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Enphase says solar + storage market ‘infinite’, ahead of Oz battery pilot

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When the world’s biggest supplier of solar inverters (sometimes described as the “brains” of solar PV systems) sets up camp in Australia, it’s probably a development worth noting. California-based “solar-tech” company Enphase opened offices in Sydney and Melbourne around 18 months ago, and since then, has been working on some fairly big plans.

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Enphase’s Olivia Smith holds a prototype of the AC Battery unit, which will weigh 18kg

These plans involve its Enphase AC Battery: an astonishingly compact (see picture right) modular plug-and-play energy storage system which, when used with the company’s cloud-based Enphase Energy Management System, allows consumers to store and manage their rooftop solar energy supply and control their overall household energy use – all with an eye to cutting the cost of electricity bills.

As Enphase CEO Paul Nahi puts it: “if the idea is to give more control to the consumer over their energy, with the goal, initially, of reducing their energy bill, then you have to have storage. You need to be able to use your energy when the solar isn’t there, and that needs storage.”

Enphase’s new and potentially ground-breaking energy storage product was launched at this year’s Solar Power International conference in Las Vegas in October – a product launch that PV Magazine since nominated as the event’s most notable.

As the company revealed back then, pilot testing of the new product is slated to begin in 2015 in the US, Europe and Australia. And according to Nahi, the Australian pilot program will be one of the biggest.

So why Australia?

The first thing Nahi is keen to stress when asked what appeals about Australia as a growth market and testing ground for solar plus storage, is that favourable solar policy is not a prerequisite.

“We don’t look at immediate solar policy,” he told RenewEconomy in an interview in Melbourne on Thursday. “Solar policy, by definition, swings left and right.”

Enphase CEO Paul Nahi

Enphase CEO Paul Nahi

“Our goal is to provide the technology to enable mass adoption of solar. We look for political stability, we look at the right insolation, we look at GDP growth, we look at a bunch of things that make up a viable long-term solar market, and Australia certainly does fit that bill.

“The Australian solar market is actually fairly advanced,” Nahi adds. “The US is still years behind Australia, which in a way, represents an opportunity for us, because we can create products and services that an evolving, a burgeoning solar market really needs and can leverage. Storage is a perfect example of that. (It’s) really one element of the energy management system.”

And according to Nahi, that is where the global energy future lies – in efficient, high-tech energy management.

“Enphase is… a high technology company in the solar space,” said Nahi – an attribute, he adds, that separates it from the solar pack, the vast majority of which have evolved from a deep industrial background.

“Our view, say, two to three years out; we actually don’t believe that people will sell a solar system, or buy a solar system, we believe that you are going to buy an energy system. That will necessarily include solar, but it will also include storage, it will also include load management, and it will be wrapped up in a software package and a financial package.”

Sounds like a no-brainer for the consumer. But for utilities – especially those wedded to centralised, f0ssil-fuelled grid infrastructure – it’s a bit more complicated.

“Solar is so disruptive, really, to a very venerable, long-term industry, that it is going to cause some challenges,” said Nahi in Melbourne.

“In the US, we see some utilities embracing it and owning it and others pushing it back as hard as they can, and everything in between. Some utilities see solar as this existential threat, others view it as a tremendous opportunity.”

But having worked closely with utilities in the US, such as Hawaii’s Heco in the US, Nahi is keen to stress that there is still a key place for the utility in the future energy picture.

“We are absolutely not a big fan of ‘let’s take everybody off-grid’. I would actually say, that’s completely insane,” he said.

“We don’t want to take everybody off grid. What we do want to do is to provide the consumer the ability to manage and create their own energy; to do it in an affordable way, to do it very simply.

“(We want to) work with the utilities, to help them embrace solar, and recognise that in some cases, business models will need to change.”

“The trouble with utilities,” adds Nahi, is “they kind of move glacially. And I know why they move glacially, and some of it I get. …The fact that we have consistent and affordable energy is powerful. We don’t want to mess with that.

“At the same time, we know that if we stay the course, we’re in very big trouble. Both individually, because the cost of energy is going to continue to go up – and by the way it will go up even if you don’t include the price of carbon. I can almost guarantee that carbon will be priced, in different countries and at different rates, but it is absolutely coming.

