U.S. SOLAR-PLUS-STORAGE MARKET
Drivers, Economics And Outlook
July 2015
EES Reception
Ravi Manghani
Senior Analyst, Energy Storage
GTM Research
RESEARCH PROVIDED BY
About Greentech Media
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About GTM Research
GTM Research, a division of Greentech Media, is the leading source of intelligence on the transformation
of the U.S. electricity sector. We focus in three key areas: solar power, energy storage, and grid edge
technology. GTM Research's analysis also underpins Greentech Media's webinars and events.
REPORTS
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SUBSCRIPTIONS
CONSULTING
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Agenda
1
The State of U.S. Solar-Plus-Storage
2
Non-Residential Segment
3
Utility-Scale Segment
4
Utility-Scale Segment
5
Outlook
www.gtmresearch.com
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The State of U.S. Solar-Plus-Storage
6
0.30%
5
0.25%
4
0.20%
3
0.15%
2
0.10%
1
0.05%
0
0.00%
2011
2012
Solar-Plus-Storage Deployments (MW)
2013
2014
% of Solar Installations with Storage (%)
Solar-Plus-Storage Deployments (MW)
Solar-Plus-Storage Deployments and Installation Share in the U.S.
Solar-Plus-Storage as % of Solar Installations
Source: GTM Research
www.gtmresearch.com
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Behind-the-Meter Incentive Programs and Pilots
U.S.: DOE $15 million funding
behind-the-meter solar and storage
integration
In 2014, Con Edison and
NYSERDA initiated a Demand
Management Program to
achieve 125 MW of peak
demand reduction in summer.
Battery storage has a base
incentive level of $2.10/W and
thermal storage of $2.60/W.
California PUC added
advanced energy storage as
a qualified technology for the
Self-Generation Incentive
Program in 2009. 2015 base
incentive level for energy
storage is $1.46/W and is set
to decrease by 10%
annually.
APS 2 MW solar-plusstorage; $1 million
rebates for pilot program,
residential non-volumetric
charges that could impact
storage
In winter of 2015, several bills
introduced to establish tax credits for
grid-connected and off-grid storage
systems; PUC ordered Hawaiian
Electric to streamline interconnection
requirements for customer-sited energy
storage with solar. Stem has 1 MW
pilot program underway.
In 2014, New Jersey BPU issued
a competitive solicitation for a
renewable electric storage
incentive. The program budget
was $3 million and awarded to 13
storage projects totaling 8.75 MW
paired with renewable generation.
2015 round of funding will likely
total $6 million.
Source: GTM Research
www.gtmresearch.com
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Battery and System Costs Will Continue to Drop
$2,500
$2,000
$2,000
Certain Vendor Who’s
Name We Shall Not
Speak
$1,816
$1,632
Cost ($/kWh)
$1,500
$1,400
$1,300
$1,100
$1,000
$1,000
$700
$600
$500
$500
$429/kWh
$250kWh
$0
2010
2011
Battery Cost ($/kWh)
2012
2013
2014
Installed Commercial System Cost ($/kWh)
Source: GTM Research
www.gtmresearch.com
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Occasional
Ancillary Services
Renewables
Smoothing
Power Quality
Rare
Frequency of Use
Frequent
Solar-Plus-Storage Benefits Vary in Duration and Frequency
Short
Peak Demand
Charges
Time-of-Use
Shifting
DR Revenues
DG Electricity
Sales
Fuel Costs
Resiliency
Medium
Long
Discharge Duration
Customer-site application
Front-of-meter application
Both sides of meter
Source: GTM Research
www.gtmresearch.com
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Non-Residential Segment
Time-of-Use
Shifting
Medium
Long
Occasional
Peak Demand
Charges
Rare
Frequency of Use
Frequent
Primary Drivers of Non-Residential Adoption – TOU Shifting and
Demand Reduction
Short
Discharge Duration
Customer-site application
Front-of-meter application
Both sides of meter
Source: GTM Research
www.gtmresearch.com
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System Economics for Large Office - 450 kW
Solar, 375 kW/750 kWh Storage (USD Millions)
Lifetime Commercial Solar-PlusStorage System Economics
$10
$8
$7.8 million
Energy Savings $2.3 million
Demand Charge Savings
$4.5 million ~ Double that of
Energy Savings
$6
$4
$3.6 million
$2
-$4.1 million
$0
-$2
-$4
-$6
Revenue/Savings
Costs
Total Value
Energy Savings
Demand Charge Savings
ITC Credit
State Storage Incentive
System Cost (Excluding benefits)
O&M Cost
Battery Replacement Cost
Inverter Replacement Cost
