U.S. Residential PV + Energy Storage Market Continues To Rise

The Lawrence Berkeley National Laboratory's (LNBL) annual solar report notes that the size of residential solar systems in the U.S. continues to grow, according to preliminary installation statistics for the first half of 2021-2022. At the same time, the proportion of additional storage increased. Although the decline was slight, the median installed price for all types of PV projects declined again.

The report outlines key trends in the U.S. PV market. lBNL says that the size of residential PV systems continues to grow, reaching a median of 7.0kW in 2021, and that the size of non-residential systems has leveled off. Most (non-household systems) are relatively small, with a median of just 33kW in 2021, and about 20% are larger than 150kW, with an average size of about 250kW for all non-household systems. the lab defines non-household systems as any size ground-mounted system up to 5MW.

Meanwhile, component-level power electronics, such as microinverters or DC optimizers, continue to increase their share in the overall sample, accounting for 94% of household systems in 2021, 81% of small (<100kW) non-household systems, and 36% of large non-household systems (≥100kW).

For tracking systems, about 46% of all large non-household systems installed in 2021 are ground-mounted plants, and only 12% have tracking capabilities. In comparison, 13% of small non-household systems and 2% of household systems are ground-based projects, with a negligible share of tracking, the report shows.

LBNL analyzed data on the installed price paid by system owners prior to receiving incentives. This is based on a subset of the larger dataset, which primarily covers stand-alone PV systems.

The report shows that the median project price in the U.S. has declined on average by about 0.4c/W per year, but the rate of price reduction has tapered off since 2013, and since then has been about 0.1c-0.2c/W per year.

In inflation-adjusted real terms, median prices for all three sectors fell by 0.1c-0.2c/W between 2020 and 2021. rising component costs have put upward pressure on prices over the past two years, but despite this, preliminary data for the first half of 2022 suggests that the real median installed price for residential systems is unchanged from the second half of 2021.

However, there is general agreement in the industry that supply chain constraints will put upward pressure on prices, but this may not be fully reflected in the prices of installed projects, and to some extent in real dollar terms, in the inflation adjustment to pricing data. In nominal terms, the median price for household and large non-household systems moved upward in the first half of 2022.

Similarly, there are deviations in trends among U.S. states, with half of the states showing an increase in median household prices in 2020-2021, while most states show a decrease in non-household prices.

In 2021, the median price of a PV system with battery storage is $0.60-$1.60/W higher than a standalone PV system in all three customer segments. using multivariate regression analysis, LBNL estimates that if a 5kW battery is equipped with 10-15kWh of storage, the added storage premium for household PV is $1.90/W.

"Considering typical household PV and storage sizes, this equates to a potential incremental cost of energy storage of about $1,200/kWh, which is consistent with the average household energy storage cost reported by the California Self-Generation Incentive Program."

This year's Solar Tracker Report also includes a discussion of trends in solar-storage system pairings, including details on battery storage add-on rates and system sizing.

The report found that the add-on rate for battery storage in the residential sector has been steadily increasing, reaching 10 percent of the data sample in 2021. Add-on rates in the non-household sector are lower, fluctuating and rising over the years, reaching 4.9% of all installed systems in 2021.

However, these add-on rates are unevenly distributed across the U.S., with the increase in add-on rates primarily reflecting progress in a few states, such as California. Hawaii has the highest add-on rate of any state (93% for residential and 59% for non-residential in 2021), and extreme weather events such as Storm Uri, which ravaged Texas last year, have brought an increase in demand for co-located battery energy storage systems (BESS).

Over time, residential systems with energy storage continue to grow toward larger storage sizes, with about 42% of systems with at least 10kW of batteries installed in 2021, but non-household systems with energy storage are becoming smaller. Almost half of all non-household systems with storage installed in 2021 will have batteries smaller than 10kW.

LBNL says this is due to ‘growing acceptance by smaller customers of applications other than demand charge management.’