But, he adds, getting back to business, “as much as we need to do this for the planet, the reality is, unless I can give you an economic benefit, I’ve got a very limited market. If I give you an economic benefit, I have an infinite market..”

Still, Nahi’s long-term vision involves working with utilities.

“(In the US) we know more about the grid than they do, which i know sounds a bit odd, but our systems are very very sophisticated – bi-directional communication, so we know what’s happening with the inverter, …but we also know what’s happening with the grid, with the AC side of things as well.

“There are very few companies in the world that know how to manage close to a terabyte of data every single day, let alone solar companies. That business model is a very well proven business model.

“The goal is to stabilise the grid, while we increase the penetration of solar. That takes policy, that takes technology, there’s many parts of that. We view it as our responsibility to be a participant in every portion of it.”

But while policy does come into the equation, Nahi says the politics behind it usually has nothing to do with energy.

“It’s very hard to out-lobby traditional fossil fuels. In the US, they’re very entrechned in the system. So really what we have to do is we have to outcompete them.

“I have no interest in beating them in Washington, I want to beat them at the consumer. I want to provide a better solution, and I can do that through technology and innovation. And that’s exactly what’s happening.

“Solar is growing as fast as it is because it is a cheaper, cleaner alternative. And the dynamics behind that are doing nothing but getting better. Solar’s costs are coming down, the utility prices are going up.”

“The frustrating thing about this is that the technology to (use solar and storage to benefit utilities and consumers) exists,” Nahi said. “This is not a technology problem any more. It was a while ago. It is no longer a technology problem. This is now purely policy.”

Enphase’s latest model micro-inverter is a key part of this new round of distributed energy technology, in that it uses bi-directional power flow – that is,  AC to DC and DC to AC – thus giving rooftop solar owners the ability to introduce a storage product.

Included in the AC Battery unit alongside the lithium-ion batteries themselves, the micro-inverter means customers can hang it on a wall, plug it in, and have solar plus storage. And you can connect it with other devices, too, such as an electric vehicle.

And while there’s no mention of the cost of the units – including access to the Enphase Energy Management System – as yet, Nahi says the price will be very competitive.

As Nahi has said, the many benefits of solar and energy storage are obvious. What’s not obvious, however, is who owns the storage.

“It’s possible that the utility buys the storage and puts it behind the meter; or the consumer, with a contract with the utility. I don’IMG_0345t know that there’s a single best solution, says Nahi. “This is a time of exploration and experimentation.

“The battery market today reminds me of exactly where solar was in 2007,” he says. “In 2007, everybody was excited about solar, but we weren’t sure why. It was so expensive!

“But there was this sense that it was going to be huge. So it’s kind of like, forget it, let’s just make it happen. And now look.

“Batteries feel exactly the same way. Everybody’s excited about it, everybody recognises it’s going to happen. And nobody has any idea how it’s going to work. And we’re ok with that. We understand that we have to get to scale, and that’s going to occur over a couple of years. But we have to apply technology to that.

“We’re going to learn a lot,” he adds. “The energy industry is going to change more in the next 10 years than it has in the past 100. There’s a huge, really seismic shift that’s occurring.”  

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  • Andrew Woodroffe

    Like the honesty here, “And nobody has any idea how it’s going to work. And we’re ok with that.” Behind the meter means playing with retail prices and large numbers of cycles and economies of mass production. At the substation or street transformer the storage economics enjoys the leveling effect of many household loads and solar systems and economies of scale but suffers differences in only wholesale prices with far less cycling. Of course, in rapidly expanding areas, storage would be offsetting the cost of new network infrastructure – as more customers would be able to be serviced with the current sticks and wires.

    Interestingly, micro inverters will NOT be able to provide the extra efficiency of not converting all energy from AC to DC and back when cycling batteries. Normal inverters can be built with the ability of switching excess generation direct to the batteries in DC, thus avoiding losses in needless DC/AC conversions.

    Disclaimer, I have 6 x 3rd generation Enphase micro inverters on the PV at my place. OK, so far.

