HOW THE US SOLAR INDUSTRY IS EVOLVING WITH ENERGY STORAGE IN PLACE
June 26, 2020
The solar industry in the US is evolving even with the constraint put on it by the administration in the guise of import tariffs. Although the tariffs have cost approximately 62,000 jobs and lost almost $20 billion in private investment, the industry still employs about 242,000 people and generates tens of billions of dollars of economic value. And the PV installation growth is significant along with the energy storage solutions.
The US had deployed over 2 million solar PV systems and have generated an estimated capacity of 100 TWh of electricity by the end of September 2019. Paring solar systems with energy storage has seen such tremendous results and PV capacity in the country is expected to more than double over the next five years.
The energy grid in the US has shown the capability to successfully absorb the variable nature of solar PV’s output in most of the locations. Even in some places like California where solar generation during the day is much higher than the demand, leading that wholesale electricity prices to go negative. However, during the night hours, the energy generation reduces but demand increases. Such a scenario has made pairing solar plants with energy storage a necessity.
Although the demand for energy storage has increased significantly over the years, energy storage prices are still too high to move most of the energy around. Although Hybrid solar + storage plants are working as a solution to this challenge, the nation is waiting for the prices to come down a bit to adopt green energy plants.
At the end of 2018, the US ranked second in terms of solar PV deployments behind China, and by 2050 20% of world’s total deployment of solar is expected to be located at North America and energy storage will play a major part in this scenario.
It is from the past that we take the lesson and draw hope for the future. Considering that, we must highlight that U.S. energy storage installation topped 522.7 megawatts in 2019. And although the growth is expected to take a damaging blow due to COVID-19 crisis, given residential installations doubled (in 2019) year-over-year to 40.4 megawatts in 3 consecutive quarters in comparison with the previous year we can expect that the home battery sector is expected to deliver most striking growth in next 5 years.
Incredible solar + storage demand and adoption rate (residential and commercial segments) in California has helped the state to retain its dominant position and expected to fare well in the coming future. Additionally, new growth trajectories are expected to be seen in emerging markets such as- Massachusetts, Hawaii and New York. Currently, eight states in the US have utility-scale storage facilities close to 50 megawatts and another 11 states have nearly 10 megawatts energy storage facilities each. Considering that the investment in energy storage in the US totalled to $712 million, it is expected that the investment would reach $1-2 bn post-COVID-19.
Energy storage is a part of green energy transition and in the US it is being recognized as such, which predicts a sustainable future for the US in a shorter time frame than previously expected.