Profit analysis of photovoltaic and energy storage companies

Can energy storage systems reduce the cost and optimisation of photovoltaics?

The cost and optimisation of PV can be reduced with the integration of load management and energy storage systems. This review paper sets out the range of energy storage options for photovoltaics including both electrical and thermal energy storage systems.

How do I evaluate potential revenue streams from energy storage assets?

Evaluating potential revenue streams from flexible assets, such as energy storage systems, is not simple. Investors need to consider the various value pools available to a storage asset, including wholesale, grid services, and capacity markets, as well as the inherent volatility of the prices of each (see sidebar, “Glossary”).

Do investors underestimate the value of energy storage?

While energy storage is already being deployed to support grids across major power markets, new McKinsey analysis suggests investors often underestimate the value of energy storage in their business cases.

Should energy storage be undervalued?

The revenue potential of energy storage is often undervalued. Investors could adjust their evaluation approach to get a true estimate—improving profitability and supporting sustainability goals.

How important are ancillary services to energy storage?

Ancillary services that stabilize the power grid typically represent 50 to 80 percent of the full storage revenue stack of energy storage assets deployed today. This is observed across multiple mature storage markets but is expected to decrease to less than 40 percent by 2030.

What is the difference between reactive power and stochastic modeling?

Reactive power: A component of modern alternating current power systems whereby voltage profiles need to be maintained throughout the network to support the voltage required for the safe operation of equipment. Stochastic modeling: An analytical approach where certain variables are randomized to simulate the effect of uncertainty in real systems.