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July 2017

Solar-Plus-Storage: Architectures, Use Cases and Case Studies on the Grid

1Solar-Plus-Storage: Architectures, Use Cases and Case Studies on the Grid - July 2017 Whitepaper

Contents

1. Executive Summary 5

2. Key Drivers for Solar-Plus-Storage 8

3. Solar-Plus-Storage System Architectures 13

4. Solar-Plus-Storage Use Cases and Case Studies 17

5. Solar-Plus-Storage Outlook: CA and U.S. 25


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Ravi is the Director of Energy Storage at GTM Research, where he focuses on U.S. energy storage markets and value chain analysis.

As an industry expert, Ravi has been quoted in various publications including New York Times, Wall Street Journal, Washington Post,

Forbes, Bloomberg, Christian Science Monitor, Wired, and Verge.

Ravi has over 8 years of experience in energy storage as a consultant, analyst and engineer. Ravi holds a Master of International

Business degree from the Fletcher School at Tufts University, a Master of Science in Chemical Engineering degree from University of

Washington, Seattle and a Bachelor of Chemical Engineering degree from Institute of Chemical Technology, Mumbai, India.

About the Analysts

Brett Simon is an energy storage analyst at GTM Research, focusing on both U.S. and international behind-the-meter energy storage

markets. Prior to joining GTM, Brett earned a Master of Science degree in sustainable systems at the University of Michigan School

of Natural Resources and Environment. He first became interested in energy storage systems and their potential to revolutionize the

energy sector through his coursework and master's project. Brett also holds a bachelor’s degree in mathematics and environmental

studies from New York University.

Ravi ManghaniDirector, Energy Storage

Brett SimonAnalyst, Energy Storage

Solar-Plus-Storage: Architectures, Use Cases and Case Studies on the Grid - July 2017 Whitepaper

Executive Summary1.


Policy Supporting Solar-Plus-Storage Rising in Prominence Across U.S. to Prove Dispatchable DERs Can Provide Value Across All Levels of the Grid

Changes to utility rate structures, including the implementation of time-of-use rates and demand charges, coupled with the rollback or elimination ofNet Energy Metering (NEM) compensation are improving the case for storage. Hawaii is the ur-example in the U.S. today as the shift to the new self-supply tariff regime and high electricity prices set the stage for economic deployments of residential solar-plus-storage. Though a special case,Hawaii’s transition provides valuable learnings for other states that will inevitably grapple with rising solar penetration.

States across the U.S. are advancing policies to build storage markets. These includes procurement targets, incentives and pilot programs. These typesof market mechanisms are integral for kickstarting the states’ solar-plus-storage markets by providing both improved economics and opportunities toshowcase the value these systems can provide to both the grid and retail customers.

Solar-plus-storage system architecture remains an important consideration with the two options each best suited to specific conditions. AC couplingfavors retrofits, and will be important in markets where NEM disappears for existing solar systems, though this structure leads to a greater number ofconversions and therefore lower system efficiency. In contrast, DC coupling advantages new solar-plus-storage as a single inverter can be used forboth the solar and storage systems, though this does create a single point of failure.

Dispatchable Distributed Energy Resources (DERs) offer value on all grid levels, providing value streams for end customers (e.g. power quality,reliability, demand charge management), the distribution grid (e.g. voltage support, resource adequacy, distribution system investment deferral), andthe wholesale market (e.g. frequency regulation, voltage support, spinning/non-spinning reserves). Solar-plus-storage can thus offer value across arange of use cases, and when properly designed can act as a dispatchable resource.


Solar-Plus-Storage Pilots Lay the Groundwork for a Gigawatt-Scale Market by 2021

California, New York, Massachusetts and Vermont are advancing storage through pilot programs and working to illustrate the value the technologycan provide to both retail electricity customers and the grid. Some solar-plus-storage systems are already deployed and participating in programstoday, and will provide learnings to help future market design.

The grid-tied solar-paired-storage market is expected to reach 137 MW in 2017, compared to 47 MW in 2016. The market will grow at a 92% CAGRover the next five years, surpassing the 1 GW mark in 2021. By 2022, 15% of annually deployed behind-the-meter solar is expected to be paired withstorage, compared to 0.5% in 2016. Additionally, 15% of utility-scale solar will be paired with storage in 2022, compared to only 1.9% in 2016. Themarket will reach $4.4B in annual value by 2022, more than 11 times the size of the 2016 market ($396M).

