The last report released by BNEF (BloombergNEF) and Schneider Electric, pointed out that around 167 million homes and more than 23 million companies around the world will be able to generate their own energy through photovoltaic sources by 2050.
The survey also indicated that the residential segment has the potential to exceed 2 GW of installed solar power over the next 30 years. Furthermore, the research concluded that the costs of solar technology are enabling more and more global markets to adopt this renewable energy. In Australia, for example, the payback period for residential consumers investing in photovoltaic energy has already taken off, with more than 2,5 GW in 2020.
Read more: Residential solar could become Australia's biggest energy source
“Customer-installed solar is a huge opportunity that is often completely overlooked. Thanks to cost reductions and political measures, it is already being rapidly implemented in countries. In fact, it is very likely that it will be expanded”, said Vincent Petit, head of the Schneider Electric TM Sustainability Research Institute.
“This is vital to decarbonizing the electricity sector and offers huge additional benefits to the consumer. It’s time to embrace this transformation,” he highlighted.
BNEF stated that such deployments will unlock major decarbonization benefits, but highlighted that the design of policies and tariffs will be key to enabling them.
energy storage
For BloomberNEF, as the photovoltaic market develops and matures, policymakers and regulators must gradually shift their emphasis to unlocking flexibility and encouraging the adoption of energy storage.
For Yayoi Sekine, head of decentralized energy at BNEF, this is because high levels of solar adoption can lead to excess electricity production during the day, while also possibly destabilizing the power grid. At this stage, he said the addition of storage becomes valuable as it allows renewables to be stored for use at night.
“The evolution of customer-sited photovoltaics is about adding some form of flexibility, which has the ability to unlock much greater solar penetration,” he commented. “The most obvious form of flexibility is batteries, but energy storage will come in many forms, including shifting demand and the use of electric vehicles,” he added.
According to the study, tools to incentivize storage, with the potential to exceed 1 GWh by 2050, include:
- Adjusted export fees (the payments offered to solar owners when they export energy to the grid);
- Time-of-use retail electricity rates (which reflect the lower generation costs of solar during the day), allowing payments for storage to provide grid services (sometimes called aggregation payments);
- Implementation of demand charges (mainly for commercial customers).
These levers, the report says, are generally intended to make rates more reflective of generation and grid costs, but they can also encourage energy storage. The research found, for example, that in California, reducing export taxes to 35% of retail rates, while hurting the economics of solar overall, would shift the emphasis to systems combined with storage, which would still generate an IRR of 13%.
“For commercial and industrial installations, adding so-called aggregation payments for batteries would increase IRRs to 22,8%, making PV plus storage a more attractive option than solar alone,” concluded Sekine.
