One of the reasons natural gas has grown to become the largest energy source for electricity in the U.S. is that it’s a very flexible energy source. It can provide baseload power for the grid, and peaker plants can provide short-duration energy that fills gaps when renewables aren’t producing energy or demand is unusually high. 

A lot of times the value of the peaker plants is generated in only a few hours per year. In Southern California, peak summer hours require gas power plants to provide supply when the rest of the grid is overloaded, which leads to higher power prices and makes the economics of these power points work. But energy storage systems can provide similar value to the grid at peak hours while providing additional services 365 days per year. As the cost of storage comes down, it could make natural gas peaker plants obsolete, causing another major shift in energy as we know it. 

Energy storage shows its worth 

When Tesla (NASDAQ:TSLA) built a 20 megawatt/80 megawatt-hour (MWh) energy storage system in Southern California early last year, it was a critical turning point for the industry. Not only was energy storage going to be the supplier power at peak times for the grid, replacing off-line natural gas facilities, but the project was deployed in a matter of months. 

Tesla’s highly publicized 129 MWh project in South Australia was built in less than 100 days and has already proven it can add value to the grid. A day before it was scheduled to be turned on, the energy storage system was called upon to provide 59 MW of power on an extremely hot day. Over time, it’ll help stabilize the grid at times of peak demand, reducing the need for peaker plants. 

Tesla isn’t the only one in the energy storage game, either. AES (NYSE:AES) and Siemens(NASDAQOTH:SIEGY) are betting big on energy storage as well with a joint venture called Fluence. The company already has a contract for the world’s largest battery energy storage system at 100 MW/400 MWh and has a total of 500 MW of projects in the pipeline. 

Energy storage is already starting to take some of the value formerly reserved for natural gas peaker plants, and GTM Research senior advisor Shayle Kann said recently that as energy storage systems become even more economical, he “can’t see why we should build a gas peaker after 2025.” 

Click Here to Read Full Article

Energy storage for the residential solar market has always been something of a holy grail for advanced energy companies. If storage becomes cheap enough, it could allow a rooftop solar system to provide all of the energy a homeowner needs, potentially making it possible to go off-grid. It could also be the energy hub for the home, deciding how to use energy most efficiently and connecting the smart devices that are beginning to become more common. 

In 2017, the commercial and utility energy storage markets started to thrive and grow, and in 2018, it looks like the residential energy storage market will start to show the same promise. Here’s why that is and why SunPower (NASDAQ:SPWR), SolarEdge (NASDAQ:SEDG), and Sunrun (NASDAQ:RUN) — and not Tesla (NASDAQ:TSLA) — are the three to watch next year. 

Energy storage systems finally make financial sense

The reason energy storage hasn’t been common in the home is that there was no financial reason to have it. Net metering allowed customers with solar systems to sell excess electricity to the grid at the same price they paid for electricity, effectively making the grid their storage location. 

As net metering has come under pressure across the country the economics of residential energy storage systems have changed. In some cases, like Hawaii, utilities are paying lower rates for rooftop solar exported to the grid, allowing a storage system to perform arbitrage. In others, there are demand changes based on the peak energy use of a home during a month, and if a storage system can lower those charges, they can be economical. Another popular structure is time-of-use rates, which adjust the cost of electricity throughout the day, something California has begun implementing. If a storage system can shift when a consumer uses grid electricity from an expensive time to a cheap one, it can make the storage system economical. 

These rate structure changes have only become widespread in the last year, driven by rate changes in California, which also happens to be the biggest solar market in the U.S. And those changes are what will make residential energy storage a booming business in 2018.  

Click Here to Read Full Article

Solar energy and energy storage have always been natural partners for homeowners and businesses who want to produce their own energy. But the energy storage side of the equation has never made economic sense, partly because batteries are expensive and partly because residential and commercial solar owners can export electricity to the grid under net metering. 

What’s changing right now is that battery costs are coming down rapidly and net metering is coming under pressure as utilities try to fight off growing residential and commercial solar installations. That creates an opening for solar and battery storage to become a booming market as companies create the technology that allows people to produce and consume more of their energy on-site. Tesla (NASDAQ:TSLA), SunPower (NASDAQ:SPWR), SolarEdge(NASDAQ:SEDG), and Sunrun (NASDAQ:RUN) are the four companies to watch as the industry grows. 

