Utilities See Value in Storage Alongside PV, and Will Pay

This article first appeared on the BNEF mobile app and the Bloomberg Terminal.

  • Hawaii co-operative turns to storage to integrate renewables
  • Solar plus storage PPAs are falling but system setups vary

Solar plus storage levelized costs of electricity (LCOEs), with varying solar to storage power output ratios

Source: Bloomberg New Energy Finance
Note: These all assume 30% ITC for all years. For underlying data and assumptions, see accompanying spreadsheet.

As utilities add more renewable energy, whether voluntarily or due to mandates, some are turning to energy storage to help integrate it. Alongside wind or solar, storage allows a utility to increase renewable energy generation despite the reduced need for either during peak generation hours. A common way of integrating storage has been via combined storage plus solar power purchase agreements (PPAs). In the U.S., these projects also may benefit from the investment tax credit, which would not otherwise be available to standalone storage projects. Although limited to a few instances to date, we expect the frequency of these deployments will increase, including beyond the U.S.

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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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