The US Energy Storage Market for Residential Solar and Commercial Solar is poised to grow significantly over the next five years according to a recently published research report by GTM Research/ESA U.S. Energy Storage Monitor. Total US energy storage deployments grew 243% between 2014 to 2015; from 65 MW to 221 MW, and represents just the beginning of what is forecast to be a strong period of growth. Behind the meter storage (i.e. not a utility company) grew almost five times in the last four years (see chart).
The residential solar energy-storage market is beginning to take off after many years of talk; and while battery storage is still expensive in terms of cost per kilowatt hour of electricity stored, costs are dropping and systems are getting smarter and more integrated into the home, building, or utility application. According to the GTM/ESA report Hawaii is the largest market in the US, which makes sense because Hawaii has very high electricity costs (they have to import all their oil to generate electricity) and subsequently high rates of solar panel installations. With high rates of solar producing electricity during the day, the grid needs a way to "smooth" out the supply and demand curve throughout a 24 hour period. Smart energy storage can do just that; store up the electricity produced during the day and discharge it out during the night.
The graph shows residential energy storage as a sliver of the market in 2015, with the bulk of the traditional market going to the utility sector, however this is forecast to change rapidly. What is driving this change? Several factors; including the extension of the US Solar Investment Tax Credit (ITC) of 30%, the continued rapid growth of the solar energy market (due to rapidly falling costs and the extension of the ITC) , and multiple technology innovations from various companies, including the Tesla Powerwall. The Powerwall has, in a stroke, made residential energy storage cooler and sexier and easier to integrate into a home residential solar system.
Traditionally home battery systems really only made sense for users that were "off the grid", so to speak, because the batteries tended to be large (most frequently lead acid), required periodic maintenance, and forced the balance of system (BOS) to give up an additional 10% to 15% of efficiency in order to satisfy the line-size and voltage requirements of a battery storage system, thus decreasing the financial return on a given solar installation. For these reasons we at GetSolar would usually recommend against a battery storage component for the typical grid-tied residential solar system. The grid would act as the battery. As the technology improves, and most importantly the costs keep coming down, this may change very quickly. Indeed the GTM/ESA report forecasts big growth in this area over the coming years.
The newer technology currently in use is Lithium-ion battery, which the report says made up 96% of deployments. These batteries are integrated into "smart systems" that are programmed to take maximum advantage of the energy supply and demand for the building (or utility as the case may be), and can also act as a backup, depending on use cases. As the costs come down, and solar deployment continues, distributed energy storage will be an important part of the clean energy mix, and a more responsive, "smarter" grid.