Solar energy storage will be an $8bn market in 2026

Energy storage will increase the distributed solar market by 25GW annually in 2026. Adding storage adds costs, affecting revenue streams and addressable market size, but as installed solar system costs decline – from $3.83/W in 2015 to $1.87/W in 2035 – an attractive economic case will emerge in 2023, leading to strong growth.

“As the solar-plus-storage market matures, interesting developments will unfold on a number of fronts. There will be more vertical integration between the two industries, increased financing options and even a move towards energy-sharing between communities," said Cosmin Laslau, Senior Analyst, Lux Research, and lead author of the report Helping Renewables Shine On: Analyzing the New Business Cases Where Batteries Make Sense for Solar Systems.

Adding storage increases solar installations by more than 10GW per year after 2025

Lux Research analysts studied the impact on distributed solar of its integration with storage to maintain growth. Among their findings:

• Solar-storage partnerships begin to emerge: Partnerships between Stem and SunPower, Green Charge Networks and SunEdison and Sonnen and Sungevity reveal the industry’s future. First Solar even joined a $50m investment in Younicos, a leader in grid-scale energy storage integration.
• Software is a key differentiator: Leaders like SolarCity and others are offering demand management software that can help integrate storage. Sunverge’s system can link to smart devices and EVs, while Sonnenbatterie’s software can analyse weather data to optimise solar consumption and storage.
• Policy support has big impact: Thanks to policy support, Germany has installed 12,000 solar-plus-batteries systems since 2013 with a recent growth rate of 35%. Japan has launched a subsidy programme to cover two-thirds of the installation costs for li-ion battery systems at 1kWh or larger, while California offers a $1.46/W incentive – and mandates utilities to install 1.3GW of storage by 2020.