Powering the Grid: Solar + Storage
Despite shipping constraints and other supply chain obstacles posed by the pandemic, the U.S. solar market is on track to have a strong build year with 15 GW projected to be installed in 2022. And with the rapidly increasing pairing with solar energy storage, the solar industry is primed to become an even bigger energy player. So, as this resource continues to ramp up and become an important part of our energy mix, let’s address some common questions about solar and energy storage.
Question: How is the solar industry doing?
Thanks to strong federal policies like the solar Investment Tax Credit, long-term declining costs, and increasing demand for clean electricity, U.S. solar generation has increased quickly – from 0.1% in 2010 to 4% in 2021. Today, the U.S. has 113.5 GW of total installed solar capacity, which is enough to power 21.8 million homes annually. And we’re just getting started.
Over the last decade, solar grew on average 42% each year while the levelized cost dropped more than 90% over that time. In 2021, 54% of all new electric capacity added to the grid came from solar, the third consecutive year that solar added the most generating capacity to the grid.
The strong growth can primarily be attributed to the quickly dropping cost -- only 10 years ago, solar was the most expensive way to generate electricity. In 2020, according to a report by the International Energy Agency, solar officially became cheaper than coal and gas, and in fact it offers the “cheapest...electricity in history.” While current costs are rising due to the global supply chain obstacles, solar’s long-term outlook is forecasted to follow the same declining price trend.
Given those supply chain issues and rising raw material costs, the EIA expects the U.S. solar industry to grow 25% less in 2022 than previously thought. Regardless of that impact, the industry is growing steadily and forecasts remain strong. Should the reconciliation bill (f.k.a. the Build Back Better Act) pass, the EIA believes it would increase solar projections by 31% over the next five years. The policies in this bill would serve as a massive stimulant, enabling increased long-term growth to complement the success of the solar industry to date. For more, go here to read a recent Primergy blog addressing the clean energy portions of the reconciliation legislation.
Question: How does energy storage benefit the solar industry?
It’s a fact: solar panels only produce electricity when the sun is out and that doesn’t always overlap with when energy is needed most. When peak energy usage is in the evenings, as the sun is setting, there is a supply and demand issue. Coupling solar energy with solar energy storage bridges the gap between supply and demand, and is key to achieving a power grid that is rich in renewable generated energy. Capturing excess solar energy during lower demand periods helps stabilize the grid both from a reliability and cost perspective too.
When energy storage technologies like lithium-ion batteries -- the most common type of battery storage -- are paired with solar, they capture excess electricity generated during non-peak times, store it, and release it when it’s needed. Check out Primergy’s quick video explaining energy storage and our Gemini project here.
By combining solar with energy storage, we maximize the impact of solar energy. It reduces our greenhouse gas emissions, decreases our dependence on fossil fuels, increases grid resilience, and provides cost-savings to customers. All of this results in a more reliable, consistent, and cleaner power supply.
Question: How is the energy storage industry doing?
While market-viable energy storage is relatively new, industry growth over the next five years is forecasted to be significant -- the EIA expects U.S. utility-scale battery storage capacity to increase 84% in 2022. Leading this growth is the rapidly falling cost of lithium-ion batteries which decreased 72% between 2015 and 2019, as manufacturing scaled to support both grid and electric vehicle needs. As of 2020, more than 83,000 people work in the U.S. storage industry, with battery storage employing the majority with almost 67,000 people employed. It’s no longer an inconsequential industry.
Solar accounts for much of the forecasted industry growth with 34% of planned solar projects co-located with energy storage. If all the currently announced projects from 2021 to 2023 become operational, the EIA calculates the percentage of U.S. energy storage co-located with power generation would increase from 30% to 60%.
The U.S. electric power market is in the midst of fundamental change due to the rise of large-scale, cost-effective battery storage. This emerging industry is key to enabling the grid to function with more flexibility, efficiency, and resiliency. The relationship between solar power and energy storage will result in continued growth for both industries.
Answer: the Sun + Storage
The amount of solar energy that hits Earth in just two hours could power the globe for an entire year. The question that drives our work at Primergy is: how can we most effectively capture, convert, and store this tremendous natural resource? The answer is solar coupled with energy storage. We’re on the cusp of a major growth spurt and a whole new era of solar impact. Let’s go!
About The Author
Primergy is an innovative developer, owner, and operator of distributed and utility-scale solar PV and battery storage projects across North America.