Germany’s upcoming incentives for energy storage could have a major impact on the prevalence of storage and its cost to consumers.

The German Federal Ministry of Environment announced plans to introduce incentives for energy storage, especially storage for solar photovoltaic systems, this year. Despite funding glitches, the incentives are expected to roll out soon.

And when they do, they could spur wide adoption of a technology that’s already attractive to a lot of Germans who have rooftop solar arrays.

The levelized cost of solar is much lower than grid power in Germany, said Tobias Rothacher, senior manager of renewable energy for Germany Trade & Invest.

“Customer demand for storage of this cheap PV energy is increasing,” Rothacher said. “More and more customers not only want to make use of the low-cost PV electricity during daytime, but also want to extend this use for nighttime and increase the share of PV consumption respectively.”

Germany expects incentives to drive down the cost of energy storage and increase innovation.

“It is very clear that the demand for stationary storage is growing and along with the extensive battery development coming from the automotive industry the resulting increased battery production could drive down the costs for batteries and energy storage within very short time,” Rothacher said. “Innovation is expected in battery management systems that are tailored for the battery use in stationary energy storage applications as well as in the interconnection and interaction of many battery systems for smart grid applications.”

Storage is probably more essential in Germany than in nearly any other location. The country gets 23 percent of its electricity from renewable source, including hydropower, bioenergies, PV and wind. Of that, Rothacher said solar is growing dramatically. Even after the government slashed subsidies last year, Germans produced 47.7 percent more solar energy than in in the previous year. And solar now accounts for 4.7 percent of the country’s electricity generation.

“As PV and wind are rather fluctuating sources, the need for balancing these within seconds and hours rises in parallel to their rising share in our electricity mix,” Rothacher said. “Storage can contribute to this but also smart grid and demand side management technologies. The current need for balancing power is expected to increase by about 50 percent until 2025.”

He said there are also efforts to find a way to store energy long-term, from season to season. Since there is generally a surplus of solar energy generation in the summer, there is a lot of work going into ways to capture that excess and store it for short winter days.

Even without incentives, Rothacher said lead acid batteries, which are cheap, are being integrated into a solar installations. With the incentives, he expects companies and consumers to move toward longer-lasting and more compact solutions like Lithium-ion batteries.

“The incentive will allow and increase bankability of these systems and thus spread their implementation beyond pioneering users,” Rothacher said. “I am confident that more and more PV systems will come along with storage devices in the future – as well as with home energy management and home automation systems respectively.”