Because energy storage has so many benefts, the answer
will vary depending on the region. Globally IHS Markit predicts that half of future additions in the next decade will
take place behind the meter. This trend is part of a major
shift towards decentralized power generation, with individuals and businesses producing their own energy as
equipment costs fall.
In developed countries, households will lead the way
and we expect strong residential growth in Australia,
Japan and Germany owing to high retail electricity prices,
favorable legislation and incentives. This will have impli-
cations on the utilities’ business models and we’re already
seeing the impact in Australia where local utilities have started offering solu-
tions that include solar and batteries.
In developing economies where grid reliability is uncertain and load shedding occurs daily, we anticipate that businesses and industrials will turn
to hybrid diesel-storage and solar solutions. The role of utility-side of meter
energy storage is currently driven by ancillary services but is uncertain in
the long-term. For this segment to become mainstream it will require changes in power market designs to create a level playing feld with gas, demand
response and transmission. The role of gas-fred power plants, dictated by
gas prices and utilization rates, will also determine the ultimate cost-compet-itiveness of batteries.
Energy storage will have the biggest impact on the residential sector, which could in turn transform the utility sector.
Nowhere is this more apparent than in Arizona, where residential customers are facing mandatory demand charges
for the frst time and are concerned about resulting higher electricity costs. Residential storage offers customers a
clear pathway to reducing or avoiding demand charges and
similar fees.
As greater numbers of cost-conscious residential cus-
tomers seek out energy storage, utilities are primed to join
in and reap their own benefts. Grid-friendly residential
storage solutions (especially when paired with DERs) provide fexibility and
control to utilities that allow for grid stabilization and peak shaving, which is
benefcial to both parties.
Recent data shows that residential solar is the fastest-growing category
by number of installations. Even a modest share of residential adopters opting for grid-friendly storage would lay the foundation for a more fexible and
Harumi McClure
President/COO of
Tabuchi Electric
Marianne Boust
Principal Analyst,
Energy Storage, IHS
Markit