California’s solar-plus-storage market continued its steady growth in 2016, reaching 10 MW of annual deployments (21% of U.S. market total). In2017, the market is expected to almost quadruple in size over 2016, reaching 38 MW of annual deployments. By 2022, California will account foralmost half of the U.S. solar-paired-storage market, and roughly 31% of behind-the-meter solar and 23% of utility-scale solar will be paired withstorage (compared to 1.1% and 5.5% in 2017, respectively).

While the whitepaper discusses only grid-connected solar-plus-storage drivers and markets, the behind-the-meter segment, in particular theresidential segment, has two other applications - off-grid and grid-independent backup. By various estimates, the U.S. off-grid solar market is about anannual 30 MW size market. GTM Research estimates that the grid-independent backup market is as much as four times the size of grid-connectedresidential market (1% of overall solar market in 2016), but not expected to grow as fast as the grid-interactive segment.


Key Drivers for Solar-Plus-Storage2.


Focus on Rate Design and NEM Proceedings

• Methodologies and results vary widely among studies

• Avoided energy and avoided capacity metrics are near ubiquitous and

represent the core traditional energy valuation factors

• Benefits and costs associated with transmission capacity, line losses,

environmental factors and ancillary service costs often calculated

• More than a dozen proceedings are either started, in process or

complete

Granularity at the Distribution Level Lacking

• Benefits and costs associated with distribution upgrades and feeder

capacities lack granularity and are listed as placeholders or are greatly

generalized

• Top-down valuations provide a good basis for evaluating low-penetration

solar on system-level peaks or zonal peaks, but provide no detail on more

granular substation or feeder-level values

Value-of-Solar Studies in Regulatory Proceedings

Selected Complete and In-Progress Value of Solar (VOS) Proceedings/Studies

Ancillary Proceedings Where VOS Raised

Basic Value of Solar Proceeding

System-Wide Value of Solar Proceeding

Locational Value of DER Proceeding

In-Progress Proceeding

- Regulator-/Legislature-Led Valuation

- Utility-Led Valuation

- 3rd-Party-Led Valuation

Source: GTM Research, Pace Energy & Climate CenterSource: GTM Research Unlocking the Locational Value of DERs, 2016


MT

WYID

WA

OR

NVUT

CA

AZ

ND

SD

NE

CO

NM

TX

OK

KS

AR

LA

MO

IA

MN

WI

IL IN

KY

TN

MS AL GA

FL

SC

NC

VAWV

OH

MINY

PA

MDDE

NJ

CT RI

MA

ME

VTNH

HI

Net Energy Metering/ Rate Reforms

Changes to Utility Tariff Structures and NEM Programs Open Doors for Solar-Plus-Storage

Net Energy Metering (NEM) program changes and utility ratereforms can have positive effects for solar-plus-storage,particularly in cases where NEM compensation is reduced oreliminated and when demand charges and time-of-use (TOU)rates are implemented. Notably:• California utilities PG&E and SDG&E both entered NEM 2.0 in

2016, which leads to lower compensation, non-bypassablecharges, and TOU rates which all encourage storage

• Hawaii filled its Customer Grid Supply cap in September 2016,only to reopen with 20 MW of capacity in early 2017, thoughonce filled all solar will be subject to zero export underCustomer Self Supply, necessitating undersized solar systemsor pairing with storage

• Nevada passed a bill to restore NEM for residential projects ata discounted rate in June 2017. Around the same time, thestate passed bills to investigate storage procurement targetsand storage incentives.

Source: GTM Research


MT

WYID

WA

OR

NVUT

CA

AZ

ND

SD

NE

CO

NM

TX

OK

KS

AR

LA

MO

IA

MN

WI

IL IN

KY

TN

MS AL GA

FL

SC

NC

VAWV

OH

MINY

PA

MDDE

NJ

CT RI

MA

ME

VTNH Net Energy Metering/

Rate Reforms

Grid Services Pilots, Procurements, and Incentives

Energy Storage Procurement Programs, Pilot Projects, and Incentives Build New Markets

Within the past year, a number of grid service pilots,storage procurement mandates, and incentive bills havemoved forward, opening the door for solar-plus-storage.Notably:• Maryland passed a storage incentive bill in May 2017• Massachusetts set storage target in June 2017 and is

working to add a storage incentive to its SMART solarprogram

• Nevada moved forward storage procurement andincentive bills in June 2017

• Vermont initiated the next phase of its Powerwallofferings and proposed a large scale solar-plus-storageproject

HI



Historical System Price Trends: Residential ($/kWh)

• Non-residential system prices held flat through most of

2015, but in mid- 2016 began to experience downward

pressure following a combination of increased

deployment volumes and manufacturing scale-ups. Q2

2017 low prices are 16% below Q2 2016 low prices.

