Energy Storage Midyear Snapshot

We want to update our friends, partners and customers on the latest trends in energy storage. At the end of 2018, we wrapped up the year with a reflective article on the five most significant trends in energy storage and predicted how those trends would play out in 2019. As we are now halfway into 2019, we report on current trends in the industry and whether or not our 2018 predictions held true. We hope you enjoy this mid-year snapshot!

Trend 1: As Electric Vehicles Become More Common, there will be an Increasing Need for Solar Plus Storage

2018 Q4 Summary and Prediction: At the close of 2018, we saw a growing number of Electric Vehicles (EVs) and EV charging infrastructure, and we expected to see that trend continue into 2019. 

2019 End of Q2 update: 

  • In Q1 of 2019, 48 states and the District of Columbia initiated a total of 485 actions in support of statewide increases in EVs and EV charging station infrastructure. 

  • This action taken by states in Q1 alone surpassed total state activity in 2018. 

    • EV charging infrastructure requires a greater need for solar plus storage to shave peak demand charges during busy rush hour commutes. 

  • One significant way states took action was through authorizing public utilities to provide charging stations and recover the cost as a means to increase the number of EV charging stations deployed.

    • In 2019 Public Service Commissions in Missouri, Wisconsin, Maryland and Colorado have all taken steps to re-examine or authorize utility ownership of EV charging stations. 

  • The second significant way states took action was through state consideration of aggressive statewide EV targets.

    •  In Q1 of 2019, Hawaii, Oregon, Connecticut, Rhode Island, Massachusetts, New Hampshire and Washington have all either proposed or passed bills that would set statewide EV targets. 

Trend 2: State Legislation Prioritizes Energy Storage Adoption

2018 Q4 Summary and Prediction: In 2018 states such as California, Massachusetts and New York set ambitious renewable energy standards (RES) mandating utilities to become 100% carbon-free in the near future. We predicted that in 2019 other states would follow suit and adopt RES goals.

2019 End of Q2 update: 

  • In 2019 we have already seen five states commit to ambitious renewable energy standards. 

    • Maryland targeted 50% renewables by 2050, Illinois, New Jersey and Florida all committed to 100% renewables by 2050 and Maine has increased its goal to 80% by 2030. 

    • Renewable Energy Standards are one of the most effective ways that policy can influence the amount of renewable energy deployed. From 1999 to 2014 RES standards were responsible for 60% of the renewable energy deployed. 

  • This year we have also seen many states adjust and adopt policies that incentivize storage.

    • Both Massachusetts and New York have adjusted their renewable energy programs so that projects including storage are valued higher. 

    • Washington, Texas and Colorado have all passed utility distribution planning legislation to promote utility storage deployment.

  • We even saw policy this past quarter from the federal government that would expand the eligibility of the Investment Tax Credit to standalone storage facilities. 

Trend 3: Battery Prices are Dropping

2018 Q4 Summary and Prediction: At the end of 2018 we saw that despite battery supply chain challenges this past year, an increase in manufacturing and a continued improvement of battery technology would ultimately reduce battery prices.

2019 End of Q2 update: 

  • A recent report by Bloomberg New Energy Finance found that batteries co-located with solar or wind projects are starting to compete economically with coal and gas-fired generation. 

  • The benchmark levelized cost of energy (LCOE) of a lithium-ion storage project has fallen by 35% since the first half of 2018 and is currently at $187/MWh.

  • We anticipate that lithium-ion battery prices will continue to trend in this direction with the growing demand for these batteries and the growing number of policies that favor storage. 

Trend 4: The Energy Storage Market is Expanding

2018 Q4 Summary and Prediction: At the end of 2018 we saw a large increase in the number of energy storage systems. We predicted that energy storage deployment would continue to expand and double in 2019.

2019 End of Q2 update:

  • The Energy Storage Monitor Q2 2019 report found that energy storage deployment in Q1 of 2019 more than doubled as compared to Q1 of 2018. 

  • The report predicts the market will grow 3x by 2020 due to an increase in several large front of the meter projects expected. 

    • The report also predicted that US energy storage annual deployments will reach over 4.5 GW by 2024 and be a $4.8 billion market. 

Trend 5: The Solar Market is Driving Energy Storage Forward 

2018 Q4 Summary and Prediction: At the end of 2018 we saw an increase in the amount of solar deployed and we predicted that as growth continues in 2019, solar developers will continue to see a growing number of storage requests to complement solar and provide a flexible, clean energy solution.

2019 End of Q2 update:

  • In Q1 of this year, the U.S. installed 2.7 GW of solar PV, making it the most solar ever installed in the first quarter of the year. 

  • As the amount of solar deployed in the commercial and industrial market has increased – Nikola Power has seen a corresponding increase in a need for energy storage as a means to complement solar assets and provide a clean, flexible energy storage solution. 

Nikola Power is excited to be on the front lines of these five energy storage industry trends — the market is expanding rapidly and we are eager to see its continued growth. Our technology-enabled platform is designed to drive the energy storage market forward by providing developers the ability to accurately analyze pre-project parameters, as well as optimize the management and control of the installed energy storage system. We have combined these capabilities with a dedicated project finance fund to provide developers the necessary capital to finance and construct energy storage assets. Project developers, EPCs and asset owners can now look to Nikola Power for all of their energy storage needs.  

As always, if you have any interest in a demonstration or a conversation about our technology-enabled platform, please reach out to samantha.kemper@nikolapower.com. We will be making some exciting public announcements about both software products and our project finance fund later this summer.

Samantha Kemper