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This battery storage revolution could happen quicker than we thought

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One Step Off The Grid

The battery storage revolution is taking hold in Australia, and may even occur quicker than most pundits thought – despite lingering uncertainty about whether consumers will actually be saving any money in the short term.

Debate rages about the ability of battery storage – when added to rooftop solar installations – will deliver an attractive return on investment. For some it already does, as this farmer discovered.

But it seems that many consumers don’t particularly care – installers say they are being flooded with enquiries, and customers want them even if they are told they won’t save money.

According to Nigel Morris, the head of solar and battery storage installer Roof Juice, battery storage installations are running at about 200 a month.

Origin Energy, one of the big retailers that has signed up for the Tesla Powerwall and other battery storage technologies, says it has installed a few, but has interest from 2,000 consumers – demand which it hopes to satisfy within the next few months.

Stefan Jarnason, the CEO of software developer and systems integrator Solar Analytics, agrees with those assessments. He estimates that installation rates will run at about 4,000 to 5,000 in 2015 – before surging ten-fold in 2016 to around 40,000. That is when the industry takes hold.

There are many reasons why battery storage is popular – the ability to exercise consumer choice, to have greater independence, to stick it up the big corporations, to capture the benefits of their solar systems (as feed in tariffs decline), and to do their bit for emissions abatement, particularly as the federal government policies cause a rise in national emissions.

NSW is expected to be the biggest market initially, particularly when 140,000 households lose their premium feed in tariff at the end of this year. Steve Blume, from the Australian Energy Council, says 60,000 households may choose battery storage in the first year after losing the premium tariffs.

102723121-471769866.530x298And two other things have captured the imagination of consumers. One is this man, Elon Musk (pictured right) the founder and CEO of Tesla, who has managed to reduce the complexity of battery storage to a brand name, and a choice of colours.

As Jarnason told a solar conference last weekend, Musk has managed to sell $1 billion of battery storage devices, the Powerwall and the Powerpack, even before he had a product, and before he had even built a factory.

The second event is publicity. According to Glen Morris, one of the country’s leading experts in battery storage, and a vice president of the Australian Storage Council, the recent Catalyst program on ABC TV, which featured battery storage, has sparked huge interest in the technology.

“The Catalyst program generated an immediate response – batteries are here now, and the industry is trying to respond to this demand,” Morris told One Step Off The Grid.
Jarnason agrees. “Tesla sold a billion dollars of product with no marketing, no actual product, and no factory, but he did it because of demand.”
He notes that it is not just Tesla that is targeting Australia as the world’s first big market for household and commercial battery storage, but a veritable who’s who of international technology companies, including Panasonic, LG, Samsung and Enphase, and inverter manufacturers Solar Edge and SMA, and local products such as Redflow and Ecoult, and software companies and integrators such as Sunverge, Reposit and Redback.
“The battery boom is coming,” Jarnason says. “All these companies believe it is coming. They don’t spend billions of dollars (on technology development and marketing costs) for altruistic reasons.”
“They want to make a lot of money. And they will make them cheaper and better because that is the only way to sell more batteries. And they will get cheaper and better.”
He says every solar system will have battery storage eventually, and Australian homes are still adding 150,000 systems a year, and more than 1.5 million homes already have solar PV. The industry will grow into smart technologies and link with electric vehicles, as Tesla, Mercedes, BMW, Nissan and others lead push into EVs.

John Grimes, the chief executive of the Energy Storage Council, says  Australia is at the leading edge of the biggest transformation in the global energy industry. He estimates that two thirds of solar installers are being asked about battery storage.

“Australia can learn a lot and take these learnings to the world,” Grimes told the Queensland Energy Storage Summit on Wednesday. “A coronation is under way. Technology is giving power to the people and customers are no longer the voiceless observor of energy technology.”

The CSIRO recently updated its study which shows that up to half of all electricity will be generated on site – in homes, businesses and within communities, within a few decades. Depending on how the incumbent industry adapts, this will create a new integrated grid, or one third of all consumers will leave the grid.

“This transformation is already under way,” said Mark Patterson, the head of grid and renewable energy systems at CSIRO Energy. “We will be the first low carbon economy in the world if we can manage this.”

Glenn Walden, the head of emerging markets and technologies for Ergon Energy,  the biggest network by land area in the country, agreed: “The future is closer than we think.”

This article was originally published on RE sister site, One Step Off The Grid. Click here to sign up for the weekly newsletter

  

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  • Chris Marshalk

    The reason I’ve not gone solar yet is because of the poor feed in tariff rates for solar.

    However, the situation now changes as you can now store your electricity in a battery and use less from the grid or get off the grid completely. I expect the power storage density of batteries to improve or double in the next few years.

    • Diego Matter

      You`ll enjoy cheaper electricity only with solar PV.

      • MaxG

        Correct; my last bill was $5.17 for the quarter 🙂 (on 6C FiT)

        • solarguy

          Makes you feel good doesn’t it Max. I love sitting on my back patio of an afternoon with a drink after a long day, watching my Western array saving me $’s. Smells like, victory.

