Solar power is no longer confined to daylight hours. Thanks to a wave of investment, solar farms across the US are increasingly being built with industrial-scale battery packs on site so that noontime surpluses can be stored for release in the evening hours when people come home to switch on lights, appliances and air conditioners. Fund managers, power producers, utilities and energy-hungry tech companies are among those making big financial commitments to “solar-plus-storage” projects, introducing a helpful cushion for America’s finely balanced electricity markets and easing the way for a sharp rise in renewable generation.
Announcements are coming thick and fast in states from California to Florida – the latest last week when the Tennessee Valley Authority, a federal agency known for hydroelectric dams and coal and nuclear plants, announced a 200MW solar project tied to a 50MW battery system in Mississippi. Such projects have become economical after a 77 per cent decline in solar panel prices and an 87 per cent fall in lithium-ion battery prices over the past decade, said research group BloombergNEF and the Business Council for Sustainable Energy. Some projects are now able to offer power at prices lower than natural gas-fired plants.
“The market has really exploded,” said Rob Gramlich, president of Grid Strategies, a consultancy. “It’s been a dramatic expansion, and has surprised everybody”. Government policy has also stoked investment. Batteries installed alongside renewables will earn a US tax credit. Battery operators have been allowed to sell power on the wholesale market, thanks to a rule passed in 2018 by the US Federal Energy Regulatory Commission. Some states require utilities to install storage.
Battery capacity in the US, the largest market, is set to more than double this year to about 4,800MW and surpass 32,oooMW by 2025, BNEF said in its latest forecast – enough power to serve about 26m American households. But capacity forecasts are still only a fraction of the US’s more than 1m MW in electricity generating capacity. “It’s a drop in the bucket,” said Gary Ackerman, former executive director of the Western Power Trading Forum, an industry group.