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11

Aug 2014

Electric Cars & Energy Storage Are The “Next Solar Power”

11 August 2014 | Posted by Zachary

I know, that title is a little confusing. Let me explain. I’ve been covering cleantech for the past 5 years. When I started covering it, solar power was growing quite fast and costs had been coming down for years. Nonetheless, it was still a tiny sliver of new electricity, it was still more expensive than conventional power sources everywhere unless the high costs of pollution were taken into account or subsidies were provided, and there was little talk of it being a “disruptive technology.”

But then: production increased a lot, which created economies of scale that drove down costs, and which also created oversupply that overcompensated for previous supply shortages, which really drove down costs. Solar costs fell faster than just about anyone predicted, growth surged, and people started to realize that solar was going to disrupt the fossil fuel market as well as the utility market. Major utilities saw their profits dive in the most mature solar markets, and in the burgeoning US market, a trade association for investor-owned utilities wrote about a “utility death spiral” that could occur from solar power growth.

A few years later, I see electric cars and energy storage in very similar positions as solar used to be in. Sales are growing fast (in the electric vehicle industry, they’ve been doubling or tripling every year for the past 4 years). Costs are coming down. Supply from the key ingredient, batteries, is still limited, and batteries are still relatively “expensive.” Not many people are taking electric vehicles and the energy storage market very seriously. However, that is changing fast.

BYD distributed energy storage system

Battery production is ramping up fast (just as solar technology production did a handful of years ago). These technologies are approaching market competitiveness, and are already there for some people. Before too long, electric vehicles and stationary energy storage solutions are going to reach levels where incumbent industries and the general public again realize that these are disruptive technologies that are really going to shake things up.

While many investors and techies are looking for the next “breakthrough app,” social media network, or web billionaire, the newest revolution in technology is occurring under our butts and over our heads.

The keys to these technologies booming are not only in costs, of course, but also quality advantages. Electric cars have several major performance and ownership benefits that I’ve already detailed, and energy storage solutions have a big one of their own. Electricity production generally relies on electricity being generated by power plants the moment it is needed. If supply didn’t match demand, the grid would go down, we’d have a blackout. Energy storage allows for electricity production when wind turbines aren’t spinning, solar panels are in the dark, coal or nuclear power plants have to be shut down due to heat waves or environmental concerns, etc. Energy storage allows us to create electricity exactly when we need it even if there are no power plants running.

With inherent technology advantages, costs dropping fast, and sales growing exponentially, keep your eye on electric cars and energy storage. Also, don't think solar's disrutpion will go away. Electric cars and energy storage support solar, making it even more attractive.

Image: Distributed Energy Storage Systems by BYD

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