The idea of combining solar photovoltaics with energy storage for retail electricity customers in the U.S. has received tremendous attention in recent months in anticipation of the first wave of growth in markets such as California and Hawaii, matched by a flurry of announcements. Annual market value in dollars is expected to grow from $42 million in 2014 to more than $1 billion by 2018. Utilities are also beginning to take the opportunity seriously, but significant barriers to the adoption of solar-plus-storage remain. Most significantly, cost reductions are in the early stages and business models need continued refinement before solar-plus-storage can emerge as a viable option for most customers.

That said, California, New Jersey and New York have upfront incentive programs for behind-the-meter solar-plus-storage. California’s Small Generation Incentive Program, in particular, has facilitated the deployment of several megawatts’ worth of solar-plus-storage to date. For a typical commercial end customer, solar-plus-storage systems can provide electricity bill savings of 20% to 30%, depending on system size. More than half of those savings typically stem from demand-charge reductions.

This slide-based report focuses on behind-the-meter segments of residential and non-residential, providing a comprehensive analysis of the nascent but accelerating solar-plus-storage market, including market drivers and barriers, end-customer economics, the evolving vendor ecosystem, and a market outlook. It covers the U.S. markets, with detailed economic analysis presented for California, Hawaii and New York. Solar penetration levels, dropping battery costs and regulatory reforms are discussed in detail, as well as end-customer economics for behind-the-meter residential and commercial customers across four utilities.