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[Source: The US Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE)]

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Solar Paired With Storage Is Approaching Grid Parity

Accelerating changes in technology are making the combination of solar photovoltaics and battery storage potentially more cost-effective than either one alone.

In October 2012, as Superstorm Sandy rocked the East Coast, 75 residents gathered in the Midtown Community School in Bayonne, New Jersey.

The elementary school was operating as an emergency shelter, giving people who were stuck in the severely flooded town a place to stay dry. But the school was much more than a shelter — it was an experiment in hybrid solar photovoltaics that may herald a coming structural change in the power sector.

Four years earlier, the local school district approached the New Jersey-based installer Advanced Solar Products, which had already developed a 272-kilowatt system for the Midtown school. The school district wanted to figure out how to allow the solar PV to operate during power outages when other systems were required to shut off. The company worked with SMA to modify a commercial inverter and tie it into the emergency diesel generator, allowing the generator to idle at low levels when the sun was shining.

The result was a steep drop in fuel consumption at a time when it was nearly impossible to make diesel deliveries to flood-stricken areas.

“The solar did what it was supposed to do. It worked exactly as planned,” said Lyle Rawlings, president of Advanced Solar Products, in an interview.

The combination of solar and storage is a “real, near, and present” threat to the way utilities do business.

On their own, the economics of the two technologies are improving steadily. According to the Department of Energy, lithium-ion battery costs have dropped by 50 percent since 2008. And prices could drop as low as $125 per kilowatt-hour in the coming decades. Tesla founder Elon Musk thinks they could drop to as low as $200 per kilowatt-hour in the next few years.

There’s been an equivalent drop in residential and commercial solar. According to GTM Research, the average price of an installed solar system (weighted across all sectors) has fallen by 61 percent since the first quarter of 2010.

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