Co-Located Solar Plus Storage Expected to Dramatically Increase: Study

In conjunction with the Nevada Commission’s approval of the solar plus storage proposal, a new study examines the market for solar-plus-storage resources.

Solar Plus Storage Study

In a regulatory order issued on December 4, 2019, the Public Utilities Commission of Nevada approved three “solar-plus-storage” purchase power agreements (PPAs), including one that will be the world’s largest battery project with a capacity of 380 MW/1,416 MWh. The Commission’s approval relied in part on analyses from the Brattle Group, which included an October 2018 study on the economic potential for solar and energy storage in Nevada, as well as expert testimony before the Commission by Principal Ryan Hledik.

In conjunction with the Commission’s announcement, Brattle economists have released a new study that examines the market for solar-plus-storage resources. The study notes that co-located solar-plus-storage deployments are expected to increase dramatically in the next couple of years. According to the study, solar-plus-storage already accounts for over 40 percent of all capacity in the California ISO interconnection queue and is experiencing sizeable growth in the PJM queue as well.

According to the study, the favourable economics and policies that have driven this trend toward co-locating energy storage with solar PV include:

  • Demand for a firmed solar generation as a capacity resource (and growing reluctance to contract for new gas capacity) is evidenced by recent utility procurements.
  • Efficiencies of co-location reduce costs and increase revenues of solar-plus-storage investments.
  • Declining costs of both solar and storage make the hybrid resources increasingly competitive with other resources.
  • The Federal Investment Tax Credit (ITC) provides up to a 30 percent reduction in storage costs if paired with solar.
  • State solar and storage mandates prioritise the deployment of those resources, reflecting priorities of policymakers and regulators.

“We expect that the continued need for firm capacity, flexibility, and clean energy, in conjunction with co-location benefits, will allow solar-plus-storage projects to remain competitive with other resources despite ITC uncertainty,” noted Hledik. “However, improved solar-plus-storage sizing and dispatch strategies will be needed as standalone storage becomes more competitive with hybrid projects.”

The study also provides several recommendations for utilities, developers, and regulators when evaluating solar-plus-storage development

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Ayush Verma

Ayush Verma

Ayush is a staff writer at saurenergy.com and writes on renewable energy with a special focus on solar and wind. Prior to this, as an engineering graduate trying to find his niche in the energy journalism segment, he worked as a correspondent for iamrenew.com.

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