Solar energy and batteries – balancing the electricity system of the future

Over the past decade, the growth of renewable energy – including solar energy – has been rapid. These developments have also accelerated the development of energy storage technologies, such as battery storage. Since the production of solar energy depends on weather conditions, balancing elements are needed to store excess energy and keep the power system in balance.

Solar panels and batteries form the hybrid solution of the future

In recent years, battery prices have decreased significantly and battery solutions have become profitable. And the size classes have also grown. The United States and China already have large battery storage facilities capable of storing energy for several hours. In Finland, batteries are utilised especially in short-term balancing of the electricity system, but the role of batteries may also increase in long-term energy storage.

As a developer and builder of solar power, Skarta Energy plans and implements projects that integrate battery storage into a whole. Every new solar farm is considering increasing battery storage, and in the future, each solar farm is likely to be a hybrid solution with solar panels and batteries operating in parallel. This helps store solar energy when production is at its highest and utilise it later.

Skarta Energy’s first solar-battery-hybrid project is planned in connection with the Isosuo solar park in Utajärvi in 2026.

In Finland, volatility in electricity prices increase the profitability of battery investments

In Finland, batteries have so far focused on the reserve markets maintained by Fingrid, where their fast reaction time balances fluctuations in production and consumption. Batteries also allow us to even out solar power production by widening our daily production profile. The role of batteries in solar power is constantly growing, and we expect major investments in the coming years, especially once demand-side investments will accelerate.

In addition to the reserve markets, short-term volatility in electricity prices are an important factor in the profitability of battery investments. When electricity is cheap, batteries can be charged, and the energy stored can be sold back to the grid during periods of more expensive prices. This business model is particularly attractive in Finland, where electricity prices fluctuate strongly. In the future, as weather-dependent production increases, electricity price volatility is expected to increase, and batteries are likely to smooth out the price fluctuations.

In the future, the significance of batteries in energy storage and balancing the electricity system will continue to grow. As solar energy production increases, batteries enable the energy produced to be utilised efficiently and sustainably. This makes solar energy an even more attractive option for all parties.

Why batteries?

Balancing: Batteries balance weather-dependent solar energy production by storing excess energy and releasing it during peak consumption times.

Electricity prices: Fluctuating electricity prices provide an opportunity to store the energy in batteries cheaply and sell it during higher prices.

Finnish reserve market: In Finland, batteries provide short-term balancing capacity in seconds to the power system, which ensures that production and consumption are in balance at all times.

A growing trend: Battery prices have fallen, making them more profitable investments.

Responsible future: Growth in battery investments largely goes hand in hand with the growth of renewable energy. Responsible sourcing of battery materials is becoming increasingly important.