Every single second, the sun furnishes the earth with more than six thousand times the energy produced by all our power plants, engines, factories, furnaces and fires combined!

And as far back as 2000 years ago, Chinese architects were aligning windows and doors with the southern sky to let sunlight flood into rooms during winter, heating cold interiors. The Greeks and Romans expounded similar architectural principles. Then coal came along and these design principles fell out of favour…unlucky for us.

But, there’s nothing new under the sun (as they say). Fast-forward to 2019, and take a look at the world. Homeowners in many markets are increasingly warming to the idea of solar panels on their roofs- particularly in California, Germany, and Australia.

  • In Australia more than one in five homes now use solar panels.
  • California was the first state in the US to require that from 2020, every new home is built with a solar system (and California builds about 100,000 housing units each year).

Plus, a recent survey* by CITE research suggests that, regardless of politics, built-in rooftop solar in every new home is an idea that appeals to 70% of Americans.

Solaredge Technologies Inc. has been a beneficiary of this demand. By making each solar panel ‘intelligent’, the company’s technology optimises the power generation of a rooftop solar system. In the residential space, Solaredge provides an array of features: its own smart inverters, cloud-based monitoring systems, solar-based water heating and third-party battery storage systems.



Source: Solaredge

And as the economics of batteries fall and the proportion of electricity generated by renewables rises, home energy storage technologies (solar + battery) become increasingly compelling/necessary. Wall mounted batteries are already relatively low cost ($2500-$10,000), often with short pay-back periods in certain markets and if you’re in California, one can imagine why it might be attractive to have backup power in the event of a brownout or blackout, (the frequency of which are expected to increase as utility PG&E implements cautionary measures to reduce the risks of wildfires).

In Germany, one out of every two orders for rooftop solar is already sold with a battery storage system.



Source: Bank of America Merrill Lynch

4 reasons why energy storage will win

We have previously written about the disruption of the traditional centralised power generation model of utilities. But it’s not just technology disruptors like Solaredge** that are interested in this new market. Ikea have offered solar + storage products (which one assumes doesn’t come flat-packed) and Shell*** recently purchased Sonnen, Germany’s leading maker of home batteries. The future is 4D , Decarbonised, Decentralised, Digitised and Democratised. It’s not yet clear who will provide it, but it probably won’t be long until having rooftop solar, a battery and an EV car will be a genuine reality for many.


*CITE Research (www.citeresearch.com), on behalf of Vivint Solar, conducted a nationally representative online survey of 2000 US adults age 25+ from June 13-16 2019.
**Solaredge is held in the Kames Global Sustainable Equity Fund, as well as other Fund portfolios.
***Royal Dutch Shell is held by sever Kames portfolios, but is not held in our Sustainable or Ethical funds.

About the author

Ryan Smith is Head of ESG Research. He joined Kames Capital in October 2000 as an SRI analyst and was appointed to his current position in September 2002. He has 18 years’ industry experience*. His role involves managing the team that conducts the ESG screening process for our Responsible Investing funds. Ryan’s team also provides corporate governance screening and research for all equity investments, and conducts research into environmental and social issues. Before joining us, he worked as an environmental chemist for Severn Trent Water. Ryan has an MSc in Environmental Chemistry from Nottingham Trent University and is a CFA charterholder.  *As at 30 April 2019.

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