Distributed Solar and Storage Technology Roadmap

Distributed solar and storage could play a key role in reducing emissions, strengthening grid resilience and improving energy access. The future of these technologies is explored in this roadmap, commissioned by the Innovation for Cool Earth Forum (ICEF). The focus lies on solar and storage technologies for individual buildings and community microgrids (as opposed to large-scale utility owned systems). The study identifies drivers, risks, barriers and opportunities that will determine whether solar and storage can fulfill their potential.

Click here to download the Distributed Solar and Storage Technology Roadmap.

Key findings include:

  • Differing pathways for solar and storage in mature and emerging markets
    • In mature markets the primary driver for distributed solar and storage is reduced costs. The incentive for a consumer or community to invest in the technologies is to reduce utility bills. As a result, solar is the lead technology, and the addition of storage is primarily intended to increase the number of solar-generated kWh that can be consumed, increasing financial benefit.
    • In emerging markets the primary driver is grid intermittency. Consumers are incentivised to buy a storage system to allow them to enjoy uninterrupted power – the addition of solar enhances this value proposition by supporting the storage system in providing power for a longer period of time.
  • Japan and Germany are poised to be early-movers on distributed solar and storage

Japan and Germany have both established momentum as early markets for solar and storage due to a combination of high electricity prices and supportive regulation. The development of these markets will result in innovation that will have a global benefit. Japan has a substantial battery manufacturing industry that will continue to develop with the domestic market. Germany is seeing the emergence of new solar and storage business models. These countries both carry the burden of first-mover disadvantage and it may be that other countries ultimately benefit from lessons learnt in those markets.

  • The United States market is more fragmented, but could overtake in the long run

California and Hawaii are now seeing some of the highest penetrations of solar in the world. The immediate challenge for solar and storage in the US, however, is the prospect of continued low natural gas prices and, as a result, cheap electricity. Nevertheless the country’s advanced start-up scene is already developing sophisticated aggregation mechanisms for distributed solar and storage while companies such as Tesla are also leveraging the link between electric vehicles and storage with the recent launch of the PowerWall residential battery system.

  • China is prioritizing utility-scale solar, but distributed solar and storage could grow.

China is currently in the process of drafting its 13th Five-Year Plan and the most recent guidance documents suggest that although there is support for distributed solar, the emphasis for storage is on utility-scale applications that support reliability. If there is a future for rooftop and community solar and storage bundles in China, it will begin in the commercial and industrial sectors, where electricity prices are highest.

  • India is well placed to be a leader, but there are potential barriers

India already has a growing sector dedicated to the installation of lead-acid batteries to manage grid intermittency and is therefore well-placed to apply its domestic experience in foreign markets. However as the electricity sector grows and regulation develops it is crucial that the central and state governments implement policy frameworks that enable profitable and sustainable business models by both the state-owned entities and the private sector. Quality standards and warranties would help support investments in distributed solar and storage technologies.

For more information on the Distributed Solar and Storage Technology Roadmap, please visit http://www.icef-forum.org/roadmap.php

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Bloomberg New Energy Finance (BNEF) is an industry research firm focused on helping energy professionals generate opportunities. With a team of experts spread across six continents, BNEF provides independent analysis and insight, enabling decision-makers to navigate change in an evolving energy economy.
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