    • Pedro

      I have spoken with enphase staff about their system. There is a bi directional micro in the battery box. You still have micro’s under the panels as well. From what I gather is that each battery box can supply up to 300W of load (could be wrong on this) and battery pack has 1.2kWhr of usable storage.

      • Andrew Woodroffe

        Yes, but you would not have batteries for each panel seating beside the micro inverters at the back of the panels, they would be somewhere central and out of the weather. Am actually very interested in 2 of those battery packs.

        • Pedro

          Battery box is undercover out of the weather, and you don’t need panels at all. The system can be used as a UPS. I think you will be able to program the system to charge bank with off peak power to be used during peak times.

          I do sell enphase amongst other solar related products

          • john

            Exactly as I saw it a UPS system

          • Ben

            yes and a car is just horse buggy without a horse 😉

      • john

        If only 1.2KwH then this is a little bit small to be of much help.
        At least 8-12 KwH flow storage a better option especially as they can be half charged and discharged with no ill effects

        • Pedro

          You would get 8-10 battery boxes. Battery bank is essentially in parallel strings. Bidirectional inverters are in parallel to supply load. The concept is a totally modular system. You can add battery capacity a bit at a time when you can afford it or as needs change.

          • john

            Pedro
            I would think the item is an LI battery which is not able to be discharged to low level and will not cope with paschal discharge recharge.
            For home storage a flow battery would be a better way to go.
            I honestly do not see a market for this item from a company that installs PV, however as a consumer item sold at a hardware store it will sell and be of no use at all.

          • Ben

            lithium batteries habve cycle lives in excess of 10k discharges, and those are “deep” discharges (ie to the limit decided by the control elecrtonics) unlike things like lead acid that can only be “fully” discharged a few times, and even then, that is only till they hit 80% capacity, which is still plenty.

            10k cycles might be 30 years or more!

            flow batteries might improve on that, but that is not something to sneeze at.

            (I have used a few 35 ah ~12v lithium (LiFePO4) batteries an average of 4 times (each) a week to run an inverter, to full discharge, for quite a few years now, still going strong, and they are old technology now)

          • john

            Ok
            I still contend that the half charged half discharged factor is a problem with LI batteries.
            What is needed is as I said 8-12KwH probably more in fact to be a reliable back up to PV.
            I am hearing you re lead batteries they die if fully discharged.

          • Pedro

            John
            It is a lithium battery in the box with bidirectional inverter with all the BMS. Not sure how long a Li battery could be left in a low SOC, but wouldn’t be much longer than a 24 hour cycle.

            Have to wait and see if there is a market for this in about 12-18 months and more importantly that it works as well if not better than your standard customized grid battery back up system. Definitely a different approach to PV with battery back up. At this stage I like the concept, how much I like it depends on cost

            I think the battey box system ends up being hardwired into the switchboard, so need an electrician to install.

          • john

            Pedro
            I feel we need minimum of 12 KwH frankly.
            Flow Batteries will do this and yes be on the market here in Au pretty shorty after all there is one company in Brisbane that has a leg in this market.
            Some of the start-ups will fail for sure.
            To get a feel for what I am saying just go read you meter 3 times after 4pm then in morning say 8 am and then at 4 pm.
            This will give you a peak use after 4pm, which has to be supplied by a battery, I bet the figure you get will be in the 8-15 kwh range.
            Yes it will also give you the day time use to do this well do in during the week and on weekends.

          • Pedro

            I will give it a go and see what I come up with. Be interested to look at flow batteries as well

          • Paul

            yes, now couple batteries to discharge thru the peak period of TOU

          • Johnny Elvis

            Probably more like 20 of them to have some serious backup for the power outage…at least enough to get through the night before the sunrise…

          • Pedro

            At this stage it will not be a serious back up system in the case of an outage. Initially the enphase system aims to increase PV self consumption. I have been told that enphase are working on a true offgrid system but a fair bit of testing needs to be done before that product is bought to market. I estimate 18-24 months. You are right about 15-20 boxes would be needed if you wanted a serious system to get you through a long power outage without a noticeable lack of convenience.

