A new wave of solar farm development, pairing solar photovoltaics with battery storage, is accelerating across the United States, most notably in California, Hawaii, Florida and the Northeast.

Roughly 40 such systems were in operation in the U.S. as of late September, combining about 533 MW of storage with 1,242 MW of solar capacity. Meanwhile, companies are developing at least another 85 co-located solar and storage projects, most of which are in the near- to medium-term planning stages or under construction, according to S&P Global Market Intelligence data. The planned projects combine 4,175 MW of storage with 8,921 MW of solar.

These dynamic renewable energy assets can operate past sunset and into the hours of peak electricity demand typically served by natural gas-fired and hydroelectric generation. Adding energy storage to PV can also help reduce curtailments, or cuts of solar production during periods of midday oversupply on the grid, a growing challenge throughout California and other parts of the country, and smooth the variability of the renewable resource.

Growing pipeline, competitive prices

The Los Angeles Department of Water and Power, or LADWP, in September approved power purchase agreements for output from the Eland Solar and Storage Center in Kern County, a planned 400 MW solar project with 200 MW to 300 MW of batteries. Under development by 8minute Solar Energy LLC, the Eland facility is billed as "the largest solar and battery energy storage system in the United States."

The contracts, pending approval from the Los Angeles City Council, have all-in prices between $30/MWh and $40/MWh, depending on battery size. That is comparable to other recently contracted solar-plus-storage projects in the West.

The Eland project joins another LADWP co-located solar and storage project already operating in Kern County. In October 2018, the municipal utility completed its 20-MW Beacon Energy Storage System adjacent to the third party-owned 250-MW Beacon Solar complex. LADWP has said it plans to expand the storage system to 50 MW.

Several solar-plus-storage projects proposed in Kern County are under contract with local government-run community choice aggregators, or CCAs.

East Bay Community Energy in September approved an agreement with Spower Corp., a joint venture of AES Corp. and Alberta Investment Management Corp., to purchase power from the Raceway Solar I Project, a 125-MW solar farm with 80 MW/160 MWh of battery storage, starting in December 2022.

Monterey Bay Community Power and Silicon Valley Clean Energy, two other CCAs, have contracts with EDF Group affiliate EDF Renewables Inc. for the output from its Big Beau Solar+Storage Project in Kern County. The two CCAs also have power purchase agreements with Canadian Solar Inc. subsidiary Recurrent Energy LLC for another hybrid system in Kings County known as The Slate Solar Project. Both are expected online in 2021.

But some of the biggest U.S. solar-plus-storage buyers are outside of California. Berkshire Hathaway Inc. affiliate NV Energy Inc., for instance, in June announced plans to add 1,190 MW of solar capacity paired with 590 MW of battery storage in Nevada.

Deeper in the pipeline

In the short term, utility requests for peaking capacity will drive most solar-plus-storage assets, S&P Global Platts Analytics said in its latest U.S Power Storage Outlook. The federal investment tax credit for solar is also facilitating hybridization with energy storage, which can qualify for the tax incentive only when charging on solar.

Platts Analytics has identified a recent surge in solar-plus-storage projects in the deeper development pipeline. As of September 2019, for example, the California ISO's interconnection queue showed 23,377 MW of energy storage under consideration with solar projects on the grid operator's transmission system. That is up from 5,965 MW in June 2018.

S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.