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Sonnen battery storage plan to take utilities “out of business”

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One Step Off The Grid

Christoph Ostermann, the founder and CEO of German battery storage developer Sonnenbatterie, could hardly believe his luck: Just as he prepared to announce a plan to take Australia’s energy utilities “out of business”, the utilities announced – en masse – a near 20 per cent jump in the cost of grid power.

The Australia battery storage market – already seen by Sonnen as the one of the most promising in the world thanks to its  excellent sunshine, its high penetration of rooftop solar, volatile energy markets and extremely high retail electricity prices – suddenly got even more attractive.

“It was perfect. We said: ‘Thankyou very much’,” Ostermann told journalists at the launch of the Sonnenflat battery storage retail product in Sydney on Wednesday night.

Sonnen unveiled what it describes as a major assault on the traditional energy utility business model by introducing a unique offer that replicates the sort of deal consumers can get from a mobile phone company, and with a quick pay-back.

“That’s our goal, to take the traditional utility out of business,” Ostermann says. “What we do is provide grid power for free.”

sonnen flat 1

Well, not quite, but almost. A household with at least 5kW of solar can buy one of Sonnen’s battery storage systems, and then be provided with all their electricity needs for a flat rate of $30, $40, or $50 a month, depending on the size of their solar system, storage and daily usage.

This graph above illustrates what is available. An average house will be able to consume around 10,000kWh a year, or nearly 30kWh a day, and cut its annual bill of around $3,400 to just $480 a year.

Of course, you also need the battery storage, which might cost around $15,000 for an average system. But even this would provide a pay-back within 5 years, and so once paid off the only cost to the consumer is the annual fee. Sonnen provides a guarantee for its storage systems of 10,000 cycles. That effectively gives it a near 20 year life.

sonnen flat

The Sonnenflat product is designed to take the hassle and confusion out of the solar and storage equation, which can be devilishly complicated for the consumer.

It merges, into one product, the various new concepts such as peer-to-peer trading and virtual power plants. The participants in the Sonnenflat will essentially sell excess power to each other, or to Sonnen, who then package it up and use it to trade – via a third party – in the wholesale and other markets, such as ancilliary services.

For the customer, it takes away the pressure and worry about when to use appliances. They don’t have to care about load shifting or how much is stored or exported or drawn down from the grid.

For a flat fee, Sonnen will take care of it, the customer users what they want, within certain parameters. (And, it should be pointed out, it may not be available in areas with very high fixed network charges, such as in Essential Energy)

Sonnen says it already has around 600-700 battery storage installations across Australia since it entered the market last November, and by the end of this year it aims to have 2,000 customers taking part in its Sonnenflat system. That equates to a “virtual power plant” of around 20MWh.

But in 2018, it expects to increase that number four-fold (80MWh) and then to double it each year.

Ostermann says the market is ripe for the picking, particularly the existing fleet of rooftop solar. If one quarter of the 1.6 million households signed up for his deal, then that would equate to a virtual power plant of 1.4GW – nearly the size of the Hazelwood power generator that closed down earlier this year.

He sees the retrofit market as the most promising, because many households have effectively paid off their solar system. But the falling cost of solar panels also makes it attractive for new customers.

Professor Ross Garnaut, the chairman of Zen Energy, the Adelaide-based battery storage developer which has a partnership with Sonnen, described it as an “important step in Australia’s energy transition.”

Would this kill the traditional energy utility business model, I asked him during the presentation. “That’s the idea,” he said.

Indeed, Ostermann says that utilities that do not evolve will die. But Sonnen is seeking alliances among the incumbents as well. Before the launch, it was holding discussions with AGL Energy about using its wholesale market trading systems.

It has also signed up a small retailer to manage the customers. It wouldn’t say who it was, but RenewEconomy understands it is the new energy start-up Energy Locals.

Ostermann says that utilities will have no choice but to write down their assets as they understand the implications of all this rooftop solar and battery storage providing “free electricity” once their purchase price has been amortised.

“They are sad and happy at same time. They are laughing and crying. It’s like standing at train station and watching (a train) leave and trying to run and catch up with it when they realise ‘oh shit, our business model is disrupted.’

