In my business, this graph is known as “the duck curve,” and it’s a sort-of paradox. Home solar installations generate power when no one is home to use it, but then everyone goes home and suddenly needs power.
Where does the unused daytime energy go? Back into the grid in most cases, but then utilities must decrease output to match what solar customers are pumping into it. The other alternative is battery storage – either via things like Tesla’s “PowerWall” or by charging electric vehicles.
What most people don’t understand about the grid is that its total power must remain stable at all times. Even if the utilities are fully supportive of home power generation, the duck curve presents a challenge for them, because the more homes you have dumping power onto the grid, the more the utility must decrease its power generation to keep the total power precisely stable. And when everyone comes home in the evening, and solar generation decreases, the opposite must happen. All of this must happen in real time. Large fluctuations are harder to handle than small fluctuations, so more solar means means the challenge gets harder.
Because output fluctuates, renewable energy generation and battery storage go together like peanut butter and jelly – they must become tightly coupled. Now we just need cheap/light batteries to make it feasible everywhere. And so we can finally replace jet fuel with electric airplanes.