Residential energy storage: The industry’s next big thing
Large energy storage projects have headlined most news in the storage sector.
Enabled by falling battery prices, heralded as essential to renewables and mandated by progressive regulators, utility-scale storage projects have been widely viewed as the key technology which will help bring the nation’s utility grid into the 21st century.
In fact, the market for larger, utility-scale projects is expected to grow at a startling clip in the next decade – with global revenues anticipated expected to rise from just $460 million to more than $8 billion by 2024, according to analysis by Frost & Sullivan.
But amid all the hullabaloo surrounding larger deployments, a smaller segment has been gaining steam and could have an even larger impact on the grid. Residential storage, once the stuff of expensive pipe dreams, has gone from feasible to home feature, with developers bringing out a range of products and offerings. Many are tied to home solar systems, but there is also growing interest in stand-alone storage for battery backup, aggregation and demand response.
In fact, Navigant Research earlier this year pegged the distributed energy storage system as an area of startling growth, with annual revenues expected to rise from $450 million last year more than $16.5 billion in 2024.
Calling it “one of the fastest-growing markets for energy storage,” Navigant’s analysis said “in particular, residential and commercial energy storage has far exceeded industry expectations for growth and market volume.”
“Partnerships are flourishing in the North American residential solar-plus-storage market, and it’s becoming increasingly exciting,” said Omar Saadeh, a senior analyst at Greentech Media.
“The barrier to this market has long been the high cost of the batteries,” he said. But new business models and leasing strategies, combined with the falling cost of storage, “are creating new options for advanced home energy systems.”
The biggest residential growth area right now is solar systems paired with storage, allowing customers to store excess power for later use, and potentially participate in demand response or grid services programs.
“Increasingly more residential solar players have identified opportunities to expand into the home through a combination of energy storage, electric-vehicle charging, and home energy management system applications,” Saadeh said.
That’s an evolutionary skip from past partnerships, Saadeh said, which were based around more mature technologies like smart thermostats or energy gateways. The new slate of grid-connected, interconnected energy devices may be small now, but “players have indicated larger-scale ambitions in the next few years.”