“They are trying to adapt. They are intelligent enough to recognise that it is impossible with their current model.

“If you look 10 years ahead, you will see amortised PV sites that are generating electricity at zero cost. New installations are getting cheaper and cheaper. They will have to write off assets they sitting on.”

The indications are that battery storage market is showing signs of rapid expansion, according to Jonathon Fisk, co-founder and director of Solaray Energy.

“In June alone, Solaray took orders for over half a megawatt of storage just in Sydney and we see the Sonnenflat product adding to our rapid and continued growth,” he says.

“It will give our customers the option to never pay for energy again. This is the model for the future and could well be how the majority of batteries and solar PV is bought in the future.” Solaray also distributes Tesla and Enphase batteries.

This article was originally published on RenewEconomy’s sister site, One Step Off The Grid, which focuses on customer experience with distributed generation. To sign up to One Step’s free weekly newsletter, please click here.  

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  • Sir Pete o Possums Reek

    There is much to like in this business plan.
    It eventually exploits the consumers collective purchasing power,
    and amalgamates distributed production and storage to drive innovations in every area of the energy net. (except maybe the actual poles and wires)
    This approach will help move the urban, commercial, light industrial sectors into a more fully networked approach. Almost Kwh’s as data, except that:
    1/ electrons are electrons
    – your fridge wont care (yet) who’s brand is on the sparks

    2/

  • MaxG

    Well, they have to deal with AU Standards (WRT battery location) first to make this work… so at present the incumbents are still laughing last… 🙁

    • Sir Pete o Possums Reek

      They are laughing now and its costing them, in ways they may well see, but don’t know how to cost or ameliorate. They sacked those people a decade ago. Next thing they will be:
      frying kittens with battery power or something.
      funding / standing candidates in the senate
      calling for a royal commission into “health effects of absorbed photons and light metals re-transmittance in small marsupials” < see wind farms 101

      He who laughs last…

      Time Truth Technology and Social Licence are all moving away from them.

  • Robert Comerford

    Will they be able to keep this up as the utilities continue to increase their fixed charges
    as returns from consumption goes down?
    I can see a a time where even if we are not connected the govt will mandate we all pay a fixed charge to look after their incumbent fossil fuel mates.

    • DJR96

      This is kind of the point though. It highlights to the utilities that hiking fixed fees is not going to work in their favour. It is actually creating the space in the market for this new model. And the more this happens, the worse off the utilities will be and the community at large. If you live somewhere solar is not possible, you will be in a world of financial pain.

      This has got to be the wake-up call for the utilities to re-invent their whole financial model. Everything they’ve done over the last decade has encouraged disruption to themselves. Smart huh?

      • nakedChimp

        Unfortunately the capital used by the utilities wants it’s ROI, no matter what. Exponential functions are hard in that regard – no fuzzing around possible.
        They have to get more and more out of it.
        They are between a rock and a hard place and the only way out is to run that bus off a cliff.

        Just hope that the taxpayer at the end isn’t the one to pay for pulling the bus back up onto the road and paying the ‘busowner’ his outlay to get a brand new bus 😉

        • DJR96

          Yes. It would seem the bus needs new drivers. Better to replace them all before they crash the bus. 😉

        • daw

          If it is not the taxpayer it will be the end user. Pretty much the same person most of the time.

      • daw

        All the above will only work if people disconnect from the grid and then they will only be able to supply themselves thus the sums become less favorable anyway.
        the Sonnen deal will be the monthly charge PLUS the daily sac (they conveniently forgot to mention that)

    • WR

      The risk is to Sonnen because they would be paying those bills.

  • George Michaelson

    Please.. where’s the sub editor? The lead paragraph has paris in the the spring typo…

  • Phil

    I’m certain these will sell in considerable volume, but i see a lot of stumbling blocks / revenue opportunities along the way

    Fewer Utilities are allowing bigger than 5kw solar systems connected/ contributing to the grid. So option 1 is the likely by FAR the biggest seller.

