Energy Transition

The power couple: Why solar and storage are key to reducing geopolitical risk and securing access to energy

Integrating smart technologies can make solar-plus-storage systems even more impactful

Integrating smart technologies can make solar-plus-storage systems even more impactful. Image: Unsplash/Anders J

Luiz Avelar
Senior Director, Strategy, Envision Digital
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  • Energy prices have surged this year due to pent-up consumer demand post-pandemic and the Russian invasion of Ukraine.
  • Solar-plus-storage systems could help reduce prices and ensure energy security.
  • The internet of things augmented by artificial intelligence is vital for improving solar generation, optimizing battery management, increasing operational efficiency and reducing costs.

Energy prices have surged sharply this year due to several factors, including the release of pent-up demand post-COVID and supply disruption due to the Russian invasion of Ukraine.

The sudden increase in energy prices and its contribution to rising inflation is causing policy distress globally as consumers face soaring costs of living. In the UK, for example, households are experiencing a “cost-of-living catastrophe”, with the consumer price index rising 10.1% in the 12 months to July 2022.

However, higher and more volatile energy prices, especially oil and gas, may expedite the global transition to renewable energy. And that’s where the ‘power couple’ comes into play.

Systems that combine solar and energy storage – the ‘power couple’ – reduce the intermittency and cost of energy, as well as CO2 emissions, whilst ensuring energy security. Happily, renewable energy is generated “in our backyards” instead of imported from other – sometimes unfriendly – countries.

Renewable generation is clean and cheap but is also intermittent

The key problem with renewable energy generation is intermittency. As the sun does not shine all day, integrating reliable storage methods is crucial for times of low or no renewable energy generation, and mitigates the risk of grid blackouts as well.

Analysts conclude that the power couple of solar-plus-storage is one of the best opportunities for battery commercialization. Praised as the most attractive country for co-located battery storage by a group of storage professionals, the UK holds battery storage high on its national net-zero agenda.

The continued expansion of renewables, major cost declines in both solar and storage assets, and technological advancements that make renewables easier to manage are key factors fuelling the market.

Integrating smart technologies can make solar-plus-storage systems even more impactful, mitigating challenges and accelerating the transition to clean energy.

Internet of things augmented with artificial intelligence (AIoT) can improve solar generation and battery charging and discharging cycles by predicting and responding to factors such as weather forecasts, energy grid constraints, battery health, electricity prices, grid services market and many others.

Among other benefits, AIoT helps to increase the power couple’s revenue, prolong battery life, boost solar generation, reduce maintenance costs, reduce safety risks by aggregating data onto a single platform that allows artificial intelligence to put its insights to work.

Advantages of combining solar and energy storage

Grid stability, battery safety and blackout prevention

Solar-storage solutions can act as sunshine insurance, allowing stored power to be dispensed when power demand is high (and accompanied by higher prices) and solar generation is low. Aided by these smart technologies, unified solar and storage can also help prevent blackouts, an issue seen from Australia to California, Lebanon to South Africa.

Price arbitrage and grid-services

Storage also unlocks a “buy-low / sell-high” opportunity for businesses to use cheap energy when demand and prices peak. Furthermore, these assets can provide grid services such as dynamic containment – keeping the frequency within a certain range – thereby bringing new and material new revenues to owners.

Mitigating the risk of yield compression and increasing battery safety

The power couple of solar-plus-storage represents an elegant way to overcome yield and profit compression (also known as “solar capture rate”), which is the continuous reduction in energy price when the sun is shining and more solar assets enter the market. Furthermore, smart technologies onboard the power couple strengthen battery safety by continuously monitoring and optimising operational parameters for greatest reliability and yield.

Cost savings and additional revenue streams through solar-plus-storage

Solar-plus-storage increases the ROI of renewables projects by reducing part of the capital outlay required – that is fewer panels required for same revenue – while bringing new revenue streams online through the provision of grid services mentioned above.

Barriers to widespread adoption of solar-plus-storage

The main barrier to widespread adoption of solar-plus-storage is know-how: configuring the optimal design, gauging investment, and navigating risk management (including regulations), and the high complexity and cost of managing these systems.

In configuring the optimal system design, one faces challenges such as designing the ideal battery configuration to maximise return on investment (ROI), figuring out the optimal cycle rates, power market trends, ideal depth of discharge, rate of deterioration and selecting the right software systems to maximize asset profitability and performance.


Investment and risk management is another point of consideration. As the technology is still maturing, investors are assessing technical and regulatory risks associated with solar-plus-storage projects’ performance and ROIs before making substantial commitments. This uncertainty might deter certain markets from investing in the power couple.

Lastly, monitoring multiple asset systems can be highly complex and costly. To optimize operations and maintain system health, organizations will require capabilities to proactively automate operations and identify and resolve faults across their assets, sites and lines of business.

Leverage technology to optimize solar-plus-storage systems

Technology can play a critical role in overcoming the above-mentioned barriers, ultimately creating a more resilient and efficient solar-plus-storage infrastructure. Key solutions include digital twin modelling, predictive maintenance and AIoT integration for optimization and control.

Digital twin modelling can help in optimizing design and performance. Before building real assets, digital twin modelling can provide investment-grade business cases through accurate simulations, bringing greater credibility to decision making. Digital twins allow asset owners to predict problems adjusted to specific local grid realities and future-proof risks.

Predictive maintenance can increase asset utilization and cost efficiency. Unplanned downtime and poor maintenance can incur unwanted costs, and reduce asset or plant productivity by 5-20% or more.

Have you read?

AIoT predictive maintenance improves the reliability, efficiency, and performance of assets by forecasting faults, minimizing delays and providing early warnings – reducing overall maintenance costs by 5-10%.

In addition, AIoT energy management systems provide granular, millisecond-level real-time control and the ability to monitor and control entire asset fleets in one platform. They also combine accurate demand and power generation predictions using weather and power price forecasts.

Real-time multi-asset control and accurate predictions optimize energy charge-discharge schedules and offer demand and supply side control, enhanced energy trading, and smooth grid integration, thus reducing operational cost and boosting revenues.

Smart solar-plus-storage for clean and resilient energy

Controlling economic and geopolitical risks, from wars to inflation and oil price hikes, is not an easy feat. What can be done is to build clean energy resilience in “our backyard”, to reduce costs and carbon emissions, whilst minimizing the exposure to threats beyond our control.

Smart solar-plus-storage can help with just that. This future-proof solution can ensure the long-term viability of an intelligent, flexible, and resilient grid powered by clean energy.


What's the World Economic Forum doing about the transition to clean energy?

The failure to embrace smart renewables could deepen our exposure to unpredictable and unwanted geopolitical risks and increase the cost of energy – and, therefore, the cost of living – for everyone.

Only with solutions such as solar-plus-storage will nations be able to reduce cost of living, become energy self-sufficient and reduce reliance on malicious countries. It’s time to act.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

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Energy TransitionClimate ActionGeo-Economics and Politics
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