• Residential system prices held flat from Q4 2014

through Q2 2016. However, in 2016, technology

innovation and greater deployment volumes began to

drive down low prices, which dropped by 15% in mid-

2016. However, the high and median prices remained

flat, as the market still remains in an early-adopter

phase, and competition between market players, while

heating up, has yet to significantly push down prices.

Nevertheless, proposed residential project prices under

Step 1 of the new SGIP program that opened in May

2017 indicates coming price declines when compared to

those submitted in 2016.

Non-Residential Storage Experienced 16% YOY Declines; Residential Held Mostly Flat



Historical System Price Trends: Non-Residential ($/kWh)

$1,500 $1,500 $1,500

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

Q2 2015 Q2 2016 Q2 2017

$1,100 $1,100$1,000

$600

$800

$1,000

$1,200

$1,400

$1,600

Q2 2015 Q2 2016 Q2 2017


Solar-Plus-Storage System Architectures3.


At the highest level, architecture represents the way that systems are structured to meet the customer needs. There are two fundamental architectural

decisions that drive ability to meet these needs.

The “coupling” of a system describes the way that the electricity source (in this case, the solar energy system’s electrical output) connects to the uses of

electricity (home electrical circuit, utility grid) and stores of electricity (battery system). The way a system is coupled has implications for cost, performance and

reliability.

For all solar plus battery systems, solar panels represent an energy source, and produce direct current (DC) output. Similarly, for all systems, there are three

potential ways to dispatch this energy: to change the DC energy into alternating current (AC) and feed it back into the electrical grid, to change the DC energy

into AC energy and feed it into appliances within the home via the home’s main panel, or to store the energy within batteries as DC for later use (either to

pump into the grid, or into the home).

AC and DC coupled approaches differ based on how the systems route the solar panels’ DC energy – specifically, whether it is immediately turned into AC, or is

it kept as DC until AC conversion is required.

Overview: DC- vs. AC-Coupling


In a DC coupled system, the DC energy from the solar energy system passes into

the battery via a charge controller. The charge controller ensures that the solar

energy system does not overload the battery, and provides Maximum Power

Point Tracking to optimize solar energy production. Hence, the charge controller

sits in between the batteries and the solar panels. If the system determines that

AC power conversion is needed, either to put into the grid or to provide usable

backup power to the home, then a battery inverter converts the DC energy from

the battery into AC.

If a homeowner does not have solar, they have the option to install a solar-plus-

storage system with a DC Coupled hybrid solar/battery inverter without having

to remove any existing solar inverters. Hybrid solar/battery inverters represent a

potential cost savings opportunity, when compared to purchasing and installing

separate solar and battery inverters, and also may reduce installation time and

complexity. The tradeoff is that there is one inverter covering both systems,

which creates a single point of system failure. Said another way, if the hybrid

inverter fails, the entire system fails. Having separate solar and battery inverters

ensures that, even if the battery inverter fails, the solar will still be running (and

vice-versa).

DC Coupled Systems Benefit New Solar-Plus-Storage Installations

Source: CivicSolar

DC Coupled System Architecture


In AC Coupled systems, the DC energy from the solar panels is immediately converted to AC.

If the energy then needs to be put into the home or grid, it can be fed directly. If the energy needs

to be stored in a DC battery, it then must be converted back to AC.

This is a significant tradeoff, as there is an efficiency loss of converting power between AC and DC

– each AC-DC (and DC-AC) conversion reduces efficiency by approximately 1-4%, depending on

the inverter. For energy that is directly fed into the battery, this “double-conversion” (converting

DC solar energy to AC, and then back) results in a net efficiency loss of approximately 2-8%.

However, there are also benefits to AC coupling. In AC systems, the inverter acts as the battery

charge controller. By removing this component, AC coupled systems reduce system cost - charge

controllers generally cost around $300, which represents approximately 1-8% of the BOM

(depending on the system size and application) - and remove a point of potential system failure.

