The market for behind-the-meter solar photovoltaics (PV) paired with energy storage will surpass $1 billion by 2018 in the United States, according to the latest report from GTM Research. The report, The Future of Solar-Plus-Storage in the U.S., forecasts the nation to install 318 cumulative megawatts of behind-the-meter solar-plus-storage capacity through 2018.

FIGURE: U.S. Solar-Plus-Storage Annual Market Size Forecast



Source: The Future of Solar-Plus-Storage in the U.S.

Between California’s recent mandate for the state to procure 1.3 gigawatts of energy storage for its grid and the announcement of Tesla’s Giga factory, the energy storage market is nearing a tipping point. Paired with solar, energy storage becomes even more attractive given its ability to take advantage of the 30 percent federal Investment Tax Credit (ITC) in certain situations. It also allows the owner to scale down the size of the system, as opposed to installing a standalone system, resulting in lower effective upfront costs.

The report identifies several trends helping solar-plus-storage grow to a billion-dollar business in the U.S., including strong solar PV growth, falling battery costs, state incentives, net energy metering changes and resiliency needs.

However, significant barriers do remain. While the cost for lithium-ion storage is falling by 20 percent to 30 percent annually, the price points for both lithium-ion and other technologies are still high. Additionally, the report expresses concern about the ability of solar-plus-storage to participate in multiple use cases such as demand response and ancillary services. “Currently, only PJM and a handful of other pilot programs allow participation of aggregated solar-plus-storage in wholesale markets or for grid services,” said Senior Energy Storage Analyst and report author Ravi Manghani.

The report provides a detailed state-level forecast, breakdown of the vendor ecosystem, market drivers and barriers, and an economic analysis for residential and non-residential end customers.

By 2018, GTM Research expects that one in ten new commercial solar customers will pair solar installations with storage. “The key driver for this growth in commercial solar-plus-storage deployments is attractive end-customer economics,” said Manghani. “In this report, we quantify end-customer economics for three end-customer types across multiple utilities and conclude that for some of those customer-utility combinations, the economics look promising even today.”

Additional key findings from the report include:

Behind-the-meter solar-plus-storage in the U.S. will be a 169-megawatt market in 2018

The annual market value in dollars will grow from $42 million in 2014 to more than $1 billion by 2018

California will have the largest market share of solar-plus-storage through 2018, largely due to the fact that it will continue to be the biggest behind-the-meter solar market

For a typical commercial end customer, solar-plus-storage systems can provide electricity bill savings of 20 percent to 30 percent, depending on system size

Solar-plus-storage penetration for commercial customers is set to grow from 1 percent in 2014 to 11 percent by 2018

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For more information and the complete report table of contents, download the report brochure here.