Photovoltaics, already one of the central pillars of renewable power generation, could become the world's most important energy source in the coming decades - ahead of all other renewable and fossil energy sources. The technology is extremely flexible in terms of system size and installation location, which makes for a broad spectrum of possible applications: from home storage systems and virtual power plants to island grids and large-scale systems. Battery storage systems play an important role in all fields of application, both in terms of the profitability of photovoltaic systems and in terms of grid efficiency.



Relevance of this field of application

Photovoltaics (PV) is, next to wind power, the most important renewable energy source worldwide. In Germany, it contributed around 51 TWh or 10.5 % to net electricity generation in 2020. With an installed capacity of just under 54 GW, the maximum output achieved was over 37 GW - 56 % of total electricity generation at the time.1 In the EU, PV systems produced around 132 TWh of electricity in 2019,2 globally, the figure was 550 GWh in the same year.3 Installed capacity globally was over 700 GW at the end of 2020.4 Since 2015, PV has been the fastest growing renewable electricity generation technology in the world. The main focus of new installations has recently been in Asia (especially China, Japan and India), where installed capacity has quadrupled to over 330 GW in the past four years.5,6

The strong growth of the PV market is mainly due to a significant decline in specific system prices. In addition to the relatively low investment and electricity generation costs, the flexibility in terms of system size and installation location in particular also makes PV an attractive option for renewable energy generation. However, PV electricity generation is naturally fluctuating: here, regular diurnal and seasonal fluctuations overlap with irregular fluctuations caused by the weather. The diurnal share of the variability coincides relatively well with the fluctuations on the consumption side, while the seasonal share tends to run counter to it. The fluctuation of wind power generation is also to some extent complementary to PV production. Nevertheless, the challenge remains for the energy system to integrate fluctuating PV power generation.


1 Burger, Bruno (Fraunhofer-ISE) (2021): Nettostromerzeugung in Deutschland 2020: erneuerbare Energien erstmals über 50 Prozent.
Link ↗ (accessed 03.03.2021).

2 Bundesministerium für Wirtschaft und Energie (BMWi) (2020): Erneuerbare Energien in Zahlen – Nationale und internationale Entwicklung im Jahr 2019.
Link ↗ (accessed 03.03.2021).

3 International Renewable Energy Agency (IRENA) (2021): Wind Energy.
Link ↗ (accessed 03.03.2021).

4 Wirth, Harry (Fraunhofer-ISE) (2021): Aktuelle Fakten zur Photovoltaik in Deutschland.
Link ↗ (accessed 03.03.2021).

5 BWK Energie (2020): Online-Serie erneuerbare Energien 2019, Teil 5: Vielseitig nutzbar: Solarenergie.
Link ↗ (accessed 03.03.2021).

6 Fraunhofer-ISE (2020): Photovoltaics Report.
Link ↗ (accessed 03.03.2021).

Use of battery storage

PV systems can be scaled across a wide range: from mini PV systems with an installed capacity of a few 100 W to large solar parks, such as the Bhadla Solar Park in India with 2.2 GW.7 In Germany, the capacity class up to 10 kW accounted for around 61 % of PV systems with 15 % of the installed capacity in 2019, the 10-100 kW class accounted for 36 % of systems with 34 % of the capacity and the 100-500 kW class accounted for a further 2 % of systems with 15 % of the installed capacity. The remaining 1% of systems with a capacity of over 500 kW accounted for 36% of the total installed capacity.6 The total number of systems is estimated at 2 million.4

Small systems are increasingly being combined with battery storage ("home storage"). In this way, the self-consumption of PV electricity can be increased. For the owner, this means a cost saving, as his generation and storage costs are now lower than the costs of purchasing electricity from the grid. At the same time, this reduces the load on the electricity grid: Generation and load peaks can be smoothed, and the amount of transported electricity is reduced. For PV electricity that exceeds both current self-consumption and storage possibilities, there has recently been another utilisation option in addition to the - today only slightly lucrative - feed-in into the public grid: participation in "virtual power plants". These are associations of energy producers, consumers and storage facilities that are coordinated via a common control system.8 This is intended to realise advantages both for the actors involved in the interconnection and for the energy system. In terms of energy storage, batteries play the central role alongside power-to-gas plants.

Furthermore, PV is the most significant source of energy for island grids. Around 770 million people worldwide have no access to electrical energy, especially in rural Africa.9 Connecting the regions concerned to the interconnected grid would be costly and unprofitable in many cases. Island grids with their own energy supply are then an attractive alternative to electrification. Since generation and consumption fluctuate strongly on both sides due to the comparatively small number of actors, energy storage systems - mostly in the form of batteries - are indispensable for the operation of island grids. Finally, battery storage is also used in combination with large-scale PV power plants, of which there are already numerous examples worldwide.10


7 Wikipedia (2021): Bhadla Solar Park.
Link ↗ (accessed 03.03.2021).

8 Next-Kraftwerke (2021): Was ist ein Virtuelles Kraftwerk?
Link ↗ (accessed 03.03.2021).

9 International Energy Agency (IEA) (2020): Access to electricity.
Link ↗ (accessed 03.03.2021).

10 Wikipedia (2021): Liste von Batterie-Speicherkraftwerken.
Link ↗ (accessed 03.03.2021).

Performance requirements

PV systems, regardless of their dimensioning and location, are projected for relatively long periods of time. Plant manufacturers usually grant performance guarantees of 20-25 years. The PV system and any associated battery storage should be operated for at least this long. Longevity is therefore a key performance requirement for the batteries used.

In addition, battery storage systems in the context of PV systems must meet high safety requirements. As home storage systems, they are located in residential buildings or in their immediate vicinity. Fire and explosion hazards must therefore be avoided at all costs. In the case of island grids and large-scale systems, the potential material and economic damage from fire or explosion events is enormous - especially beyond the actual PV system.


Market outlook

A massive increase in installed PV capacity is expected worldwide in the coming years. Regions such as Australia, the Middle East and Africa have so far only had comparatively low capacities - despite the best conditions for PV power generation. With regard to Germany and other European countries, it is assumed that, due to the cost advantage over household electricity tariffs, small-scale systems in particular will be increased. It is estimated that global installed capacity could increase to 2,800-3,200 GW by 2030, with potential electricity generation of 3,080-5,120 GWh annually.5 Germany alone would need to have 400-500 GW of installed PV capacity to meet its climate protection targets.4 According to long-term scenarios, PV could even become the world's most important source of electricity from mid-century onwards, ahead of all other renewable and fossil energy sources.4

Strong growth is also expected for the outlined fields of application for battery storage - home storage, virtual power plants, stand-alone grids and large-scale PV power plants. For example, the number of PV electricity storage systems installed in Germany recently increased from 184,000 (2019) to 272,000 (2020), which is almost 50 % within one year. With an average storage capacity of 7 kWh, this results in a total capacity of 1.9 GWh at present.11 Of the existing 1.2 million small-scale PV systems in Germany, however, only 22 % are combined with a home storage system. Retrofitting the remaining stock alone would require a storage capacity of 6.6 GWh.

11 Bundesverband Solarwirtschaft (BSW) (2021): Statistische Zahlen der deutschen Solarstrombranche (Speicher/Mobilität).
Link ↗ (accessed 03.03.2021).