If a homeowner already has solar and wants to add storage, then the homeowner has a different

set of tradeoffs compared to homeowners who want new solar in addition to storage. Since they

already have a solar energy system that is producing AC, these homeowners must AC couple the

battery system unless they want to bear the costs of ripping out the inverter, redoing wiring, and

putting in a new DC coupled system with a hybrid inverter. Existing solar homeowners must also

be conscious of compatibility between their solar inverters and the battery system they intend to

purchase – not all brands are compatible, so it is imperative to find a pair that can work together.

AC Coupled Systems Are Preferred Avenue for Retrofits

Source: CivicSolar

AC Coupled System Architecture


Solar-Plus-Storage Use Cases and Case Studies4.


Dispatchable DERs Can Provide Value Across All Levels of the Grid

ENERGY CHARGES

POWER QUALITY

UTILITY

PROGRAMS

RELIABILITY / RESILIENCY

DEMAND CHARGES

3rd PARTY

PROGRAMS

SYSTEM PEAK CHARGES

ISO/RTO

PROGRAMS

Customer Value Streams Distribution Value Streams

RESOURCE ADEQUACY

DISTRIBUTION

INVESTMENT DEFERRAL

LOADING / RELIABILITY

CAPACITY

VOLTAGE SUPPORT

FREQUENCY REGULATION

ENERGY

SPIN / NON-SPIN

RESERVES

Wholesale Value Streams

BLACKSTART

Distributed energy resources (DERs), including solar-plus-storage, can provide a wide range of values at three levels of the grid: the customer level (behind the meter), the distribution

level (utility) and the wholesale level (ISOs/RTOs in restructured markets).

Note: Value streams may not be readily accessible due to regulations and traditional business processes.

Value Drivers

• Retail electricity prices

• Retail demand charges

• Demand growth

• Wholesale capacity prices

• Wholesale energy prices

• Wholesale ancillary services prices

• Reformed markets for wholesale-level

value streams

• Emerging markets for distribution-

level value streams

Representative Value Streams for Behind-the-Meter Distributed Energy Resources

VOLTAGE SUPPORT

CONGESTION CHARGES

DISTRIBUTION LOSSES



Developer Value Streams AddressedBTM Resources

Aggregated

Demand charge savings, energy arbitrage, demand response, T&D deferral, resource adequacy

91.2 MW storage and load

Demand charge savings, energy arbitrage, resource adequacy, demand response

0.53 MW storage

Includes demand charge savings, T&D deferral, resource adequacy

10 MW storage and load

Includes demand charge savings, energy savings, T&D deferral, resource adequacy

35.6 MW storage and solar*

Demand charge savings, energy arbitrage, demand response, resource adequacy

86.35 MW storage**

Includes energy savings and resource adequacy 50 MW solar

Includes energy arbitrage and resource adequacy 5 MW storage

California has been the leader in procuring solar, energy storage and other forms

of DERs for grid applications such as demand response, deferral and resource

adequacy

• SCE’s Local Capacity Requirements RFO

◦ Advanced Microgrid Solutions, NRG, Stem and SunPower won capacity

contracts that require them to deliver behind-the-meter resources that

can run for a minimum of four hours per day for three consecutive days

• SCE’s Preferred Resources Pilot RFO

◦ Similarly, Advanced Microgrid Solutions, NextEra, NRG and Swell won


can provide four hours of continuous load reduction or, in the case of

solar-plus-storage, six hours of continuous load reduction

• Demand Response Auction Mechanism

◦ Advanced Microgrid Solutions, Green Charge Networks and Stem won


can bid into CAISO’s day-ahead energy market

1. California: Utilities Are Procuring DERs for Grid Services

* - Excludes front-of-meter projects, demand response and energy efficiency** - Excludes undisclosed amount of PG&E DRAM award



2. New York: Retail Rates, Regulators and Utility Procurements Drive DER Market

Even before New York’s Public Service Commission launched the Reforming the Energy Vision (REV) proceeding, the

state was primed to be a strong market for DERs. New York’s commercial solar market is the third largest in the

country, and the state’s energy storage market is among several high-activity markets outside of California. Though

indoor permitting challenges have initially slowed the deployment of Li-ion systems, opportunities for energy

storage and other DERs are already growing, supported by non-wires alternatives programs, New York City’s storage

goal, upcoming storage legislature, and new utility business models.