          • Johnny Elvis

            Hey Pedro…I am not an expert, but I’ve been really looking into a 1,000-Amp-hour NiFe battery solution; the nickel-iron batteries can be drained down completely without hurting them, and unlike the lead-acid batteries, you can add new or replacement batteries to a given set of batteries without problems. I am told that the lead-acid (cheaper) batteries must be configured in a complete set whereby you cannot add to or replace one battery, otherwise the system will be affected negatively. It is really expensive, too, for the NiFe system, … about $23K just for the batteries for 1000-Ah and not including an AC-coupled inverter system to control the DC-to-AC power manipulation into your home electric grid which is about an additional $7K. Question is: in terms of Amp-hours, how many Enphase AC batteries will one need to produce, say, a 600-Amp-hour system? The AC battery comes with a built-in inverter (? S275) which allows for a decentralized solution, that is, no single point of failure for the batteries as you would have in a single central inverter for a battery farm. Plus, the integration of the batteries into the Enphase Enlighten Internet (smart) monitoring is a real advantage for the end-user who just wants a way to know that their system is functioning 100%. For people who understand the power of Enlighten, I know they are waiting and hoping for this AC battery solution to be a real addition to their existing home green energy solution.

    • Peter Thomson

      The big selling point of Enphase’s system is its modularity and ease of expandability. Want more PV? just mount them up and hook them to the AC line. Want more battery? Just plug them into the AC line. Dead panel or battery? Just plug in a replacement.

      Undoubtedly there is an efficiency loss associated with this approach, but it may not be so bad; E.G.; each panel has it’s own individual MPPT, so shading on one panel doesn’t reduce the output of the whole array.

      Just a thought, but there may well be a market for just the batteries without the PV. Imagine adding battery storage behind the meter when you have time-of-day tariffs – charge the batteries during low tariff periods and use them to reduce your grid consumption during peak tariff times. Economic feasibility would depend on the tariff levels.

  • JohnD

    I think that Enphase will be overwhelmed by the interest in their battery storage from rooftop grid owners wanting to go off grid. I will be shocked and stunned if they garner any interest from utilities as they are dinosaurs determined to make themselves extinct. The government’s anti- renewable’s stance combined with Australia’s high electricity prices present Enphase with fantastic business opportunities. The death spiral is closer than the utilities think. I hope that Enphase may be able to partner with the Very Small Particle Company to advance their battery technology.

    • greenmail

      The Very Small Particle Company is mighty quiet as I see their webpage.

  • Justathot

    Boy, am I glad I bought shares in Enphase.

  • Michel Syna Rahme

    “…..we have to outcompete them” !!!!!!!

  • Rob G

    Think of this utility nightmare scenario: Imagine storing energy from the grid at low peak times and using when the high peak time hits. This will effectively wipe out peak pricing. I’m not sure this is possible with this storage but the thought is amusing and certainly seems doable. To make it worse for utilities you won’t even need solar to manage your energy and save, you just use the grid in a smarter way. There may be situations (if this really is possible) where people buy storage first and then ‘upgrade’ themselves later to solar.

  • Matthew Kendall

    By my calculations – to get a 20% ROI you would need each 1.2 kWh battery to retail fully installed at $800… At $1,000 they would I model have a cost neutral real world return.

    There are a reasonable number of assumptions on this but that is basically a 9.6 kWh solution (8 batteries in a 4 series (550W) * 2 grid) used 180 days a years for 3.6 hours to give a 2.2 kWh boost at peak times saving say 55 cents and hour (opportunity cost of not feeding the grid of 8 cents) over ten years… So the challenge here is can the company produce these units at a price point to allow a realistic real world return.

    The economics change favourably if the batteries are allowed to be re-charged from the grid – something that I could see being blocked / challenged in the courts by the energy retailers…

  • Alfred Jones

    How many Enphase Solar Batteries would be required for a small home, with just two people in residence. I am hoping that someone could make an estimate of this figure,
    We are not looking to go off grid, just want to cut our Electricity bill. We currently have 20 X Solar Panels 250V, but we only get paid 6.3 cents per kWh, which is no big deal.