SunPower and Sunverge just announced a big solar+storage partnership, which follows a partnership between SolarCity and Tesla as well as the announcement of several energy storage companies beginning to hit the market. If you thought solar power was disruptive (it is), wait until solar + storage beat the price of grid electricity.

I’d say that future isn’t going to be the norm in a few years, but it also is not too far out. And it’s really a gradual transformation, where solar+storage makes sense for certain people and businesses first, and then others, and then others… until, presumably, it makes more sense for the masses. All along the way, we will see growth. A new report estimates that the annual US solar + storage market will rise from $42 million in 2014 to over $1 billion in 2018, a tremendous increase.

By that time, it is expected that 10% of commercial solar customers will also utilize energy storage systems.

US Solar+Storage Annual Market Size Forecast

The report, released moments ago from GTM Research, expects that the US will instal 328 MW of behind-the-meter energy storage by 2018 (on cumulative terms).

The Future of Solar-Plus-Storage in the US identifies key drivers of the growth as the falling costs of solar power, the falling costs of batteries, changes to net metering policies in certain states, California’s energy storage mandate and other state incentives, Tesla’s coming Gigafactory, and the need for greater grid resiliency.

“However, significant barriers do remain. While the cost for lithium-ion storage is falling by 20 percent to 30 percent annually, the price point for both lithium-ion and other technologies is still high. Additionally, the report expresses concern about the ability of solar-plus-storage to participate in multiple use cases such as demand response and ancillary services,” a GTM Research press release stated.

“Currently, only PJM and a handful of other pilot programs allow the participation of aggregated solar-plus-storage in wholesale markets or for grid services,” said Senior Energy Storage Analyst and report author Ravi Manghani.

Some key findings from the report include:

  • Behind-the-meter solar-plus-storage in the U.S. will be a 169 MW market in 2018
  • The annual market value in dollars will grow from $42 million in 2014 to more than $1 billion by 2018
  • California will have the largest market share of solar-plus-storage through 2018, largely due to the fact that it will continue to be the biggest behind-the-meter solar market
  • For a typical commercial end customer, solar-plus-storage systems can provide electricity bill savings of 20% to 30%, resulting in returns (IRR) of 16%-23% for 2014 installations.
  • Solar-plus-storage economics for residential customers are less attractive compared to commercial customers, with returns (IRR) of 6%-14% for 2014 installations.
  • Solar-plus-storage penetration for commercial customers is set to grow from 1% in 2014 to 11% by 2018.

For more information, you have to drop down the cash to purchase the report.