but have only a modest impact on the solar market, Lux Research says
BOSTON, MA – September 10, 2013 – Corporates playing in the solar and energy storage sectors have long dreamt of combining the two complementary technologies to differentiate products and defend margins. This symbiotic match shows promise, yielding a $2.8 billion market over the next five years, according to Lux Research.
Grid-tied solar installations will comprise 675 MW, or nearly 95% of the combined 711 MW market, while off-grid applications including telecom power claim the remaining 5%. While the off-grid market enjoys higher profit margins, the much larger addressable market for grid-tied systems means they dominate the solar and energy storage market.
“Developers are pushing packaged solar and storage systems in order to stand out as value-adding leaders, but not all benefit equally,” said Steven Minnihan, Lux Research Senior Analyst and a co-author of the report titled, “Batteries Included: Gauging Near-Term Prospect for Solar/Energy Storage Systems.” "Residential energy storage will see a boost adoption due to solar, but the addition of storage will barely move the needle for solar players, driving a paltry 1% increase in global PV sales."
Assessing the emerging market for combined solar and energy storage, Lux Research analysts found that:
- Residential applications dominate through 2018. As lithium-ion (Li-ion) batteries and overall storage arrays fall in price, residential systems will gain the most, growing to 382 MW in 2018. The light commercial segment will increase to 220 MW while heavy commercial/industrial systems lag, growing only to 73.3 MW.
- Japan is the worldwide leader. Hit by high electricity prices and seeking alternative energy after the nuclear woes, Japan will install 381 MW of solar coupled with storage by 2018, leading all other markets by a wide margin. Germany will come in second at 94 MW, while the U.S. will be third at 75 MW.
- Newfound storage policies may dramatically increase the market. This year, Germany set aside $67 million to subsidize solar-tied energy storage and the U.S. Senate introduced a program that could fund $7.5 billion worth of new storage projects, or about 7.5 GWh of capacity.
The report, titled “Batteries Included: Gauging Near-Term Prospect for Solar/Energy Storage Systems,” is part of the Lux Research Grid Storage Intelligence and the Solar Systems Intelligence services.