Energy storage has been the hot topic in solar and e-mobility over the last couple years, and it’s only getting hotter. Last year, energy storage installations in the U.S. totaled 311 MW and 777 MWh, up from next to nothing six years prior, and this is just the beginning. Wood Mackenzie and Energy Storage Association analysts predict that total MWh deployed will grow nearly 14 times in the next five years.
To ensure solar, e-mobility, and energy storage professionals have the knowledge and insight to make important business decisions in the new year, Intersolar North America teamed up with NAATBatt International—an association of companies and research institutions commercializing advanced electrochemical energy storage technology for emerging applications—to understand the top five trends shaping the market as it continues to grow into the next decade and beyond.
Plummeting Lithium-Ion Costs
The declining cost of lithium-ion battery technology is the primary trend driving market growth for the energy storage industry this year. Since 2013, prices have dropped by nearly 73%; in the first quarter of 2019, the market achieved a record-breaking 232% growth.
The downward price trajectory of lithium-ion technology continues to confound many projections that forecast the price to plateau or even reverse. Instead, experts now expect the cost reductions to continue as lithium prices fall an expected 45% by 2021. Bloomberg New Energy Finance has observed an 18% reduction in price for each doubling of cumulative volume, meaning that an average battery pack could be only $94/kWh by 2024 and $62/kWh by 2030.
Using batteries to do things like power vehicles and store electric energy on the grid were once thought to be completely uneconomic propositions. Today, because of falling costs across the battery industry, using batteries to perform these functions is not only possible, but can also offer advantages over the incumbent technologies of fossil fuel generation and internal combustion. As technology prices continue to fall, the economic benefits of energy storage applications will only see larger margins.
Utilities Making Moves at Scale
Utility adoption of energy storage and associated grid management technologies is another trend the industry is watching closely. As utility-scale solar maintains and gains popularity, utility asset owners are now looking to storage to help smooth peak demand curves and provide back-up power.
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