    Will be interesting to see the WHOLE cost of ownership including all fees / charges / limitations / service costs / warranty exclusions etc such as , but not limited to …..Smart GROSS and TOU metering only , additional daily tariff charges , battery charging costs and restrictions , solar panel cleaning and testing as well as battery / inverter testing and service charges. Ambient temperature operation limits and reduction of lifespan/ loss of warranty due that if exceeded.

  • Chris Marshalk

    Considering my annual power bills are under $600 per annum, should I wait any further or just get solar panels? Also, is anyone following LENR?

    • technerdx6000

      Get solar panels – your savings will be immediate. You can always add batteries later. Thats what I did!

    • My_Oath

      There are people still spruiking LENR after all these years? Let me guess – its “two years away from commercialisation” again?

  • George Darroch

    Their biggest challenge will be marketing. Lots of retailers aren’t able to connect with customers, and despite having very good products they remain marginal.

  • solarguy

    There has to be more to this deal. If sounds too good to be true, then it usually is. I would need to see the fine details of the deal going forward.

    • WR

      It isn’t clear in the article but the total cost is the cost of the solar panels + battery + monthly charge.

      You would have to go through the maths to work out the overall benefit but that’s a large upfront cost. That’s why they think this is more likely to appeal to people who already have panels.

      • solarguy

        Since my hybrid system has been operational since April, I haven’t paid a bill ! In fact Energy Australia will owe me a credit come August.

        Yesterday my PV produced 37.4kwh, 20.9kwh was exported to the [email protected] cents/kwh=$2.61. Daily SAC charge $1.06 which gives me a credit of $1.55.

        The remaining PV production, charged the battery and powered all loads, including two air conditioners, plus I run the AC’s at night from the battery too.

        If I can do that then so can others.

        • Richard

          How big is your pv system?
          How many batteries?
          What is total system cost?
          I’m interested we live in central Vic cold winters hot summer

          • solarguy

            9.3KW, 968Ah battery bank. Cost whole sale $25k, but I designed and installed most of it, so $45k + retail for punters.

          • Richard

            Thanks, that is pretty dear.
            How many kWh battery is that?
            I hoping to run an electric car too daily drive about 50k.
            My hope is to provide for almost all energy needs.
            House usage about 20kwh on average but we can get that down.
            Any idea what size system would be best?

          • solarguy

            That’s 28kwh at the C10 rate and yes it is expensive, but keep in mind I designed it too be able to cut the cord if need be, a bet each way if you like. You would do ok with 6 to 7KW PV and 5 or so kwh of battery depending on when you use most of your power, you may need 10kwh storage. I would also consider an Edson E.T. solar hot water heater to maximise the PV generation use.

            Contact Glen Morris of SOLARQUIP for costs and further advise.

    • Brunel

      Need Ronald on SolarQuotes Blog to tear it to shreds and say that it is better to keep money in the bank. Because there is no such thing as a bank tax. Oh wait…

      (I love the bank tax and carbon tax – only problem is Gillard never gave me a carbon compo cheque).

      • Joe

        …but did you get Tony A’s and Joe H’s $500.00 cheque ?

        • Rod

          Anyone on low income (unemployed, pension etc.) got an increase. That was never rolled back.
          All workers also received a tax reduction and AFAIK that was never rolled back. Gutless Abbott. Can you imagine the stink if they did.
          No wonder the country is broke.

          • Joe

            Guys, I was being tongue and cheek with that ‘mythical’ $500.00 cheque. The rolling back of the so called Carbon Tax ( we had an ETS with a fixed price for 3 years ) was a huge mistake in terms of policy direction and we now see the results with our Carbon Emissions rising each year since the repel of the Carbon Tax. Our emissions reduction targets look unlikely to be met. Pricing of emissions will come, just a matter of how long it takes. Each of us paying a little more is the sacrifice we all make to enjoy the collective benefit of a cleaner environment and in taking action to combat climate change.

          • Rod

            Mythical indeed. The mad monk promised we would all be $550 each year better off without the price on carbon. Instead electricity prices have doubled. And no-one in the mainstream media is holding him to account.
            The CT rewarded people like me who are very low energy users. It was working (lowering emissions and closing the dirtiest generators)
            Direct action is costing taxpayers and increasing emissions.

