Currently the smallest part of the global solar energy storage business, the commercial sector is projected to expand by a factor of 700 in the coming years and become the largest market segment in 2017, says a report by IHS.
Global installations of photovoltaic storage systems for commercial use are set to rise to 2.3 GW in 2017, up from 3.2 MW in 2012, the report says. This will increase the commercial segment's share of PV installations to 40% in 2017, up from 5% in 2012.
‘Just last year, commercial was the smallest market for PV storage systems – far behind the residential and utility-scale segments,’ says Abigail Ward, PV analyst at IHS. ‘However, facing rising energy prices and the growing need for backup power supplies, commercial enterprises are turning to PV storage solutions that work in concert with their solar-power systems. This will allow commercial to surge past residential and utility to become the largest market for PV storage in just four years.’
IHS says the major reason a commercial enterprise installs an energy storage solution is the desire to intelligently manage the use of PV energy to reduce electricity cost. An energy storage solution can be used to shift PV energy from when it is generated for on-site use during periods when these charges apply. PV energy storage in commercial applications also can provide backup power in regions where there are weak and unreliable grids.
According to the report, concerns about energy rates and grid reliability are prevalent in the North American commercial market. Consequently, North America is expected to lead the world in commercial PV storage, accounting for more than 40% of installations in 2017.
IHS says storage in these applications will also be encouraged by the California Self-Generation Incentive Program (SGIP), which provides a financial subsidy against the upfront cost of an advanced energy storage system. Installations, likewise, will be boosted by California Energy Storage Bill AB 2514, which includes targets for investor-owned utilities to procure by 2020 a given amount of energy storage in its electricity network, including individual targets for the customer markets, according to the report.
The report identifies Japan as another lucrative region for commercial PV energy storage because electrical blackouts are common following the Fukushima nuclear disaster. Also on a fast growth track is Germany, where self-consumption of PV energy is becoming increasingly financially attractive.
The size of the commercial PV energy storage segment now is limited by the small number of suppliers and products serving the segment, IHS says.
‘At present, many of the suppliers active in the PV storage business are targeting the residential PV market, where systems are largely being installed to increase the on-site self-consumption of a PV system owner,’ Ward says. ‘However, installations in the commercial PV sector potentially can reach the point of payback much more quickly than those in the residential area. This will encourage many PV storage suppliers to enter the business in the coming years.’