With solar increasingly being paired with storage in the US, new research reveals the solar-storage installers and battery vendors benefitting most from this growing trend
As has been previously highlighted by Tamarindo’s Energy Storage Report, solar developers are increasingly waking up to the need to incorporate energy storage in projects, in part because this increases the amount of energy produced by such projects, with the result that investment returns from solar assets go up.
However, there are other factors at play. For example, the American Council on Renewable Energy, recently highlighted that the US electric grid will face “unprecedented reliability challenges this winter”. Such is the concern that the US Department of Defense, for example, has concluded that the US power grid is not reliable and that if “resilient power” is what is required then it has to be brought “inside of the fenceline” because the grid can’t be trusted anymore. Hence, a significant shift in focus to distributed solar and storage. Meanwhile, the rapidly growing solar plus storage industry is being further fuelled by the offer of direct incentives for adding battery storage to solar systems. One example is the California ‘Net Billing’ programme, which is designed to “encourage solar customers to add battery storage to their solar systems”.
Given all these drivers, it’s unsurprising that solar plus storage installations are on the increase. A recent release from Wood Mackenzie highlighted solar-storage “attachment rate growth” and showed that in Q3 2023, 11 per cent of US residential solar and 5 per cent of non-residential solar installations were paired with storage.
So which are the solar-plus-storage installers and battery vendors that are profiting from the growing trend of combining storage with solar installations? First, let’s take residential solar-storage systems. According to Wood Mackenzie, Tesla’s Powerwall and LG’s RESU battery have been the most popular residential products over the past five years, accounting for more than three-quarters (77 per cent) of the cumulative market from 2018 until Q3 2023. Yet, crucially, their market dominance is being challenged by new market entrants – the shifting sands are best illustrated by the fact that, while Tesla and LG products were installed on 96 per cent of US residential solar-plus-storage projects in 2018, they made up 65 per cent of installations in 2023 up to Q3.
Wood Mackenzie notes that “established energy equipment companies” such as Enphase, SunPower, Generac and SolarEdge have entered the market and established themselves among the top seven manufacturers (see image below). Particularly notable has been the entry into the market of FranklinWH which, within only two years of launching its first storage project, has worked its way up to the eighth-ranked manufacturer nationally. In such a competitive market, the emphasis is on battery vendors to differentiate via factors such as price, warranties, rate optimisation software, ease of installation, and inverter power levels, according to Wood Mackenzie.
The top five players in the residential solar-plus-storage installer sector account for 59 per cent of the market – Tesla claims the top spot in the residential solar-plus-storage rankings with a market share of 30.2 per cent in 2023 (up to Q3) followed by Sunrun at 20.5 per cent and SunPower at 4.6 per cent.
While major players dominate the market, Wood Mackenzie highlighted a number of smaller installers that have built expertise in installing and selling storage. Despite having smaller regional footprints, the following two installers have substantially grown their profile:
Cinnamon Energy Systems
Headquarters: Los Gatos, California
Pitch: For home solar and energy storage, the company says it offers “high efficiency solar panels” with a 25-year manufacturers power output warranty. For commercial energy storage, the company says its ‘SmartStorage’ system installations are available with a 10-year asset management agreement which includes a 10-Year performance guarantee.
Leadership: The company is led by CEO Barry Cinnamon, who began his career in solar energy in the late 1970’s at MIT researching new flat plate and concentrating collector designs.
Sun Valley Solar Solutions
Headquarters: Chandler, Arizona
Pitch: The company highlights that utility companies charge more per kilowatt-hour during peak demand hours, but by incorporating a ‘PowerBank’ battery system, “you can draw stored power during these peak billing times to reduce energy consumption, saving your business money”.
Leadership: The company’s CEO is Russ Patzer, who has been with the company for 17 years.
Wood Mackenzie reported that commercial solar-plus-storage remains limited to a “few key markets with direct storage incentives”. New York, Massachusetts and California have accounted for 60 per cent of installed non-residential storage-paired solar capacity across the US since 2018. The following two companies have the largest market share:
Market share: 20 per cent
Leadership: Mike Hall is Borrego CEO
A traditionally dominant force, but in 2022, it spun off its distributed solar and energy storage development business to ECP, with the operation being renamed New Leaf Energy. In addition, with new storage markets emerging, there is an expectation that Borrego’s dominance will diminish.
Market share: 7 per cent
Leadership: Zaid Ashai is the company’s CEO
The company claims that Nexamp subscribers receive an average of $275 annual electricity savings.