The average global cost of installing residential energy storage systems will fall from US$1,600 per kWh in 2015, to US$250 per kWh by 2040, according to the latest Bloomberg New Energy Finance (BNEF) report.
BNEF’s ‘New Energy outlook 2015: Long-term projections of the global energy sector’ forecast a boom in solar over the next 25 years, with PV accounting for 35% (3,429GW) of new power capacity additions worldwide.
A BNEF statement said: “The real solar revolution will be on rooftops, driven by high residential and commercial power prices, and the availability of residential storage in some countries.”
BNEF analyst Logan Goldie-Scot told PV Tech Storage that developed countries are moving from predominantly centralized systems to a far more decentralized system, with rooftop PV combined with energy storage a major part of that shift.
He said that near-term growth will be relatively limited for residential storage, because of “challenging economics” and “belligerent noises” from policy makers, however, Germany and Japan are already seeing strong opportunities in this area. Uptake worldwide will increase in the long-term with falling costs.
Goldie-Scot highlighted one caveat to the calculation of US$1,600 per kWh as the average cost for global residential storage in 2015, which is that Tesla Motors is already taking orders for lower prices, even though its 'Gigafactory' is not yet up and running.
He cited the US as having strong long-term potential with the phasing out of net-metering and other support mechanisms likely to drive residents to increasing self-consumption by using storage. Many have predicted that it is likely the US will see a greater shift towards applying time-of-use charges for households in the near future. At present, commercial electricity users in the US have demand charges and other time of use tariffs applied to their bills, which has driven activity in the storage sector as businesses install battery systems to 'arbitrage' these charges and greatly reduce them.
Furthermore, Goldie-Scot forecast growing opportunities in Australia, where three utilities have recently signed a deal to trial Panasonic's residential energy storage products. Due to high retail electricity prices, excellent solar resources and high levels of dissatisfaction with energy providers, PV and storage is becoming highly attractive in that country. A recent blog by John Grimes of Australia's Energy Storage Council for PV Tech Storage said that the economics of solar-plus-storage were attractive enough to outweigh even the reluctance of the country's government to support renewables.
At utility-scale, the BNEF report also found that larger-scale PV will increase by 24-fold to 1.9TW by 2040.
Furthermore, deployment of “flexible capacity”, such as when battery storage is used at utility-scale to help grid balancing applications for variable renewable resources, will also grow 17 times over to hit 858GW in this period.
Goldie-Scot said: “We believe storage will play a very important role at the utility-scale over this time frame.”
Such energy storage at large-scale is already being used in the US, Germany, the UK, South Korea, and Japan.
Goldie-Scot said: “Although demand will remain relatively flat in many countries up to 2040, peak demand is going to increase significantly so what our grid looks like will change. Energy storage has a potentially interesting role for satisfying that peak demand as we move to a slightly different energy system.”
The BNEF report forecast that by 2040, the global power generating mix will include 56% from clean energy sources. Renewables will account for nearly 60% of the 9,786GW of generating capacity installed over the next 25 years and two thirds of the US$12.2 trillion of investment. Additionally, solar project costs will all decrease by 48% by 2040, the report said. The report called the growing role of solar to be central part of the 'seismic' shift in energy networks toward greater distributed generation, PV Tech Storage's solar sister site PV Tech reported.