Battery Storage Still Needs Solar for Growth
Costs have fallen 40 percent, but technology still isn’t cheap
Some solar-charged storage units qualify for federal subsidy
Batteries are hyped as the fix-it for clean-energy projects that can’t otherwise produce power around the clock. But they may need solar for growth.
While costs have fallen about 40 percent since 2014, storage isn’t cheap. On their own, batteries don’t qualify for federal tax credits. But if a storage unit is charged at least 75 percent by solar, it can qualify for at least part of a U.S. subsidy enjoyed by those projects — the investment tax credit, according to David Burton, a New York-based partner at Mayer Brown LLP.
The tax credit is one of the reasons why solar developers, including Panasonic Corp.-backed Coronal Group LLC, are exploring projects that also include storage units, said panelists this week at Euromoney Seminars’ North American Energy & Infrastructure Finance Forum in New York. Another reason: utilities usually prefer power plants capable of supplying reliable electricity at all hours.
“Storage is new and cool,” Ed Feo, Coronal’s president, said on a panel this week. “The ramp-up is over the next three to four years.”
Only about 800 megawatts of storage is installed in the U.S., according to Bloomberg New Energy Finance. That’s about the size of a single natural gas-fired power plant. Solar, meanwhile, is in the midst of a sharp growth spurt, accounting for 5 percent of the world’s cumulative installed capacity as of last year and potentially almost one-third by 2040.