Solar+Battery Storage: The New Energy Titan

LARGE-SCALE COLLABORATIONS BETWEEN SOLAR FARMS AND BATTERY STORAGE SYSTEMS SEE RAPID GROWTH

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The advent of renewable energy sources challenges our control of energy generation. Sun and wind are variable; without a method of saving what we collect, their energy will be lost forever.

The union of modern battery storage systems and solar power represents an energy and economic force that enables large and small power-generating systems, businesses, and regions increased freedom from dependence on fossil fuels.

Solar and Battery Storage = Energy and Economy
Over the past decade, large-scale collaborations between solar farms and battery storage systems have grown rapidly, reducing the cost of electricity from such sources and creating abundant opportunities.

In 2016, for example, Tesla made national news when it partnered with the Kauai Island Utility Cooperative to sell energy in Hawaii from a solar and storage facility at 13.9 cents/kilowatt-hour (kWh). Within a year, AES Distributed Energy announced a solar and storage plan for 11 cents/kWh. By May of 2017, Tucson Electric Power signed with NextEra Energy for a 100 megawatt (MW) solar plant with 30 MW/120 megawatt-hours (MWh) of storage at only 4.5 cents/kWh. In January of 2018, Excel Energy’s solar and storage project was listing a median bid price at just 3.6 cents/kWh. Overall, since 2010 the cost of photovoltaic (PV) electricity has dropped 73 percent thanks to innovations in energy storage and solar technologies.

As prices continue to fall, solar power is not only a clean resource, but also a fierce competitor. In fact, it is already the cheapest form of electricity in Arizona and Colorado. However, it’s not just sunshine states reaping the benefits. If PV module and installation prices continue their trend of declining 4 -10 percent yearly, by 2026 solar power will range from less than 5 cents/kWh in sunny regions to less than 15 cents/kWh in regions with little sunlight. For comparison, this closely mirrors the cost of electricity from fossil fuels, which ranges from 5 cents to 17 cents/kWh.

The job market also favors cleaner sourcing. Excluding fuel production, in 2017 the solar sector supported 350,000 jobs in electrical generation and the battery storage sector supported 53,000. By comparison, fossil fuels (coal, gas, and oil combined) industries employed 172,000.

Who’s Investing?
Individual states are well aware of the economics and are actively seeking energy-generating partners. California has announced or commissioned 943 MW of solar and storage projects; several other states are also investing: Hawaii (415 MW), Nevada (300 MW), Colorado (277 MW), Arizona (135 MW), Florida (54 MW), Texas (28 MW), and Minnesota (15 MW). The Southwest has seen a surge thanks to companies looking to invest as prices fall below that of natural gas sources.

Government actions are also helping propel solar and storage. The federal Investment Tax Credit (ITC) allows for 30 percent of the cost of residential and commercial solar installations to be deducted from federal taxes without a value cap. When this credit is applied to the construction of solar and storage projects, cost savings can reach 40 percent of the cost of a standalone system. Overall, the price of solar modules has dropped 92 percent and solar capacity has grown 70 times in the past decade.

Despite threats posed by the tariff showdown between the U.S. and China, solar appears to be healthy. It’s no longer expected the 10 percent tariff on Chinese inverters will raise solar prices or slow construction. This is evidenced by 2018’s performance, where an estimated 8.1 GW of PV solar was installed, an upward trend to a more diverse energy portfolio.

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The Battery Boom
Another driver has been the swift rise of battery technology, especially lithium-ion (Li-ion) systems. Thanks to their power density, life cycle value, flexibility, round-trip efficiency and small physical footprint, Li-ions can perform across the board from intense, short-duration functions to longer-duration applications. They work by controlling the flow of lithium ions between a cathode (usually a layered oxide like lithium-iron-phosphate or a spinel like lithium-magnesium-oxide) and an anode (often graphite), which are separated by a liquid or a solid electrolyte, according to a study commissioned by the Copper Development Association.

These qualities have attracted a crowded field of high-tier investors like Samsung SDI, BYD, Panasonic, LG Chem, Kokam, Leclanché, Tesla, and more. Of the top 10 energy storage providers in the United States (excluding hydropower), eight are Li-ion systems. To go one step further, the top five are all Li-ion, led by Samsung SDI with 286 MW and rounded out by Tesla at 69 MW.

Some of the world’s largest, multinational electronic manufacturers are producing Li-ion batteries on a large scale. The influx of trustable, bankable corporate believers has produced a symbiotic relationship that’s continuously cut prices. From 2014 to 2017, the installed system price for Li-ion bulk storage decreased 48 percent.

Evaluating Other Options
Despite all this, the battery storage industry is still relatively young, so the commitment from an array of industry leaders in this technology has given it enormous credibility. Reliable warranties from these companies have softened the up-front capital requirement and risk for interested parties, helping feed the symbiotic loop between outside investment and increased incentive for technological advancement.

While Li-ion is the current battery king, other options are growing stronger. From 2016 to 2017, flow batteries made up 8.9 percent of new project power capacity, the highest percentage behind Li-ion. This is a single-celled battery that facilitates the flow of electrons through pumped liquid or semi-solid anolytes and catholytes across a membrane. Flow batteries offer a little more variety than Li-ions with three fuel options: zinc bromine, vanadium redox, or iron chromium.

Thanks to its ability to store power for lengthy periods, flow batteries represent a strong choice for long-duration and low-cost operations that require shifting multiple hours’ worth of collected energy from one time of day to another. As the market continues to expand and diversify, some groups believe flow batteries will emerge as a serious challenger to Li-ion batteries.

As a whole, U.S. energy storage projects skyrocketed 174 percent from 2013 to 2018. More increases are on the way; currently, the U.S. possesses 41 percent of the world’s operational energy storage projects, with an additional 33 percent under construction, many of which are battery-specific, according to the U.S. Department of Energy. As this market continues to grow, it pairs well with clean energy sources like solar that are looking for storage options.

For the first time, society is placing its trust for a better tomorrow in energy sources fueled by powers we cannot control. This energy revolution comes with expected and unexpected growing pains but also the potential for rapid, positive change. As the capabilities of solar and storage continue to grow across North America, the energy and economic benefits help drive toward a cleaner, more sustainable reality. 

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