• Con Edison’s demand charges for commercial customers are the highest in the country among large IOUs

• The state’s average retail prices for commercial customers are also among the highest in the country

NYC Energy

Storage

Target

Non-Wires

Alternatives

Reforming the

Energy Vision

Retail Energy and

Demand Charges

• The REV proceeding, launched in 2014, is designed to restructure New York’s electricity market as a dynamic market at the distribution level

• Pilot projects under REV range from virtual power plants composed of residential solar-plus-storage, to front-of-meter energy storage

• In part driven by REV, but also driven by load growth and power plant retirements, every major investor-owned utility in New York has issued an RFP for non-wires alternatives to address network constraints

• The Brooklyn-Queens Demand Management Program is already responsible for several energy storage deployments

• In late 2016, New York City announced an energy storage deployment target of 100 MWh by 2020

• The target is the latest effort directed at improving resiliency in New York, which already has a statewide microgrid grant program

• Con Ed Brooklyn-Queens Demand Management (BQDM)

Program

◦ Energy storage providers Demand Energy, Green Charge,

Power Efficiency, Stem and Tarsier won contracts that

require them to provide four hours of load reduction when

Con Ed anticipates peak load in the BQDM area to be near

its summer peak forecast (expected to occur 3-6 times per

year); several demand response providers also won

contracts

• Con Ed Clean Virtual Power Plant REV Demonstration

(residential)

◦ Con Ed is partnering with Sunverge and SunPower to

aggregate residential solar-plus-storage systems to provide

grid services

• Con Ed Commercial Battery Storage (proposed)

◦ In another REV demo, Con Ed has proposed to deploy four

customer-sited, utility-owned 1 MW / 1 MWh systems for

T&D services and wholesale market participation



3. Massachusetts: 2016 Was the Year That Put MA on the Storage Map

Source: State of Charge Report – Massachusetts Energy Storage Initiative

Energy Cost Reduction

T&D Cost Reduction

Ancillary Services and Wholesale Market Cost Reductions

Reduced Peak Capacity

$275 M

$305 M

$397 M

$1,083 M

$219 M

Renewable Integration Cost Reduction

$2,288 M in total potential system

benefits

Potential System Benefits Highlighted by State of Charge

September 2016: State of Charge Study Released

December 2016: MA DOER Sets

Agrees to Storage Mandate

January 2017: Storage Incentive Proposed Under

SMART

March 2017: ACES Issued

June 2017: Mandate Target

Set

Several significant policies advanced in 2016 and early 2017,moving Massachusetts into the energy storage spotlight. The Stateof Charge study kicked off the rush, analyzing the value storagecould provide for the state. Not long after, the MassachusettsDepartment of Energy Resources (MA DOER) passed a billagreeing to set a storage mandate, with a level of 200 MWh by2020 set in late June 2017. Several other initiatives, such asincluding storage incentives under the SMART solar program andthe ACES solicitation which seeks to back storage deployed in MAreveal a clear push to extract benefits from this technology. Thus,MA is poised to be a significant solar-plus-storage state in thecoming years.


System Sale/LeaseCash TransactionGrid Service

Option 1 Option 2 Option 3

$6,501/customer Total = $488K

4. Vermont: Green Mountain Power to Use Behind-the-Meter Storage to Reduce Peak Capacity and Transmission Costs

Forward Capacity Market (75%)Transmission Costs (50%)Total benefit = $81K per year

75 225 200

Total Grid Services Benefits = $205K per year

$6,501/customer Total = $488K

Forward Capacity Market (100%)Transmission Costs (70%)Total benefit = $124K per year

Rate rider = $37.5/month/customerTotal = $91K per year

Bill credit = $31.8/month/customerTotal = $81K per year

Source: Green Mountain Power, GTM Research

In January 2016, Green Mountain Power began offering the Tesla Powerwall for its customers. This diagram outlines the expected benefits from thedeployment of 500 of these systems. A second stage of the program, with 2,000 Powerwall 2s, was initiated in May 2017.


• Building off learnings from the first phase of its residential storage

program, and seeking to advance its commitment to innovative energy

business models, Green Mountain Power initiated a proceeding in April

2017 to add 1 MW/4 MWh of battery storage to the Panton Solar

Project.