    • solarguy

      If your house is unattended during the day PV can still power your fridge, freezer, dishwasher, washing machine, pool pump and pre cool the house. It’s not about FIT rates, but self consumption.

      • eddierothmanisatool

        sorry solarguy responded at and saw your comment. cheers

      • Chris Marshalk

        There is no one home during the day so hardly any electricity being used. My yearly electricity is $650 per year. The payback will be years. What i need is an affordable (solar + battery) storage package.

        Also looking forward to http://www.e-catworld.com/2016/02/16/rossi-domestic-e-cat-can-generate-at-least-300-500-w-of-electricity/

        • Brian Tehan

          I see your point but, as per the previous post, if your washing appliances can be timed to turn on during the day, you can use more of your own power. Also, if you have reverse cycle air conditioning, you can time it to preheat or precool your home while you’re generating power. This will time shift more of your consumption.

    • eddierothmanisatool

      chris FIT is not relevant. its all about your load profile. if you work from home solar will provide you quick payback at LCOE of 9-12c/kWh. this is cheaper than the grid regardless. lithium density is increasing around 8-10%/annum and price is falling at least 20%/annum. that said as i have previously posted. the powerwall was announced in may 2015 at 350/kWh. chevy announced the bolt in november 2015 at around 175/kWh using LG chem cells. so 20% is just BNEF figure. cheers

      • nakedChimp

        Maybe in $US.. the AUD is tanking, prices for LFP are going up slightly atm (+10% last 8 months).
        Don’t know about the local guys, like Redflow. But as they can sell offshore, the same thing might be true as is true now for NG.

    • Jo

      Investing in PV will give a much better financial return than investing in batteries. One problem is that solar guys usually only speak about payback time or use the term ‘return on investment’ (ROI) in a completely wrong way. This makes investments in solar PV incomparable to other investments.
      But there are better ways, like e.g. using the ‘comparison rate’ (IRR):
      In this example http://www.sun2steam.com.au/index.php/solar-pv-investment-calculator/ you can see how a PV system calculated with a conservative approach can provide the investor with an interest rate comparable to putting the money in a bank account with 16.6% interest. (You can enter your own numbers to find your individual results.) Where else can you find such a tremendous investment!?

    • wmh

      In NSW most domestic energy is used for heating so it makes sense to store energy, not only in batteries, but also in hot water. Hot water can be used for hydronic heating and has an energy density of 65kWh/m^3, about 2/3 that of lithium (94kWh/m^3), operating range 90C to 34C and at 20c/1000L much cheaper.
      (Google: Hot PV)

  • phred01

    The Ordinary Joe is sick & tired of by screwed by the electricity industry. Remember Jeff Kennet touting that the SEC in private hands would deliver cheaper power in the long run. This was further from the truth we have highest power in the world kwh went from 8c to 30c+ & the connection twice of everyone else. No wonder everyone is thinking of off grid

    • frostyoz

      Don’t let the facts get in the way of a good complaint.

      The average wholesale price of electric power in Victoria in 2014-15 was 3.9c/kwh. The average wholesale price of electric power in Victoria in 1998-99, when the national market started, was 3.6c/kwh, which when adjusted for inflation by the CPI is equivalent to 5.5c/kwh in 2015 dollars. Therefore, in real terms the average wholesale energy price in Victoria has fallen 30% since the commencement of the national electricity market. And fallen 55% in real terms since the SECV’s generators were privatised in 1994-1995.

      Network charges have risen, but they are capped by government regulators. Maybe it is the government that has let you down.

      And if you think you are poorly off in Melbourne, household network charges in government-owned Sydney (Ausgrid) are double those of privately-owned Melbourne (CitiPower).

      • phred01

        There is no point of comparing what is a distorted market in Oz. For all the commodities like petrol gas etc we are slugged based on global pricing. Yet power seem to be an a corrupt electricity market. My cousin in Montana pays about the same for the meter charge but the punch line is she pays roughly 10.7c /kwh peak retail. @ this price she can afford to heat her house in winter using electricity. On a comparison basis Montana is as sparsely populated like Australia and is resource rich. The system here is obviously corrupt with millions being gouged from us!

      • Damien van Hoogen van

        Yes you are right.

        It’s not the wholesale price that’s hurting us though – it’s the network charges which are many billions in excess of what we need. The building of which is meant to regulated by the AER – which it was in a way – but with no plan for the future…just a rubber stamp. Natural monopolies rarely take well to regulated privatization. Economists know this but politicians are not economists.

        Worth mentioning also that recent report found that retail charges in VIC are as high as network charges. Yes retailers perform a few useful functions but most of that money is likely wasted (in a macro sense) on advertising and churn administration.

        Re-nationalize please

    • MaxG

      Eventually people are fed up and do their own thing… great!

