Following closely behind the maturing solar market are two technology trends that are beginning to stabilize and present the opportunity for photovoltaic (PV) systems to be about more than just generation: 1) deployment of storage is consolidating around lithium-ion batteries, and 2) software applied to energy systems is delineating measures of control for consumers and grid operators alike. As the market matures, differentiation will be vital for system integrators, as a limited number of opportunities to develop business models alongside utilities arise.
System integrators are companies that unify multiple generation and storage technologies into a single system and utilize a control architecture to coordinate their operation. Integrators face multiple angles from which they can gain a competitive edge. They must juggle approaches to design and install the systems with considerations of hardware choice, while also providing services to finance, operate, and maintain the systems. Moreover, integrators may pursue different applications, from distributed rooftop installations to complete microgrids.
Early entrants to integration are demonstrating key approaches to differentiate themselves to both consumer and utility customers. Those that are seeking to gain a competitive position need to differentiate themselves in one of the following ways:
- Offering an entire energy solution through energy efficiency technologies: expanding a system offering beyond generation to traditional energy efficiency measures such as smart thermostats, appliances, and water heaters provides a more traditional means of appealing to consumers. For example, in Hawaii, where the interconnection of new distributed photovoltaic installations has been suspended, SolarCity launched a product integrating energy efficiency technologies (smart thermostats and water heaters) with Tesla’s Powerwall and a PV installation.
- Develop new business models based on the provision of grid services: early relationships with utilities will provide system integrators with an expert partner to learn from, particularly in determining a model for aggregation and providing grid services. For example, Sunrun has partnered with National Grid in New York to deploy rooftop PV installation and its white-labelled solar-plus-storage product dubbed “BrightBox.”
- Provide differentiated hardware systems to ease integration and aggregation: there are multiple degrees of freedom in designing a system in terms of hardware choices that can contribute to high design and installation costs. SunPower demonstrates one way to address this by offering turnkey photovoltaic systems for residential, commercial, and utility-scale installations that include inverters and balance of system components. The company has partnered with Sunverge to develop virtual power plants deploying Sunverge’s software and batteries, in which the uniformity of hardware will likely improve system reliability.
With multiple options available, there is no single formula for system integrators to be successful as the penetration of distributed energy resources grows. However, system integrators must consider the holistic energy picture, moving beyond making multiple pieces of hardware work together to begin thinking of energy as a service.
For more information contact Tyler Ogden at Tyler.Ogden@luxresearchinc.com