Tesla

Tesla’s Powerwall is probably the most well-known battery for residential solar systems, making the company a leader in the market. The Powerwall combines an inverter with a 13.5 kilowatt-hour (kWh) battery and controls for your energy system. It will connect to a solar system as well as Tesla vehicles, charging when you want it to and providing backup power for the home. 

Also, don’t forget about Tesla’s scalable Powerpack battery system. It’s one of the leading products in commercial and utility scale energy storage. The company just completed a 129 megawatt-hour (MWh) energy storage system in South Australia, the biggest lithium-ion battery storage system in the world. 

What Tesla can do is sell energy storage systems through SolarCity and through other installers. That makes it a solar battery storage powerhouse with a number of ways to grow in energy long-term. 

Click Here to Read Full Article

Tesla (NASDAQ:TSLA) was supposed to be the big name in solar and energy storage, leveraging the Powerwall for homes and Powerpack for businesses and using its SolarCity operations to push systems out into the wild. But Tesla is shrinking its solar ambitions and doesn’t seem to have much interest in being a leader in anything but utility-scale energy storage.

That presents an opportunity for the rest of the industry, and SunPower (NASDAQ:SPWR) is taking a surprisingly aggressive approach to its energy storage ambitions. Long-term, it could be a huge differentiator for the company. 

Rollout strategies matter in storage

It’s easy for a company to say it has an energy storage product, but rolling it out to customers is easier said than done. Tesla’s Powerwall was introduced in 2015, but there still haven’t been a meaningful number of the systems installed worldwide. 

What drives energy storage installations is economics, whic is a big reason the Powerwall has flopped. Outside of Hawaii, there hasn’t been an economic case for home energy storagebecause customers with solar panels can just send their excess electricity to the grid and be paid the retail price for it, a practice known as net metering. 

Where energy storage has been gaining traction for a few years is in commercial markets, where adoption is driven by economics. Commercial customers generally have bills split into usage and capacity components. The usage side of the bill is similar to residential bills, fluctuating based on how much electricity is used in a month. Capacity charges are based on the peak capacity used by a facility, even if it’s only for 10 or 15 minutes during a month. If energy storage can shave the peaks from this part of the bill, it can justify the storage system financially. Any other value adders, like shifting solar energy produced on-site from peak hours to evening hours, are gravy for the system. 

This is why SunPower is investing in energy storage for its commercial projects. Management says it currently has $60 million in storage pipeline, and in 2018 half of its commercial installations could include storage. That’s a big statement for a company with the No. 1 position in the commercial market today.

Click Here to Read Full Article

There might be a debate in the political world about the value of solar energy and energy storage for the grid, businesses, and homeowners. But there doesn’t seem to be any disagreement in the military over the value of solar energy, both in the field and at bases in the U.S. 

Solar and energy storage could increase security for thousands of troops across the country, and in the next decade the military could be a huge source of growth for the industry. 

Where solar and energy storage provides value

According to a recent piece by Joshua Pearce, a professor at Michigan Tech University who also receives research funding from the DOE and military, there are three types of threats to energy the military is worried about at domestic bases: natural disasters, crime or terrorism, and cyber threats. 

Since the military normally relies on the “civilian grid” for electricity, it’s susceptible to the same forces that have left millions of Americans without power over the last two months because of hurricanes. Attacks of some sort and cyber threats, which are a growing concern for grid operators, would be major concerns for the military by proxy. 

Renewable energy installations or microgrids on military bases could help answer some of that challenge. SunPower (NASDAQ:SPWR) has built solar projects at the U.S. Army’s Redstone Arsenal in Alabama, Nellis Air Force Base in Nevada, the Naval Air Weapons Station China Lake in California, and the Air Force Academy in Colorado Springs. It even added a 1-megawatt (MW) energy storage system at Redstone Arsenal earlier this year to reduce peak power demand at the base. First Solar (NASDAQ:FSLR) recently supplied 120 MW of solar modules to a military base installation in Florida. 

