Residential PV storage capacity could hit 2.5GW by 2017 as domestic solar generators increasingly look to consume the power they produce, a report claims.

Research by analyst firm IHS predicts a boom in domestic solar storage in the coming years as self-consumption replaces feed-in tariff maximisation as the main motivation for installing residential PV systems.

This shift is already underway in Germany, where in May a government-backed subsidy was introduced to cover the upfront cost of installing a small-scale PV storage system. Storage systems allow PV energy to be stored at times of peak production and consumed at times of peak demand when grid electricity costs are highest.

IHS maintains that initiatives such as this, combined with dwindling FiTs in other markets and rising electricity costs will make residential PV storage systems more attractive.

“Residential PV customers are striving to maximise their own consumption of the energy they are generating,” said Abigail Ward, PV analyst at IHS. “This is because rising electricity prices and decreasing feed-in-tariffs are serving as a disincentive for consumers to export their power to the electricity grid.

“Such developments, combined with the introduction of the German Energy Storage Subsidy, are forecast to accelerate the overall growth of the residential solar storage market.”

The cost of residential PV systems is currently too high to offset the gains made through electricity bill savings even over a 20-year system lifetime. But with initiatives such as Germany’s storage subsidy, the economics look more attractive, IHS said, with the additional benefit that greater take up of storage technologies in countries such as Germany will make them cheaper elsewhere.

 “Not only will the incentive reduce the upfront cost of residential storage solutions deployed in Germany by up to 30%, it will also generate volume in this immature market—and price reductions achieved by mass production will also benefit installations in other countries,” said Sam Wilkinson, PV research manager and co-author of the report.

“For battery-based residential PV energy storage systems, IHS predicts an average cost reduction of around 45% during the next five years, largely due to decreases in battery prices.”

And IHS also predicts cost reductions in large-scale solar storage technologies, with this segment of the market expected to reach 6GW by 2017.