  • Radbug

    Along with Negative Gearing and its effect on the residential property sector, the cartel’s “gatekeeper” role vis a vis the grid is one of the two most grievous factors pulling this nation’s industrial productivity performance. I do not like people spending so much money on storage because they don’t like the cartel. I would much prefer to see people investing money in storage in the context of a written-down, level playing field grid cost. Two wrongs don’t make a right.

    • Mike Shurtleff

      Home/business storage is the leverage that will force constructive change in the grid. The utilities and government puppets can change or get hurt worse. Their choice. No chit-chat. In this case two wrongs will bring justice.

    • Mike Dill

      Rad, I completely agree with you. Unfortunately, the only choices I have are to support the utility or leave the grid. I wish that it was not this way, but those are the only options I see.

      • Radbug

        It makes me weep. The sheer waste of capital. From derelict iron ore mines, derelict coal mines, derelict CSG infrastructure, LNG plants, Desal plants, gold-plated electricity grids, capital gains tax-free macmansions (like, everyone in Essendon has added a second storey!). We will pay for this! Divine Retribution will be meted out to this nation of sybarites!

  • Ian

    Love the idea of home electricity storage, desperate to go off grid and stick it to the networks, fascinated with Musk’s powerwall, but when the rubber hits the road, I might wait a bit until the payback time of batteries is three to five years. I’ve got kids to educate, holidays to have, bills to pay. I might be annoyed with the networks , but not that annoyed. Maybe next year I’ll reassess. Sorry guys but as an average Australian I might say I’ll fill my garage with batteries but actually I probably won’t.

    • solarguy

      To go off grid a Powerwall won’t work as it isn’t an Inverter, just a charger. Because of this fact it needs the grid to operate, a fact not widely known and won’t produce power in a black out either. Where other, more cost effective units will. Redback is just one of them.

      • Mike Shurtleff

        you mean Redflow?

        • solarguy

          No, Redback Hybrid Inverter/charger.

          • Mike Shurtleff

            Ah, makes a little more sense. Thanks.
            Pretty clear you can also add an inverter to Powerwall.
            More than on path up the mountain.

  • hydrophilia

    Storage is important, but this Rocky Mountain Institute blog says that one can get a far better return with “flexiwatts”, shifting usage with smart appliances or smart controls. This is true whether you are faced with high demand charges, time-of-use charges, insultingly low FITs, or are dealing with the exigencies of being completely off-grid. I think that one could get by very nicely with a good-sized PV system, small storage, and smart/flexible usage.
    http://blog.rmi.org/blog_2016_01_07_what_are_flexiwatts_and_how_can_i_get_some

    • Ian

      Nicely said.you might add NegaWatts, to this equation, insulation, heat pumps and the like.

      Also as lithium batteries approach economic viability, electric vehicles will become competitive with the usual ICE variety, we have got to dual purpose these batteries on wheels. Why worry about smarts, or prolonged rainy days, or expensive grid connections. When the juice is running low, just hop in the electric car, nip over to the nearest supercharger and fill’er up. Going camping, plug into the car. Cabin in the woods, take your electricity with you. Community power outage, lend a hand with your mobile power source. You might call this MobileWatts or GoWatts.

      • Rob

        Your EV becomes a mobile mini-power station? I like the idea a lot!

  • patb2009

    the Electric company isn’t the most popular entity out there.

  • Radbug

    My pensioner rebate of $AU74 per quarter makes three panels + 5kWh Redflow storage a financially marginal proposition. However, thanks to the “post-mining bust miracle” economy we now live in, the one that just shed 40,600 full-time jobs over Christmas, it looks like the holders of the Seniors card will have that $AU74 revoked. I’m betting the pensioners’ card holder rebate will be next in the firing line. All this means that the 3 panel/5kWh Redflow combination is going to see a lot of enquiries. Pensioners are asset rich & income poor. It’s just this sort measure that will see hundreds of thousands of pensioners liquidate a couple thousand dollars worth of those assets and buy that combination above. Pensioners are frugal, miserly even. Do you recall that survey that found that many pensioners die with more assets than they retired with? Many, many, consume 7.5kWh or less. Redflow & the solar installation people had better get their heads around a 3 panel + 5kWh Redflow battery combination soon because a huge retiree market is opening up.

  • rolfinSA

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    By challenging the traditional thinking of how a battery works and the
    clever re-imagining and the redesign of the battery from the inside out,
    Mega Amps has successfully tackled and overcome the age-old problem of
    heat build-up, charge resistance and scalability – all in a single cell
    capable of operating in the harshest of conditions at optimal
    efficiency.

    For the first time in the history of utility scale energy storage,
    cylindrical, single-cell batteries can be constructed on-site, at the
    point of use, using locally produced materials in exact ratios which
    vary according to the desired size, capacity and performance of the
    cell.

    Efficiency of 95% at a cost of less than $100/kwh and a life expectancy of up to 25 years is no longer a dream but a reality.

    contact: rl@spinova.net for more information

    Investment opportunity abounds