Click Here to Read Full Article

Net metering was a key factor in driving the residential solar market to where it is today, but its days are likely numbered across the U.S.  Utilities nationwide are having success at convincing state regulators that they shouldn’t have to credit homeowners for the surplus power they export to the grid at the same rate they’re charged when they consume power from it, which makes sense now that solar power systems are on around 1 million homes. Hawaii, the state with the most rooftop solar per household, has long paid consumers less than the retail rate for electricity, and California recently followed suit.

But when utilities choose to pay less than the retail rate for rooftop-generated solar electricity, they give homeowners an incentive to save their short-term surplus and use it later, performing arbitrage on the difference between the two rates. To use solar energy at a later time (for example, at night) homeowners need energy storage systems. Providing those could be the next growth driver for rooftop solar companies. 

Solar sales could get bigger

Today, most solar installations consist of  solar panels, an inverter, and a connection to the homeowners’ meter. At an average cost of $3 per watt, a 6 kW solar system costs about $18,000. If energy storage can be made economical for the homeowner, it adds another component to those installation, giving the companies a new product, and a new stream of revenue. 

Depending on the size of the energy storage unit, that added revenue could be significant. A single 14 kWh Tesla (NASDAQ:TSLA) Powerwall costs at least $7,000 to install, and some homeowners may want two or more to increase their energy flexibility. Selling and financing those energy storage systems could be a big business for installers, potentially doubling the revenue opportunity of each solar sale. 

Installers have more to gain from energy storage

The big difference between solar panels and energy storage for installers is the ongoing operation. Solar panels produce electricity every day, but there’s no ongoing maintenance or controls that can add value to a system in the long term. By contrast, someone needs to decide when energy storage systems will be charged and discharged on an ongoing basis, which will be a big business. 

Energy storage business models aren’t set in stone yet, but look for companies to take a percentage of the cost savings homeowners accrue as a fee for controlling the system. This could be an ongoing source of revenue for companies that can build scale in this space.

Click Here to Read Full Article

When most people think of energy storage, they probably think of Elon Musk and Tesla‘s (NASDAQ:TSLA) splashy moves with the Powerwall and Powerpack. Panasonic, Samsung, and LG Chem are also eyeing the energy-storage market in one form or another, building out capacity that could supply an expected boom in lithium ion battery demand. 

Lost in the shuffle is General Electric (NYSE:GE), a key supplier to the electricity market worldwide. The company builds everything from fossil-fuel power plants to wind turbines and the components that make up the transmission and distribution grid. And it may have some energy-storage solutions other companies just can’t match. 

Hybrid energy storage

Potentially the most meaningful energy-storage product GE released recently is a hybrid battery storage and gas turbine power plant. The product is designed to replace spinning reserves that are required to keep the grid functional as volatile wind and solar assets fluctuate in their output throughout the day. But instead of burning just natural gas to keep those reserves spinning, there’s a battery acting as a buffer. 

When the storage system is called upon, there’s a 10 MW lithium-ion battery that will ramp up power quickly, with up to 50 MW of natural gas generation. GE estimates the system will result in fuel savings, reduce maintenance cost, and lessen greenhouse-gas emissions that are burned keeping spinning reserves available. 

In this case, the battery isn’t a massive energy-storage system the grid can call upon, such as what Tesla or AES Corporation are building. It’s a buffer between the variable resources on the grid and the fossil-fuel plants that need to back up those resources. 

Energy storage for renewables

In the future, it would make sense that either battery energy storage or a hybrid power plant will accompany major renewable-energy power plants. If GE paired a battery with its wind turbines or a hybrid power plant, it could add tremendous value to the grid, reducing the variability that grid operators have to deal with. Eventually, it could even pair these products with inverters it already sells for the booming solar market. 

A few weeks ago, when I suggested that GE should buy First Solar (NASDAQ:FSLR), I mentioned that energy storage is the kind of product it could easily fold into its offering to make the solar product more valuable. And with GE trying to grow its inverter business, it would make a lot of sense to vertically integrate its offering with solar and energy storage. 

