Five years ago, not many people had any idea the home solar PV market would grow so fast. But it did, and there’s no stopping its momentum now. Similarly, I don’t think many people realize how fast the home storage market is going to grow. Home energy storage is not financially practical for many people right now, but costs are dropping fast. Combined with still-falling solar PV prices, this will make a lot of sense for a good number of homeowners in the coming few years.
While market research firms often underestimate the growth of disruptive technologies, the market research firm IHS has just projected that the home energy storage market will grow 10 times over from 2014 to 2018, going from 90 MW in 2014 to 900 MW in 2018.
IHS notes the increasing attractiveness of self-consumption, but it also mentions that supportive policies will help the market to grow.
Strong Initial Home Storage Markets
Of course, growth will not be uniform across the world. A handful of countries will actually drive the majority of the growth. In particular, IHS highlights Germany, Australia, Italy, and the UK, which it thinks will together account for 40% of the home storage market in 2018. Additionally, California and Hawaii should be important markets.
In addition to an estimated 20% fall in the price of lithium-ion batteries in 2014, IHS predicts that battery prices will fall 15% in 2015, helping to cross some important cost-competitiveness barriers in initial markets.
When Is Home Storage Logical?
I skipped the basics of why anyone would buy a home energy storage unit, but I guess that should be noted, especially since there are different reasons behind purchases. Some homeowners may want a storage unit as backup in the case of blackouts. IHS thinks this use would be most common in the US and Japan.
However, the main purpose of a home storage unit is to save money on electricity. The sun doesn’t shine at night (obviously), but if you can generate extra electricity from rooftop solar panels during the day and use it in the evening and at night for a lower cost than simply buying electricity from the grid, you’ve got a good incentive.
Another thing that can help make the solar plus storage combo attractive sooner is time of use (TOU) pricing. Electricity demand is greater in the afternoon and early evening. Some utilities have switched to charging more at high-demand times and less at low-demand times, like in the middle of the night. This makes a lot of sense, but it also makes storing electricity generated at lower-demand times, like the morning, and using it at peak demand times more sensible.
Overall, as I’ve written before, using the grid itself as your backup or “storage” is an intelligent approach much of the time. The grid is a wonderful shared resource. Living off the grid completely generally doesn’t make sense. However, it is becoming more attractive by the day, and grid-tied storage also is.
All in all, IHS projects a 90% increase in residential solar PV energy storage in 2015.
Image Credit: Tesla Motors