Why the Energy Storage Industry Could Be a Lucrative One
Online stock brokers have caused many people to start trading. Of course, success and lots of it is what every trader dreams of.
One of the secrets of success of celebrated investors has been identifying opportunities that many never thought existed. It may be hardfor most of us to spot such opportunities, but there are some bright analysts out there who could spot them for us. Here’s one of them who believes there’s a minefield of opportunity in the energy storage sector.
The Growing Need for Energy Storage
Now why does Motley Fool analyst Travis Hoium reckon that energy storage is such a promising sector? Well, for starters, here’s a stat. Energy Storage Monitor reports that there were 311 megawatts (MW) as well as 777 megawatt-hours (MW-hr) worth energy storage installed in the United States in 2018. All these installations could result in 75,000 homes being powered all through the year. And this is just the start! Sounds promising? You bet!
The rising need for uninterrupted power supply for homes and factories in the context of power outages has resulted in energy storage technology advancing. Batteries have significantly increased in their storage potential, making them adaptable to almost any project and setting, be they residential or commercial.
More and More Investments Coming Up
That 777 MW-hr energy storage we talked about earlier is nothing compared to what’s coming up. Nevada’s Gemini Solar Project is planning on building a 531 MW/2, 125 MW facility for energy storage which would partner a solar power plant of 690 MW. The entire project would enable electricity provided to the gird to be smoothened out so that even the peak hours of the evening won’t cause any strain to the grid thanks to the energy storage. The evening is when the demand for electricity is the highest despite the fact that the intensity of the sun fades. That’s where energy storage comes to the rescue.
NextEra Energy ($NEE) runs the Florida Power & Light utility and is planning a facility of 409 MW/900 MW-hr to accompany a solar power plant. The island state of Hawaii will witness 6 energy storage projects totaling 247 MW/998 MW-hr. When combined with solar power plants worth 247 MW, electricity will be delivered to the grid at the economical rate of around $0.10 per kWh or even lesser. The island is currently reeling under expensive fossil fuels. While conventional electric energy company Hawaiian Electric Industries ($HE) has been disrupted by the push towards solar energy and energy storage, Hoium points out that the company is also gradually making use of energy storage and solar energy to its advantage.
Industry in a Boom
As you’ve seen, massive energy storage projects are popping up everywhere, and that shows the industry is in a boom now. And the boom doesn’t seem to be stopping anytime now. That’s because traditional power sources are getting strainedwhile renewable energy sources such as solar and wind are still too volatile to be consistently relied upon. That makes battery storage so critical. Also helping is the fact that the costs of batteries have significantly come down, making them economical options. Hoium quotes the Levelized Cost of Storage Analysis report by Lazard that states that the average lithium-ion battery storage cost for utilities has fallen to $251 per MW-hr from $543 per MW-hr.
Residential projects are also cropping up, with Sunrun ($RUN), SunPower ($SPWR) and Vivint Solar ($VSLR) leading the charge with energy storage projects for homeowners. These are small-scale projects, but they are growing and could become part of standard solar systems.
By 2024, Wood Mackenzie analysts expect the capacity of installations to exceed 4500 MW. Hoium calculates that to be a $1.35 billion market which battery manufacturers can capitalize on, assuming $300 per MW average cost.
Clearly this is one area that is set to be a hot investment opportunity in the years to come. With advanced stock market trading software offered by TradeZero, your initiation into stock trading could be easier. Please call us at 1 954-944-3885, or email email@example.com.
The content provided here is solely for informational and educational purposes and does not constitute an offer to sell or a solicitation to buy any security or instrument which may be referenced upon the site, or an offer to provide advisory or other services by TradeZero in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. Investors are advised not to rely on the information contained in this writing to make an informed investment or financial decision. TradeZero explicitly disclaims all liability for any action taken based on any information contained in this writing.