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Solar and storage: LG Chem says it already cheaper than grid

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One Step Off The Grid

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RESU6.5

LG Chem, the South Korean battery storage maker that has so far claimed the biggest share of the nascent Australian market, says that solar and battery storage is already beating grid power in most states.

The assessment by LG Chem follows similar analysis by private energy consultants, and suggests that the market for battery storage could be about to take off, even with looming threats of restrictions.

According to Jamie Allen, the marketing head in Australia for LG Chem, a 5kW rooftop solar system and a 10kWh battery storage device (such as LG Chem’s own 9.8kWh offering) can be purchased and installed for around $15,000.

Based on the assumed output of around 22kWh a day from the solar array, that makes the cost per kWh of solar power at around 22c/kWh over 10 years.

Given that most flat rate per kWh tariffs start at around 23c/kWh or 24c/kWh – even in NSW where there are high fixed network charges on top of that – the solar power is still on the money, although the battery storage is essential to ensure that much of that output is used directly, or stored for later use at night.

Of course, the actual cost per kWh of the solar output would be less than half the 22c/kWh cited here, because the panels would last well beyond 20 years.

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RESU10H

But the 10 year time frame is used because that is the warranty period for most battery storage and it is the “combo” package that is being promoted. And without storage, then much of the output would have to be exported, with tariffs in NSW as low as 6c/kWh or non-existent for some.

What does this tell us? Allen says it is that storage is crucial to maximize the value of that solar output. Every kWh that can be consumed on site will beat the cost of production.

Of course, this is not the only benefit. Allen notes that the solar system will likely last at least another decade, possibly two, and the cost of battery storage to replace the current system will also be cheaper, while grid costs are likely to rise.

And, on top of that, the solar and storage system offers other benefits: back-up power for when local or wider blackouts occur, and increasing property values, not to mention the environmental and climate benefits.

So far, LG Chem has found the NSW and Queensland markets to be the strongest for battery storage, with consumers in regional areas, particularly interested because of the potential of batteries as a back up.

“The market is looking very positive,” Allen says. LG Chem, along with other battery storage developers, is watching the roll-out of the new Tesla Powerwall 2 with interest, but is confident its product is competitive.

And while Tesla focuses on proprietary models with in-built inverters, LG Chem is partnering with a range of companies including SMA, Solar Edge, Selectronics, Redback, Sungrow, Goodwie, Ingeteam, and Victron.

But Allen is also worried about moves by regulatory authorities to restrict the installations of battery storage devices, and effectively ban them from homes and garages and require them to be installed in a separate enclosure.

He says LG Chem safety tests have been exhaustive, and more than 30,000 LG Chem residential systems supplied globally with no fire or safety related issues.

A further 500,000 EVs and hybrid vehicles have used the company’s battery cells, again with no fire or safety related issues, and LG Chem lithium products are approved to be shipped via air. Yet Australian authorities want to ban them inside homes.

“That would go far beyond anything else in the world,” Allen says. “It looks like Australia is going to overcook (the regulations), and it will end up costing the consumer more.”

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

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  • stalga

    I can’t help but think that these proposed standards are yet another attempt to stall the growth of renewables.

    If worse comes to worse, a decent handyman or tradesman could build a fire-rated unit with a vent for roughly $1000, perhaps a prefabricated unit would cost similar.

    • Brunel

      Then they should not ban luxury showers either. We have desalination plants and a growing population and the trains are overcrowded. Plus people cycling to job/study.

      • stalga

        I’ve no idea what your point is.

        • Brunel

          You were talking about the proposed ban on Powerwalls.

    • MaxG

      Of course there is political force behind it all — apply the brakes on renewables and anything to do with that wherever possible.

  • Phil

    And in the Greater Sydney Area (new south wales) i just watched a News story about how they cant install enough smart meters quick enough now the 60c a kwh solar Feed in Tariff has ended. And with NO MENTION OF TIME OF USE (T.O.U) and smart meters themselves being an “opt out” for solar contributors . Let alone Gross versus net metering ramifications.

    With 2pm to 8pm T.O.U in Greater Sydney as a standing offer being 49.6 cents per kwh inc gst i would think a lot of bill shock is due out there from now onwards

    No wonder battery manufacturers all over the world are “frothing at the mouth” about battery storage potential in Australia

    It must be the highest electricity cost globally by a massive margin in a country that has abundant solar and rooftop space for solar.

    Go figure !

    • MaxG

      Remember we are the smart country! :))
      LMAO… about all the clown who voted them in!

    • Jonathan Prendergast

      ToU does not necessarily mean higher electricity costs. They are accompanied with lower shoulder and off-peak rates. I couldn’t believe how high the peak rate is. But when I analysed my friends bill, as they got bill shock, it turned out they had doubled their consumption, and that switching back to flat rate would have only saved them 4%.

  • brucelee

    I would like to see the calculation include the replacement if battery system after 10 years (at forecast future price) , to take the price/kWh to a 20yr figure that residents can bank on.

    • Ren Stimpy

      At one – or more – order of magnitude lower than today’s price the future price of a replacement system 10 years away is neither here nor there.

      And the home battery system they buy at that order of magnitude cheaper price in ten years time will last for the following 20 years, twice the duration of today’s systems.

      • Richard

        That’s right. So basically with distributed solar/wind and battery large scale energy generation of any type is going to fall off a cliff in about 10 years.

        • Ren Stimpy

          That’s progress!

          • Richard

            Yes, and markets have no sentiment!

    • Jo

      The sunulator http://www.ata.org.au/ata-research/sunulator has a provision to include battery storage in the calculation.

  • Robin_Harrison

    Expect the FF industry to get increasingly dirty and desperate as the FF age comes to a close.

  • solarguy

    According to Mr Allan $15k will get you a 5kw PV system and a 10kwh LG battery purchased and installed………… NO it won’t !
    So the modelling of 22 cents/kwh over ten years is fantasy. These guy’s need a reality check, big time.

  • wholisticguy

    The stated 10 year warranty period needs a close inspection. It appears to me that in some circumstances the customer will receive only 2% of the purchase back as warranty compensation after 10 years. http://www.rpc.com.au/pdf/LG_chem_RESU_6.4EX_warranty.pdf

  • What is the going rate for battery installation? I’ve seen an offer for the RESU9.8 for $5,500 (before GST) – surely installation can’t be more than a few thousand dollars?