The US household PV + energy storage market is on the rise!

Currently, a hybrid PV + storage model is on the rise in the US residential PV market, with longer storage times and a growing trend in battery storage capacity/PV capacity ratios.

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

Median value of 7.0kW for US household PV systems in 2021, with household systems with energy storage continuing to grow towards larger storage sizes

Rapid growth in residential PV

The report outlines key trends in the US PV market, with LBNL saying that the size of residential PV systems continues to grow, reaching a median of 7.0kW in 2021, and that the size of non-household systems has levelled off. Most [non-household systems] are relatively small, with a median value of just 33kW in 2021, with around 20% larger than 150kW and an average size of around 250kW for all non-household systems.

The lab defines a non-household system as any size of ground-mounted power plant system up to 5MW.

Meanwhile, component-level power electronics, such as microinverters or DC optimisers, 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).

In terms of tracking systems, around 46% of all large non-household systems installed in 2021 will be ground-based plants, with only 12% having 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 analysed 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.

Trends in system size over time

Price curves

The report shows that median project prices in the US have fallen by an average of around 0.4c/W per year, but the rate of price reduction has tapered off since 2013, with annual price reductions of around 0.1c-0.2c/W since then.

In inflation-adjusted real terms, the median price 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 inflationary adjustments to pricing data. In nominal terms, the median price for household and large non-household systems has moved upwards in the first half of 2022.

Similarly, there are deviations in trends between US states, with half of the states showing an increase in median household prices in 2020-2021, while the majority of states show a decrease in non-household prices.

In 2021, the median price of a PV system with battery storage is $0.6-1.6/W higher than a standalone PV system across the 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 $1.9/W.

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

Prices have fallen significantly since 2000. As of 2013, prices have levelled off

Solar-storage co-location

This year's Solar Tracker Report also includes a discussion of trends in solar-storage system pairings, including details of 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% 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 US, with the increase in add-on rates mainly reflecting progress in a few states, such as California. Hawaii has the highest add-on rate of any state (93% for households and 59% for non-households in 2021), and extreme weather events such as Storm Uri, which devastated Texas last year, have led to an increase in demand for co-located battery energy storage systems (BESS).

Over time, residential systems with energy storage continue to move towards larger storage sizes, with approximately 42% of systems with at least 10kW batteries installed in 2021, but non-household systems with energy storage becoming smaller and 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 "increasing acceptance by smaller customers of applications other than demand charge management".