Solar In Context

The addition of affordable storage for solar power radically changes the market dynamics.

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What made Apple’s iPod a winner was business context. There were plenty of other MP3 players on the market and Apple’s wasn’t particularly noteworthy from a technology standpoint. But rather than just sell another portable music machine, the company created something its competitors didn’t have—iTunes. In fact, it was iTunes that made the iPod, not the other way around.

The same thing is happening in the photovoltaic world, although it’s uncertain exactly which company will win the battle. Instead of just hooking solar panels into the power grid, the next wave is PV coupled with energy storage. According to IHS iSuppli, the global market for residential energy storage will grow from almost nothing last year to 2.5 gigawatts in 2017.

This is big news in the PV world and it changes the fundamental dynamics of solar energy. Solar is a way to generate electricity for the grid, but it has never been seen as a possible replacement. By adding local energy storage, which is slowly improving, the ability to power a home or business through the night becomes a real possibility.

That has several effects. First, it decentralizes the power generation, making it far less disruptive if there is a power outage caused by anything from a burned out transformer to a terrorist attack. Second, it adds incentives for people to live within a power budget and not waste electricity. And third, it opens up a huge market for new semiconductors to more effectively manage what will now become localized grids, similar to what some of the new home heating and cooling monitors are providing.

In addition, it likely will spur new sales of solar. If PV panels can indeed provide electricity independently of a utility company, that becomes a much better option than worrying about when a utility company will repair an outage. For companies, this can mean the difference between staying productive and employees finding their way to the door with battery-powered lights. And for residences, it means much greater independence—at least in places where there is sufficient sunlight.

But the storage approach also works for wind, water and geothermal power. And it adds new incentives to invest in research in solar, batteries, power management and the communications infrastructure across which this kind of information will travel. For the first time, solar will have a business context. It’s one that’s long overdue.

—Ed Sperling