Two recent announcements foreshadow the emergence of the residential solar PV plus energy storage markets in the United Kingdom. Both E.ON and EDF Energy announced plans to launch solar plus storage programs. My colleague’s recent blog highlights the costs and self-consumption values of these offerings. I focus on how these announcements also exemplify three key drivers for the deployment of distributed solar PV plus energy storage:
- Energy storage makes solar PV dispatchable. Energy storage addresses the greatest issue associated with solar PV: standalone solar PV systems only generate electricity when the sun is shining. Both E.ON and EDF Energy recognize that energy storage is a unique resource that can function as both generation (when discharging) and load (when charging).
- Business and finance models are accelerating market adoption. Utility service vendors are now taking lessons from solar PV developers and finding simple, money-saving distributed energy supply and financing models that appeal to customers.
- The long-term value proposition for energy storage is strongest behind the customer meter. These offerings portend the possibility that E.ON and EDF Energy could add these solar PV plus energy storage installation to virtual power plant (VPP) software technology in the future to participate in ancillary services markets.
These new announcements, indicative of the drivers outlined above, create value for the utility customers and service vendors in three ways:
- Residential retail electric choice customers can now access onsite backup power by means of a no-money-down option that can ramp to full capacity much faster than conventional resources for customer backup power.
- By offering financing for these solar PV plus energy storage systems within the United Kingdom’s residential retail choice market, EDF Energy can now retain customers for a longer term than with traditional short-term, retail choice electricity supply contracts.
- These types of battery energy storage-enabled distributed energy resources systems can create the potential for a future dispatchable VPPs. VPPs can maximize the grid value of self-generated solar electricity by customers to allow grid operators to minimize carbon-intensive peak energy generation and manage potential grid edge distribution system challenges.
Navigant Research recently highlighted global residential solar PV plus energy storage drivers in detail in our report titled Distributed Solar PV Plus Energy Storage Systems. Given these recent UK market developments, Navigant Research anticipates that more of these types of innovative, customer-focused utility services offerings will come to the marketplace.