According to the National ­Alliance for Advanced Battery Technology, the confluence of powerful trends underway across the nation’s electrical-energy system is driving the need for a drastically different approach to managing the grid system in the 21st century. Among the trends is the rapid penetration of intermittent renewable resources, including distributed wind, solar photovoltaics (PV) and energy storage.

Industry analyst firm NanoMarkets recently published a new report titled, “Solar Storage Markets 2013.” The report forecasts that revenues from batteries and supercapacitors for solar-energy storage will reach almost $2 billion in revenues by 2018.

This report provides an analysis of worldwide solar-energy storage markets products including lead-acid, lead-carbon, lithium, sodium sulfur, sodium-nickel-chloride, and flow batteries, along with ultrabatteries and supercapacitors. Storage demand for both retail PV users and utility-scale solar was analyzed.

It found that, despite considerable technological innovation expected in energy storage, traditional lead-acid batteries will be the main revenue generator for solar-energy storage over the next decade, accounting for more than $950 million in revenues in 2018. They are readily available and low-cost, yet they have poor lifetimes and are becoming commoditized products. Lead-carbon technology will improve the margins on this type of battery, will be used in solar farms and solar-based microgrids, and will generate another $135 million by 2018.

There is also a growing level of interest in the use of lithium batteries in the solar sector, and sales of these batteries are expected to generate $235 million by 2018. Lithium batteries are already being sold for residential and solar-power microgrid applications in the United States and Germany. Over the next few years, Chinese solar-energy storage firms seem likely to focus on lithium batteries, given that China is a major source of lithium. Nonetheless, the report stated that the future of lithium batteries will depend heavily on continued government research and development subsidies. Otherwise, in most countries, lithium batteries are likely to remain too expensive for solar applications.

Feed-in tariffs are declining in key geographies, giving PV users an incentive to store the energy they produce. Battery suppliers are therefore expecting the market for batteries for residential PV users to expand rapidly and are designing specialized systems to meet the demand.

Meanwhile, in California, utilities are facing regulatory requirements to include storage in new facilities. Similar regulations may come into force in Germany. NanoMarkets expects such regulatory requirements to produce new demand for the latest battery technologies for utility-scale PV and thermal solar facilities—beyond the storage at solar utilities that would be required just to maintain grid stability.