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How to get the best value for money out of the coming home battery boom

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The Conversation

Patrick Fallon/Reuters

Patrick Fallon/Reuters

Home power storage batteries are coming to a house near you as the game-changing technology – which promises to let you store solar energy for later use when the sun isn’t shining – begins appearing across Australia’s suburbs.

When new technologies are launched, they often cost quite a lot of money, so only a few people buy them. In marketing-speak, these people are “innovators” or “early adopters”. Then as more people buy the product the cost per unit goes down, in turn encouraging even more people to buy it, in a virtuous pricing circle known as Rogers’ Diffusion Curve.

A typical technology’s journey from obscure gadget to must-have item. Based on Rogers, E. (1962) Diffusion of innovations. Free Press, London, NY, USA

This phenomenon has been seen across many technologies over the past century, from hairdryers, to microwaves, to mobile phones. But what’s interesting is that the rate of adoption is accelerating. We are adopting technology faster today than we did in the past.

New technologies are now reaching mainstream adoption much faster. Ray Wills

This situation has played out for rooftop solar panels. Over the past six years, Australia has gone from relatively few solar-powered homes to around 1.4 million now. And the same speedy uptake is set to take place for household battery storage.

In April 2015, Tesla unveiled its home battery technology, the Powerwall, which was launched in Australia last month. The cost of the 7 kilowatt-hour battery in the United States was just $3,000. When you convert that to the Australian dollar, and then add in the cost of an inverter, installation and retail mark-up, a system will cost around A$15,000.

Of course, it is unlikely to stay that expensive for long. Retailers may need to become more competitive, especially as battery prices begin to fall. But in the meantime, only a few early adopter households will buy it to start off with. Those who wait a while longer could find themselves at a much cheaper point on the price curve, at the same time that rising electricity tariffs make the cost more and more competitive.

Shop around

Tesla isn’t the only company that has a household battery system – other manufacturers such as Samsung, Panasonic and Build Your Dreams are entering the market, with some bidding to outprice Tesla.

But not all batteries are created equal. Like any product, there are variations in quality.

For those old enough to remember 1973, the Leyland P76 car was wrought with quality and reliability issues and was considered one of Australia’s biggest automotive failures. Not all motor vehicles suffer the issues of the P76, and so it is with batteries. Consumers should make sure that the kit they are buying is certified to Australian standards and comes with independent quality assurance.

Lemon, yellow. Chris Keating/Wikimedia Commons, CC BY

This quality control needs to be applied not just to the battery but also to the inverters and charge controllers. Consumers should buy from companies that have been around for a while and that offer long manufacturer warranties. Good-quality batteries will last around 12-15 years, and solar panels about 25 years.

In some Australian cities, you could get a return on your investment within 10 years, even at early-adopter prices. This will obviously get even shorter as battery prices decline and electricity tariffs go up.

Buy batteries and panels together

If you already have solar panels, you are at a slight disadvantage relative to those installing solar panels and batteries together. Those with existing solar panels will already have an inverter that can’t be used for the battery system. But if the solar panels and batteries are bought at the same time, a single hybrid inverter can be chosen.

As shown in a recent ABC Catalyst special on battery technology, there are also various different battery types and technologies being developed. Our research has developed a microgrid for solar and storage on strata apartments. This allows tenants to pay their electricity bill to the strata company to provide an additional revenue stream to owners to justify the capital investment in solar and storage. In other words, strata companies can effectively become small utilities.

This example is indicative of the wider change in our energy system, from being a centralised system to a distributed, bi-directional one. Energy regulators are looking to change tariffs to reflect this new energy paradigm. Households should bear in mind that governments may change tariffs and pricing structures, which will alter the investment proposition and payback period.

Even with so many moving elements, sunny Australia is well positioned to take advantage of the battery revolution.

Source: The Conversation. Reproduced with permission.The Conversation

   

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  • Craig Allen

    Is the need to chuck out your current inverter and buy a new one due to an insurmountable technological constraint? Manufacturers that produce storage systems that can plug into a range of existing inverters would get a significant cost advantage. We’re going to have millions of otherwise functioning inverters heading to landfill – not a good outcome or look for an otherwise environmentally responsible industry.

    • Solar Sparky

      Actually, if your chosen battery system designer / installer is actually competent and knows the equipment in the marketplace rather than just pushing whatever “all-in-one” solution happens to be the cheapest today, there are AC coupling solutions for pretty much every existing system by adding a multimode inverter / charger to your existing system. It’s simply that it might not be quite as elegant a solution as one that was designed for integration with batteries in the first place. In fact, it’s faster, and easier from a regulatory perspective than making any changes to the existing system which would then have to be brought up to current standards – hmm….anyone interested in re-running the array cable in heavy duty conduit, installing a rooftop isolator (if not already present) etc because the original system was installed 5-10 years ago? Great way to waste your money.

  • phred01

    “If you already have solar panels, you are at a slight disadvantage” Not really All one needs is a big capacity inverter and AC couple it to the grid connect inverter.

  • MaxG

    What a useless article when compared to the headline…

  • As a couple of others have already pointed out if you want to add batteries to grid connect solar you can simply AC couple a battery inverter and batteries reusing the existing inverter. If you want to run without the grid it gets more complicated because then you ideally want the inverters to talk to each so the solar generation can be throttled.

    • Solar Sparky

      Absolutely Finn. I couldn’t agree more. That said, due to the inverter manufacturers historically (and mostly currently) using proprietary comms protocols by default rather than open standard industrial protocols like MODBUS or settling on frequency shift to output ramp control there will be a lot of jobs where the first thing the customer hears will be “Nah mate, won’t talk. You’ll have to spend another $2-5k on upgrades.”. It is important for an informed decision that they know there are other, viable options like turning on discretionary or even dump loads to use excess energy via a micro PLC and contactors or even simply resorting to on/off control of the grid connect inverter based on battery SoC and a wide enough deadband to prevent hunting in the event that they are unable to export excess generation to the grid e.g. in a blackout or if yhey have gone completely off grid.