The United States installed 5.8 megawatts of energy
storage systems during the first quarter of this year, a 16% bump over
the same period a year ago, according to a report released by GTM
Research and Energy Storage Association on Thursday. Those energy storage systems are mostly lithium-ion batteries, the
type that can be found in consumer electronics and electric cars.
They
have come to be the preferred technology because they are already in
mass production. Even then, lithium-ion batteries remain pricey, in
absolute terms and relative to how much most people pay for electricity
these days. A lithium-ion system sized for a home or business can run thousands or tens of thousands of dollars. SolarCity is selling a 10 kilowatt-hour system made by Tesla Motors TSLA -0.32%
for $7,140, which includes all the equipment and installation. It’s
also offering a 9-year lease for the same system to customers who want
to both energy storage and solar panels. The battery system lease
requires a $5,000 upfront payment.
Energy storage current makes more sense for businesses because utilities typically levy a “demand charge”
to help ensure that they have enough power generation capacity on hand
to meet demand. Electricity demand can vary more widely for commercial
and industrial operations than homes.
The demand charge can change and often much higher during hours of
strong energy demand, and the charge could make up as much as 50% of a
business’s monthly bill. It could then make more sense for a business to
install a battery system that banks electricity when rates are low and
discharges the energy for onsite use when the rates are high. The
economics aren’t nearly as attractive for homes, and for that reason
energy storage is marketed mostly as backup power.
The energy storage market is young, and most of the equipment
installed these days aren’t located at homes or businesses. In fact, 72%
of those installed, or 4.2 megawatts, in the first quarter are
installed to directly help utilities or electric grid operators maintain
the proper voltages and the supply and demand of the grid. These
projects are typically called “ in front of the meter” installations.
By 2018, though, more energy storage systems will land at homes and
businesses than in front of the meter, including government buildings
and universities than those dedicated to regulating the electric grid,
said Ravi Manghani, a senior energy storage analyst and lead author of
the report. Between the two market segments, commercial projects will
likely make up 60% of the installations by then while residential
systems account for the rest.
Here is a chart that gives a good snapshot of the early, regional markets:
