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By Brian Warshay
According to Lux Research's recent report "Grid Storage Under the Microscope: Using Local Knowledge to Forecast Global Demand," grid storage for commercial and residential applications will be cost-effective for 22% and 19%, respectively, of the global market by 2017.
Grid storage projects, especially in regions without subsidies or other regulatory incentives, carry high capital costs that are slowly recuperated over the lifetime of the project. Commercial and residential customers have relatively short tolerances for their expected return on investment.
To overcome this hurdle, grid storage developers need to look to the recent evolution in the commercial and residential rooftop solar market where solar leases and solar securitization are considered "the next big thing." Developers willing to share the costs and risks associated with these early-stage projects can build confidence in the marketplace and provide credibility to investors. As the perceived risk of grid storage projects is reduced, the costs for their financing will decrease as well.
The lessons learned from the solar industry can reduce the barriers to entry for smaller grid storage customers providing access for developers to the $46 billion commercial and residential grid storage market in 2017.
Brian Warshay is a research associate for Lux Research, which provides strategic advice and on-going intelligence for emerging technologies. For more information, visit the Lux Research site.
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