Technavio’s latest report on the global
Sayani Roy, an industry expert for research in the power sector at Technavio, says, “The global smart solar market, which is in its nascent stage, is projected to grow rapidly during the forecast period as many countries are investing in various technologies and products that make up the market. The smart energy technologies are reducing carbon footprints in an environment apart from increasing the comfort of the user, and providing them with a solution for energy and cost saving.”
The global smart solar market is expected to grow at an impressive CAGR of more than 15% owing to a rise in the installation of solar power systems, and smart energy devices and technologies. Solar power systems comprise the residential and non-residential sectors, and the smart energy devices and technologies include smart grids with solar panel, smart meters, and energy storage systems. Smart grid implementation has grown worldwide and is expected to rise further during the forecast period as a result of hike in its investments made by various countries, such as China and the US.
The top four emerging trends driving the global smart solar market according to Technavio energy research analysts are:
- Increasing demand for solutions and services
- Reduction in solar PV cost
- Rapid deployment of smart grids
- Distributed energy resources and energy storage
Increasing demand for solutions and services
The recent trend in the smart solar industry depicts the growth in demand for solutions and services due to advances in technology in components, such as smart meters, solar simulators, and grid intelligent components, services and applications of the smart solar. Thus most of the vendors are focusing on providing complete solutions for smart solar i.e. from components to the services.
Also, the rise in demand for energy necessitates the need of energy management solutions and demands response services to be integrated with the installations. Now solution services, such as accuracy of bill and record of consumption of energy, are in demand, which is fueling the smart solar market. Another major factor will be intermittent nature of solar energy, which requires such services to manage the solar energy better. Hence, the smart solar is an integrated solution.
Reduction in solar PV cost
A decline in solar photovoltaic (PV) price has resulted in the growth of the global smart solar market. In the past decade, there has been a price decline of more than 40% globally. The cost of installing solar PV for a small residence of 3.5 kW was about USD 15,200 in 2011-2012 and in 2012-2013 it costs less than USD 9,120. Governments around the globe have played an important role by providing subsidies and grants for solar installations. Also, many vendors have lowered their prices to increase the demand for the product, which has led to the growth of the global smart solar market.
Rapid deployment of smart grids
There is a worldwide increase in deployment of smart grids with countries, such as China, the US, India, Spain, Germany, and France, enforcing ambitious, smart grid plans. Smart grid comprises of applications, such as smart energy meters, SCADA systems, IT, and other communication networks. These devices allow utilities to have comprehensive control and manage the digital assets that are present in the field.
China is now the leading investment destination for smart grid solutions, with the country having spent more than USD 4 billion in 2013 alone. China plans to install smart meters in every household by 2017 that will provide grid to home and grid to utility connection. In 2015, the Indian government approved USD 210 million investment for National Smart Grid Mission for planning, monitoring, and implementing grid modernization.
Europe has been deploying smart meters in connection with its smart grid implementation. Countries, such as Spain, the UK, and Germany, have been actively implementing smart meters. As a result, the total smart meter deployment for Europe by the end of 2020 is expected to reach 180 million units, up from the present 55 million units.
Distributed energy resources and energy storage
Distributed energy resources are the smaller energy source, which can be used to provide power to meet the regular demand. Energy storage is helping the grids to transform into a smarter grid. Distributed energy resources are driving the smart energy storage market, due to which the market is growing, and its demand is also increasing. A large number of investments are expected to be made in the energy storage market. For example, on September 30, 2015, NetExtra Energy announced that it will invest USD 100 million in the energy storage system in upcoming years to back up its fleet of solar and wind energy plants. Power industries are showing more interest in energy storage, specifically in battery storage as they are becoming cheaper.
Distributed energy system now works in a two-way system with all the digitization and energy storage facility. From power plant, i.e. generation, to end-user, i.e. consumption, the flow of information is from starting point to end point and vice a verse. “The distributed energy systems and energy storage are attached with the smart solar systems, which directly boosts the smart solar market worldwide,” says Sayani.