Click Here to Read Full Article

Energy storage in the home has always been something of a holy grail for those who love renewable energy. Solar panels on your roof could power your home during the day, and any excess could be saved in a battery for later use. Heck, even an electric car could be powered with solar energy generated at home.

The realities of the market are that residential energy storage never really made much sense. Net metering meant solar customers could export solar electricity to the grid at the price they pay for electricity, meaning there was no need for energy storage, and the economics of a battery that cost thousands of dollars never really made sense in the past. But that may be changing as net metering rules are changed across the country and energy storage finds value for the grid. 

The new rental Powerwall

Tesla (NASDAQ:TSLA) and Green Mountain Power are launching a program that will allow customers to get a Powerwall to back up power to their home for only $15 per month. That makes the price of a Powerwall — which starts at $5,500 for the battery itself and costs around $7,000 for full installation — much more affordable for consumers. 

It may not seem logical that Green Mountain Power would allow a customer to rent a Powerwall with a 467-month, or 39-year, payback, but they can do it because the rental fee isn’t the only value stream. Using utility data and Tesla’s GridLogic, the utility and Tesla will be able to provide value to the grid by reducing peak demand or filling supply gaps when sun isn’t shining or wind isn’t blowing. And that will be cheaper than installing new power generation capacity. 

This is the bleeding edge of energy storage

Long term, this could be a model that makes sense for residential energy storage, as long as utilities and regulators create a framework that will allow customers and solar or energy storage companies to generate value from batteries in the home. Tesla has been the most aggressive moving into this market so far, but SunPower (NASDAQ:SPWR) and Sunrun(NASDAQ:RUN) are exploring the space as well. 

SunPower has been testing energy storage in homes for years and is installing 4 MWh of battery storage with Sunverge Energy in Con Edison‘s territory in New York. SunPower’s management has said in the past that it will expand its energy storage offerings soon, giving customers the option to maximize value or self consumption. 

Click Here to Read Full Article

The biggest criticism of wind and solar energy has long been their variability as sources of energy for the grid. The sun is only out during the day, and the wind doesn’t blow 24/7. They’re not great “baseload” sources of electricity, and their variability can make the rest of the grid harder to manage (see California’s “duck curve”). 

To solve this challenge, cheap and abundant renewable energy needs to be moved from when it’s produced to when it’s needed. Energy storage is the answer, and it’s becoming big business faster than you might think. 

Energy storage growth

The estimates of energy storage’s growth are incredible. According to GTM Research, energy storage installations in the U.S. totaled 260 MW in 2016 and the industry will grow to 478 MW in 2017 and 2,045 MW in 2021. 

Furthermore, Bloomberg New Energy Finance projects that 25 GW of energy storage will be installed worldwide in the next 12 years from less than 1 GW today. But that’s assuming battery prices fall to $120 per kWh by 2030. 

These are high growth estimates, but they may not be bullish enough. Estimates are that Tesla‘s (NASDAQ:TSLA) costs are already below $190 per kWh and GM has reportedly gotten cell prices as low as $145 per kWh, and prices on the market are already trending lower than industry experts think. 

New, cheaper batteries

Eos Energy, which makes a zinc hybrid cathode Znyth battery, recently announced that it’s taking orders for energy storage systems at $160 per kWh for delivery this year and at $95 per kWh for 2022 shipments. 

This is the lowest price I’ve ever seen quoted, but it’s probably just the beginning. Tesla has been an industry leader so far, and with the company projecting lower costs from the scale of the Gigafactory, it could be below $100 per kWh for utility-scale projects by 2022. The $100 per kWh level would only be a reduction of 12% annually based on costs reported in 2016, which is very manageable for an industry cutting costs rapidly. 

Click Here to Read Full Article

The energy storage industry is positioned for some huge growth in the coming decade, but it’s already starting to take off in some surprising places.

In this week’s episode of Industry Focus: Energy, Sean O’Reilly talks with Motley Fool contributor Travis Hoium about the budding market for energy storage. Tune in to find out where the energy storage industry is the most active today, where it might grow in the future, a few companies that investors can look into if they want exposure to the space, how power pricing in the continental U.S. is affecting the growth of residential power storage, and more.

A full transcript follows the video.

Click Here to Read Full Article