5 Ways Lower Storage Costs Will Affect Solar Deployment

5 Ways Lower energy Storage Costs Will Affect Solar Deployment

Ever since 2015, when solar started being added at scale every year, all stakeholders have known the biggest challenge it will ultimately face. Intermittency. Or more simply, what to do when the sun goes down. That is why cheap and efficient storage has been considered almost like the golden key that will unlock solar possibilities way beyond what was conceived by the most optimistic users a decade back.  According to a Mckinsey study, the cost of a 1 MW energy storage system with a 1 hour duration by segment, in $per kWh /%age change, fell from $2100 in 2012 to $587 by 2018. This cost is now touching $152 according to Bloomberg NEF, for a Lithium Ion battery pack. With multiple other technologies beginning to move out of labs to actual production, there are expectations of the price touching as low as $120 by 2025.

Thus, as power storage technologies improve and battery densities increase, solar stands to benefit the most from it, being the dominant renewable energy source outside Hydro today. Today, we’re going to be going over the 5 ways storage costs going down will affect solar deployment.

5) Personal Use

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The ultimate solar dream for regular consumers is to be able to use solar to go off the grid. In places with high energy prices or regular power cuts, cheaper and denser batteries will go a long way in encouraging solar adoption. While some notable examples can already be seen in countries like Australia, lower battery costs can mean higher rates of solar adoption in second and third world countries as well. Pakistan is a good example of a country where high grid power and poor supply has meant many have gone with a solar+storage solution. Even if consumers don’t wish to go off the grid, the idea of solar acting as a failsafe for when the power goes out is extremely popular, as is evident by the Tesla Solar Roof including power storage with its solar solution.

4) Science

Scientific machinery tends to require a lot of power. For example, running simulations can require computers that can pull multiple kilowatts. The work being done by these machines is extremely important and as such needs uninterrupted power. Lower battery costs can make solar a viable use case for researchers in remote areas with poor connectivity, which can cut down time wastage during research. Thus, solar with cheap storage could actually make such research affordable for many now.

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3) Industrial Applications

A lot of industries have to transport raw material over long distances to produce value added products, mainly due to the lack of power or connectivity at the source. Lower solar power storage costs would mean that remote areas can be considered for setting up of industrial plants, furthering the economies of remote areas and providing employment. This would also lead to massive amounts of solar adoption, considering the amount of energy required by even small factories.

2) Servers

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Servers are the internet’s backbone. And servers get HOT. Hot enough for google to pipe ocean water into their data centers to keep the server machines cool. The issue is, these places generally don’t have the best infrastructure for electricity, which is where Solar comes in. With battery costs going down, a better option for companies would be to invest in solar lest they risk a brown-out from inconsistent power. Thus, the whole data centre industry, which is growing furiously as we write, could benefit in going green with this option.

1) The Energy Importers

A lot of countries import their electricity. Italy imported a whopping 13.5 twh in 2023, which likely cost them a hefty premium. Lower storage costs could allow these countries to implement solar more effectively and be less dependent on the main electricity producing countries. The money saved could go to bettering public services, which no one would complain about. This is by far the biggest proponent for solar, considering the amount of influence and capital it has behind it.