Innovative Technologies Driving the Energy Revolution
Two explosive growth markets are renewable energy (RE) and the Internet of Things (IoT) technologies and both play a crucial role in creating value. The emphasis on how software and analytics can drive energy savings along with renewable energy and energy conservation measures (ECM) will be examined. Companies, like Arkados, exist that operate in the solar (through its recently announced acquisition of SolBright Renewable Energy), LED lighting, and IoT markets.
The IoT market is demonstrating substantial growth. According to McKinsey, the IoT market should grow from $900 million in 2015 to $3.7 billion by 2020. One of the key drivers of the IoT market is smart building applications where energy savings provides the return on investment (ROI). IoT applications play a leading role in renewable energies in including solar and wind.
Global investment spending in the solar PV markets was $161 billion in 2015, according to Bloomberg New Energy Finance. GTM Research and the Solar Energy Industry Association (SEIA) indicated that the US solar industry grew 95% to 42.4 gigawatts (GW) in 2016. According to the SEIA, the US solar market installed 14.6 GW of solar PV in 2016. In the global market, approximately 73 GW of solar was added in 2016.
However, when solar is measured against conventional energy sources such as natural gas and coal, solar represents approximately 1% of the energy generation in the US according to DOE. Despite the successful growth of solar in the US market, there is substantial upside for further growth. Fueling the solar market growth are falling PV panel costs and the extension of tax credits. Solar PV panel costs are at grid parity in most states. Solar power generation at a cost of approximately $0.13 per kWh is close to the US national average rate at $0.115 per kWh.
Solar costs at grid parity should be great news for commercial and residential applications as well as for the utility industry itself. However, renewable energy has limitations, and therefore, new technologies employing IoT devices and analytics can further enhance the market for solar and drive higher energy efficiency. These technologies apply to buildings and utility markets where tools and technology are required to better manage electric supply and demand. This image depicts how IoT can be employed in various objects to enhance energy data.
One issue for renewable energies is that their ability to generate power is intermittent. Because renewable energy is intermittent, energy storage is a crucial component to enable the distributed grid where electric supply has to match demand. Energy storage is a critical component of the distributed grid architecture. The ability to store energy is important to improve RE value and to provide power when RE sources are not available.
The US grid was built to generate electricity from fuels such as natural gas, coal, hydro and nuclear and transmit electric to substation for distribution to customers. Utilities globally are implementing micro and distributed generation grids meaning they are introducing electric generation at end points in the network. Solar generates energy and without the ability to derive granular insight in energy supply and demand, energy can be wasted. This is one area of focus for IoT connected devices and analytical software.
In addition, Net Metering, a process that credits the owners of solar generation systems for power added to the grid, helps solar become more attractive for customers. Several states including Arizona, California, Colorado, Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Oregon, and Pennsylvania have implemented net metering.
Arkados, and other like companies, are employing IoT devices and software to enhance value of renewable energy and facility operations. These technologies include energy and environmental sensors that enable diagnostic feedback loops to compare energy efficiency to facility conditions and set points.