Interest Payment
Total Tax Payment
Total System Value
Source: GTM Research
www.gtmresearch.com
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Residential Segment
Occasional
Time-of-Use
Shifting
Rare
Frequency of Use
Frequent
Primary Drivers of Residential Adoption - TOU Shifting
Short
Medium
Discharge Duration
Long
Customer-site application
Front-of-meter application
Both sides of meter
Source: GTM Research
www.gtmresearch.com
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Hawaiian Electric Case Study
Customer Profile
Customer Type
Large Residential
Utility
Hawaiian Electric (HECO)
Tariff
Schedule TOU-R
Year of Installation
2018
Scenario 1 - Today
Full Retail NEM
Weighted Avg. Electricity Price: $0.38/kWh
Optional Time-of-Use Pricing
Scenario 2 - Theoretical
PV Export Price Drops to $0.16/kWh
Source: GTM Research
www.gtmresearch.com
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How Residential Energy Storage Actually Works
Reduce Export
4.0
Avoid Peak Prices
Export (kWh)
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Export - Solar Only
Year 1 - Revenue/Savings
($)
$250
Export - Solar Plus Storage
First Year Revenue/Savings on Excess Solar Generation
$200
$150
$100
$50
$0
Jan
Feb
Mar
Apr
NEM Revenue (Current)
May
FIT Revenue (Proposed) w/ Storage
Jun
Jul
Aug
Sep
Oct
Nov
FIT Revenue (Proposed) w/o Storage
Dec
Storage Savings (Proposed)
Source: GTM Research
www.gtmresearch.com
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Storage Can Improve Residential Solar Economics in
Lower Export Tariff Scenario - Hawaiian Electric Company
25%
Unlevered Internal Rate of Return (%)
21%
20%
15%
13%
13%
Solar - Proposed Tariff
Solar-Plus-Storage - Proposed
Tariff
10%
5%
0%
Solar - Current NEM
Source: GTM Research
www.gtmresearch.com
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Utility-Scale Segment
Occasional
Renewables
Smoothing
DG Electricity
Sales
Rare
Frequency of Use
Frequent
Primary Drivers of Utility-Scale Adoption –
Renewable Smoothing and Electricity Sales (TOU)
Short
Medium
Discharge Duration
Long
Customer-site application
Front-of-meter application
Both sides of meter
Source: GTM Research
www.gtmresearch.com
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Utility-Scale Solar-Plus-Storage
Explored in Five Flavors
Anahola Solar Farm, Kauai, HI
6 MW on 12 MW PV
Jacumba, San Diego, CA
10 MW with 20 MW PV
Mandates and
Utility
Procurements
Co-Location
with Benefits
Three 4 MW Projects at
PG&E-Owned Solar Sites
in CA (AB 2514 RFO)
Capacity
Needs
Salinas, Puerto Rico
3.6 MW on15.5 MW PV
TBD
Technical
Requirements
PPAs or
Auction
Mechanisms
Source: GTM Research
www.gtmresearch.com
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Outlook
Annual U.S. Solar-Plus-Storage Market to Reach 769 MW by 2020
9%
769
800
8%
700
7%
600
6%
500
5%
407
4%
400
3%
300
195
200
100
5
5
4
4
22
2011
2012
2013
2014
2015E
71
91
2016E
2017E
2%
1%
0%
0
2018E
2019E
2020E
Utility-Scale Deployments (MW)
Total Deployments (MW)
% of Behind-the-Meter Solar-Plus-Storage Installations
% of Utility-Scale Solar-Plus-Storage Installations
Percentage of Solar-Plus-Storage Installations
/Total Solar Installations
Solar-Plus-Storage Deployments (MW)
900
Source: GTM Research
www.gtmresearch.com
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Annual California Solar-Plus-Storage Market to Reach 422 MW by 2020
12%
500
Solar-Plus-Storage Deployments (MW)
422
10%
400
350
8%
300
250
6%
205
200
4%
150
98
100
34
50
0
3
1
3
9
2011
2012
2013
2014
2015E
2%
52
0
0%
2016E
2017E
2018E
2019E
2020E
Behind-the-Meter Deployments (MW)
Utility-Scale Deployments (MW)
% of Behind-the-Meter Solar-Plus-Storage Installations
% of Utility-Scale Solar-Plus-Storage Installations
Percentage of Solar-Plus-Storage Installations
/Total Solar Installations
450
Source: GTM Research
www.gtmresearch.com
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Annual U.S. Solar-Plus-Storage Market to Cross $3.1 Billion by 2020
$3,500
Annual Solar-Plus-Storage Market Size (Million $)
$3,135
$3,000
$2,500
$2,000
$1,817
$1,500
$1,025
$1,000
$643
$500
$346
$104
$0
2011
2012
$554
$246
$59
$52
2013
2014
Behind-the-meter (Million $)
2015E
2016E
2017E
2018E
2019E
2020E
Utility (Million $)
Source: GTM Research
www.gtmresearch.com
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Thank You!
Ravi Manghani
Senior Analyst, Energy Storage
GTM Research
manghani@gtmresearch.com
RESEARCH PROVIDED BY