>“Several of the major markets for renewables, including Germany, Japan, and the United States, have enacted rules or legislation encouraging the adoption of energy storage systems for the purpose of integrating variable energy sources onto the grid,” says Anissa Dehamna, senior research analyst with Navigant Research.  “These market incentives come in various forms, including outright subsidies for ESS adoption, reforms that change how variable generation is compensated, and adjustments to connection requirements for variable power plants.”

In particular, changes to the compensation arrangements for variable power generation will have significant influence on the market for ESSs for solar and wind.  Compensation mechanisms have changed drastically over the past 10 years, according to the report, and many compensation schemes have grandfather clauses—meaning that older wind and solar systems have much different compensation rates and structures than newer systems coming online.<