• GMP’s analysis found benefits in four major project categories: energy,

capacity, transmission (aka Regional Network Service, or RNS), and

regulation. Total benefits were estimated at $3.9M, with the bulk

coming from RNS followed by capacity.

• Project would additionally add value for GMP customers, as the project

would help minimize net power costs and provide grid resiliency

benefits during planned outages and emergency events.

• Additionally, Green Mountain Power has three other 5 MW PV and 2

MW/8 MWh storage microgrids proposed in its rate proposal.

4. Vermont: GMP’s Panton Project Builds Next Phase of Solar-Plus-Storage

$1,516,707

$1,434,251

$785,172

$116,112

RNS

Capacity

Regulation

Energy

Source: Green Mountain Power, GTM Research

Panton Battery Storage Benefits ($)


$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

TOU Shifting Grid Services Demand ChargeManagement

Self-Consumption Total Value Net Economic Value System Price

Pric

e/Va

lue

($)

• Residential energy storage lacks clearly monetizable value streams, causing reticence from financiers to back residential projects. While one value stream may not be sufficient for

making a deployment economical, stacking multiple value streams within a single project may yield a positive NPV. As Time-Of-Use (TOU) rates and residential demand charges

increase in frequency, while NEM programs roll back encouraging self-consumption, there will be greater opportunities for stacking value within solar-plus-storage projects.

• Grid services programs are offering a new avenue to monetize behind-the-meter storage. For example, several U.S. utilities including Con Edison and Green Mountain Power are

exploring virtual power plant pilot projects employing residential storage, while residential storage achieved its first procurement win under SCE’s Preferred Resources Pilot Program

with a 5 MW/20 MWh award in September 2016.

5. Value Stacking Provides Greater Opportunity For Monetizing Storage Projects

Source: GTM Research. Note the values above are representative and do not correspond to actual value from value stream modelling.

Residential Value Stream Stacking


Solar-Plus-Storage Outlook: CA and U.S.5.


5 5 4 4 18 47137

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Percentage o

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(M

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Behind-the-Meter Deployments (MW) Utility-Scale Deployments (MW)

% of Behind-the-Meter Solar-Plus-Storage Installations % of Utility-Scale Solar-Plus-Storage Installations

The U.S. grid-connected solar-paired-storage market tripled in 2016; it grew from 18 MW in 2015 to 47 MW last year. The behind-the-meter sector, particularly non-residential segment, was responsible

for most of this growth, accounting for 46% of total deployments, while utility share dropped from 80% in 2015 to 54% in 2016.

Behind-the-meter solar-paired-storage is set to grow at a much accelerated pace in the next five years, growing at a compounded annual growth rate of 92% from 2016-2022. By 2022, behind-the-

meter solar-paired-storage will cross the 1 GW mark with 1.1 GW of annual deployments. Behind-the-meter penetration in terms of percentage of solar installations that are combined with grid-tied

storage will grow from 0.5% in 2016 to 1.8% in 2017 and reaching 15% in 2022.

Utility-scale solar-paired-storage is set to more than double in 2017 to 58 MW, and continue its growth at a compounded annual growth rate of 56% from 2016-2022. By 2022, utility-scale solar-paired-

storage will cross 300 MW. Utility-scale penetration in terms of percentage of solar installations that are combined with storage will grow from 1.9% in 2016 to 15% in 2022.

U.S. Grid-Tied Solar-Paired-Storage Deployments to Cross 1 GW by 202131X Growth from 2016


U.S. Annual Solar-Paired-Storage Deployments, 2011-2022E (MW)


California grid-connected solar-paired-storage market continued to grow at a steady pace in 2016, reaching 10 MW of annual deployments (21% of the total U.S. market). Unlike the U.S. market

however, it was dominated by behind-the-meter segment in 2016. By 2022, California will account for almost half of the U.S. solar-paired-storage market at 45%.

Behind-the-meter solar-paired-storage is set to triple in 2017 to 28 MW and grow by 140% in 2018 to 68 MW. By 2022, behind-the-meter solar-paired-storage will cross 560 MW of annual deployments.

Behind-the-meter penetration in terms of percentage of solar installations that are combined with grid-tied storage will grow from 0.2% in 2016 to 1.1% in 2017 and reach 31% in 2022, largely at the

back of anticipated NEM 3.0 rules.

