Battery storage makes 'anytime solar' dispatchable – this is what wind needs to catch up
As solar companies steam ahead in the race for energy storage, progress for wind depends more on policy and market incentives than technology, analysts say
Falling battery prices are reshaping the economics of renewable energy, with solar power that is dispatchable at any time during the day or at night now economically viable.
'Anytime solar' now costs just $76/MWh outside the United States and China, according to new data by energy think tank Ember, thanks to cheaper battery packs, longer lifetimes, higher efficiencies, and lower financing costs due to revenue models like auctions.
But to store power generated from wind as well as solar, Europe needs to improve the economics of hybrid systems, analysts say. Pairing wind or solar with storage has been driven more by policy and market structures than technological barriers.
How dispatchable solar is calculated:
- Dispatchable solar combines the global average daytime solar price of $43/MWh with the cost of $33/MWh for storing and shifting electricity for use when the sun is not shining, according to Ember.
- The Levelised Cost of Storage (LCOS) is $65/MWh, but since only half the electricity requires storage for night and off-peak hours, the effective cost is $33/MWh.
- The LCOS adjusts a $125/KWh capital cost ($75/KWh for core equipment shipped from China and $50/KWh for grid and installation) based on real-world project assumptions, including financing costs, lifetime, efficiency and degradation.
For example, a UAE project aiming for fully green solar is pairing 1GW of firm power with 19GWh of storage, resulting in costs far higher than gas.
Technical and operational challenges
Solar and storage can connect via direct current (DC) or alternating current (AC), while wind only uses AC. An AC-connected system is not technologically different for wind, but operationally, wind is harder to forecast and manage, Weis explained.
Solar’s predictable generation allows four-hour battery shifts and a clear economic path for bidding. Wind conditions vary by location, making state-of-charge management more complex.
Even as technology allows hybrid systems, policy and market incentives ultimately determine how many of these projects get built.
Where the goal is a flatter, more manageable profile, adding wind can complement solar effectively, though optimal ratios vary by site. Good wind locations typically have 30-40% capacity factors, but daily output patterns strongly affect economics, the WoodMac analyst said.
Currently, European LCOE for hybrids is $65/MWh for solar and $76/MWh for onshore wind and is expected to drop by $10/MWh over the next five years, according to WoodMac.
“But wind is less of a plug-and-play solution than solar. It needs clear government targets to signal long-term commitment and unlock investment,” Ember's Rangelova said.
“Without that policy certainty, we risk wasting world-class wind potential just as the clean energy transition is accelerating.”
Policy and market drivers
The US built more paired projects – where storage plus solar and wind are built together – than Europe, which has more standalone projects, due to US incentives like the investment tax credit, WoodMac's Weis explained.
Before former US President Joe Biden's Inflation Reduction Act (IRA), storage companies only received tax credits if projects were paired with solar. Now, storage can get credits without solar, but companies continue to build with solar because of market saturation.
“It’s been an evolution of what company they're used to building based on incentives that were in place,” Weis said.
Many solar companies also moved into storage as solar faced more challenging economics in certain regions, so the history of companies plays a role.
Europe initially focused on standalone projects in the wholesale market, but there is now a growing trend toward paired projects.
(Copyright)