Why Energy Storage will be the Biggest Gainer from Solar Grid Parity

Solar Grid Parity has not really given that great a boost to Solar Stocks as oversupply from China has led to a massacre of the stocks prices in the sector.However the fact remains that Solar Prices have now reached grid parity in various places in the world without a lot of people realizing it. In countries like Brazil and Italy, Solar Energy Electricity price is already lower than the Retail Price of Electricity. So it is on most islands in the world like i,Caribbean and elsewhere. These islands which are mostly powered by dirty diesel generators are seeing rapid deployments of solar power. In fact Hawaii is already getting saturated with solar . However the Achilles heed of Solar Energy that is the lack of continuous power is starting to bite.

The cost of generating electricity from the sun will compete with conventional power delivered on a grid in half the world by 2015, according to Suntech Power Holdings Co., the world’s largest photovoltaic panel maker.“Solar is getting so cheap,” Chief Executive Officer Zhengrong Shi told Bloomberg Television today in an interview in Davos. “We believe by 2015, there will be around 50 percent of countries that reach grid-parity.”“Solar now is already cheaper than diesel generating electricity in India,” Shi said. “This is not only happening in India but in many countries around the world.”

With most utilities and power grids opposing the use of excess solar power as these intermittent sources of power can cause grid instabilities at higher percentages, the need for Energy Storage has increased. Note there is no one solution to Energy Storage for Renewable Energy sources .A wide variety of chemical,mechanical solutions exist. Lead Acid Batteries offer the cheapest solution however the low number of cycles, maintenance etc makes it a difficult choice for a longer duration. Lithium Batteries are expensive while other solutions like Sodium Sulfur Batteries too have their problems.

Storing Energy through large scale solution like hydro and air storage is not feasible for small scale green power sources. However with solar panel prices falling has made solar energy prices very cheap. This is increasing the need for cheap and reliable energy storage sources . This will provide the biggest opportunity for energy storage companies like A123 Systems, Exide, Enersys and others. These companies which mainly  rely on the automobile markets for most of their revenues will increasingly get most of their revenues from  the electricity market.

Pumped Hydro Storage Introduction

Pumped Hydro Storage along with Compressed Air Energy Storage (CAES) are the less glamorous cousins of Energy Storage Approaches like Lithium Batteries,Flywheels and Capacitors .The Green Investing Limelight has been firmly taken over by startups like A123 Systems which have failed to perform to their initial hype.Pumped Hydro Storage on the other hand is already extensively used by Power Companies to store low cost electricity during off peak hours and then used during peak times to supply the high demand.There is90 GW of Global Pumped Hydro Storage already existing in the world and with increasing Solar and Wind Energy  this Capacity is only going to grow.The main use of Pumped Hydro Storage is for Grid Energy Storage rather than Energy Storage for Automobiles and Electronic Products.The Electric Utilities are the main customers of this Technology using Pumped Hydro Storage for

1. Load Balancing – Storing Power during Low Usage Periods and Generating Power at High Usage Periods
2. Accommodation of Intermittent Sources of  Energy – Solar Energy and Wind Energy are  growing at a scorching fast rate of 50% and 30% CAGR over the last several years.Larger share of these forms of renewable energy in the Electricity Mix is driving the growth Grid Storage.
3. Reducing Capital Investments as Peak Power plants like Natural Gas Combined Cycle Plants are much more expensive to run than normal Thermal and Nuclear Energy Plants