While there were no utility-scale solar-paired-storage deployments in 2016, the segment is expected to grow to 10 MW this year, and double to 20 MW in 2018. By 2022, utility-scale solar-paired-

storage will reach 100 MW. Utility-scale penetration in terms of percentage of solar installations that are combined with storage will grow from 5.5% in 2017 to 23% in 2022.

California Grid-Tied Solar-Paired-Storage Deployments to Reach 661 MW by 202267X Growth from 2016

California Annual Solar-Paired-Storage Deployments, 2011-2022E (MW)

0 3 1 3 4 10 3888

173

302

452

661

0%

5%

10%

15%

20%

25%

30%

35%

0

100

200

300

400

500

600

700

2011 2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E 2021E 2022E

Percentage o

f Solar-P

lus-Sto

rage In

stallation

s/Total So

lar In

stallation

s

Cal

iforn

ia S

ola

r-P

lus-

Sto

rage

D

eplo

ymen

ts (

MW

)

Behind-the-Meter Deployments (MW) Utility-Scale Deployments (MW)

% of Behind-the-Meter Solar-Plus-Storage Installations % of Utility-Scale Solar-Plus-Storage Installations



The U.S. solar-plus-storage market (in USD) grew by 390% in 2016, industry’s biggest year-over-year growth. In 2017, the market will continue to grow at a healthy pace and more than double to over

$800 million annual market. The market will cross the billion mark in 2018, and continue to grow at a compounded annual growth rate of 49% from 2016-2022, reaching $4.4 billion by 2022.

The utility segment was the largest segment in 2016, due to the size of the associated solar PV projects, and will hold more than 50% of market revenue share this year. From 2018, the utility segment

will no longer be the largest segment, and continue to see reduced market shares, and reach 34% by 2022. During this period, utility segment solar-plus-storage revenues will continue to grow, and will

be a $1.5 billion market in 2022.

Behind-the-meter solar-plus-storage segments will continue to grow and starting in 2018 will account for over 50% of the market. By 2022, the annual behind-the-meter market will be $2.9 billion.

U.S. Grid-Interactive Solar-Plus-Storage to Become a $4.4 Billion Annual Market in 2022

U.S. Annual Solar-Plus-Storage Market Size, 2011-2022E (Million $)

$366$152 $76 $52 $81

$396$833

$1,165

$1,818

$2,479

$3,347

$4,372

$0

$1,000

$2,000

$3,000

$4,000

$5,000

2011 2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E 2021E 2022E

An

nu

al S

ola

r-P

lus-

Sto

rage

M

arke

t Si

ze (

Mill

ion

$)

Behind-the-meter (Million $) Utility (Million $)



In this whitepaper, we have only discussed the drivers and size of grid-interactive solar-

plus-storage market in the U.S. There are two other solar-plus-storage market segments

that often got overlooked in the glamour of covering net energy metering rate reforms,

new and flashy product launches at a seemingly breakneck pace, and lack of reliable utility

interconnection data. These two segments are off-grid and grid-independent backup.

Off-grid: Due to the lack of utility interconnection data, this segment is rarely reported on.

However, by 2006 there were approximately 180,000 off-grid homes in the U.S. While off-

grid market growth rate has slowed down in the past decade, as grid-tied solar has taken

off. By various estimates, the U.S. off-grid solar market is about an annual 30 MW size

market, but has stagnated in recent years.

Grid-independent backup: It is important that there is no monolithic definition of what

“backup” is – it fully depends on which loads people want to back up and for how long

they want the backup to last. Every system is customized based on the loads people want

to back up. Batteries can provide essential loads or whole home backup. The duration that

backup power will last with a solar attached battery system depends on the home load

(how much power is being drawn) and how much solar electricity is being generated.

There is rarely any reliable data on grid-independent backup, as several systems are

deployed as retrofits, or deployed as part of solar interconnection application. GTM

Research estimates that the grid-independent backup market is as much as four times the

size of grid-connected residential market (1% of overall solar market in 2016), but not

expected to grow as fast as the grid-interactive segment.

Note: U.S. Off-Grid and Grid-Independent Back-Up Markets

0

10

20

30

40

50

60

70

80

2016 2017E

Res

iden

tial

So

lar-

Plu

s-St

ora

ge S

egm

ents

(M

W)

Grid-Tied Off-Grid Grid-Independent Backup


Prepared For:

July 2017

Solar-Plus-Storage: Architectures, Use Cases and Case Studies on the Grid

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