        • Brunel

          So you mean the ALP is no better than the LNP?

          (I voted against Howard 3 times and of course I never voted for Abbott)

    • riley222

      They’ve already rolled this out in Germany, perhaps looking there might give an idea how this will pan out longer term.
      I have a feeling Sonnen won’t be getting too much co-operation here in Oz.

  • Brunel

    Waiting for Solar Quotes to calculate the cost of storage in this system.

  • howardpatr

    What is missing is the capacity for your EV to be charged directly from the PV array and do so in a way that can bypass the home storage and respond to differing loads and generation.

    It is not going to far away especially with China mandating that soon 10 percent of all cars manufactured are to be EVs and that proportion will rapidly increase.

    • Dennis Kavanagh

      I’m hoping that the “Zappi” charger will handle this if ever gets going in the EU and eventually here. It looks very promising.

  • matt bounds

    Not many networks allowing PV installations around Melbourne above 5kWh, so the average household will be limited to around 20.5kWh consumption per day. Still not bad, but what will the excess charges be like above that cap?

    • solarguy

      That may be for single phase connections, but might allow more on 3 phase.

      • matt bounds

        Useful for all those typical 3 phase homes :). Even if the maximum permitted system size were above 5kW, most homes don’t have the roof space for more than that. So the larger two systems seem to be aimed more at commercial customers.

      • Joe

        It is similar here in Sydney with 5kW systems being the limit on single phase.

  • Joe

    Just waiting for The Utility companies to come up with ‘Barriers’ to try and stop Sonnen or lob some ‘new charge’ to make those savings less likely.

  • David Fairburn

    How many under 5kW systems are out there?
    More than half total rooftop PV’s, easily, I’d hazard a guess.
    We are a 3br house and 2 to 3 people and cope really well with a 2kW system.
    Seems to me we are being lost in these new schemes.

  • Phil

    According to the Sonnen AUSTRALIA warranty if this battery is operated outside of SPECIFICATION (an AMBIENT temperature range of plus 5 to plus 40 degrees celcius) the warranty is VOID

    So that rules out most of Sydney , Brisbane , a lot of Qld and western NSW , Most of Victoria , Tasmania and Canberra.

    Warranty Here

    https://sonnen.com.au/sites/default/files/warranty_-_sonnen_1510387_8_version.pdf

    Specs Here

    https://www.sonnen.com.au/sites/default/files/161018_datasheet_sonnenbatterie.pdf

  • Craig Memery

    The limited info provided is sufficient to conclude the economics don’t stack up.

    “An average house will be able to consume around 10,000kWh a year, or nearly 30kWh a day, and cut its annual bill of around $3,400 to just $480 a year.”

    Given the average house uses about half that, the analysis doesn’t apply to them.

    “Of course, you also need the battery storage, which might cost around $15,000 for an average system. But even this would provide a pay-back within 5 years… ”
    Only if you don’t include the monthly payments, or the time cost of money, and the deal covers all your fixed charges and allows for volatility of load etc

    “Sonnen provides a guarantee for its storage systems of 10,000 cycles. That effectively gives it a near 20 year life.”
    Except based on the limited information it would seem to cycle more than once daily. And I doubt there is no time limit on the warranty

    • Craig Memery

      “Flat” is a pretty funny name for a battery product though

    • solarguy

      No it doesn’t seem a good deal at all. See my post above about my system.

  • Richard

    Just another company screwing the poor consumer. Make something so difficult to understand you have to pay someone a fortune to make it simple for you.

    It’s just another form of consumer as milking cow. And once they have bought you into their farm, they will work out ways of getting more milk for less input.

  • Robert Westinghouse

    Love it….I am tired of paying for the profits of the energy companies. If the Sonnen is installed “correctly” that is inside, all should be OK…I have 8.8kW of Sonnen magic and I am giving the finger to Big energy.

    • Phil

      This is where the Tesla Powerwall 2 is a no brainer if you CANT mount indoors or be within the plus 5 – 40 c temp range

      Not only does it have a warranted -20 to +50 c operating range it also has a much larger Inverter Output 5kw continuous , 7kw peak

      And it appears to be cheaper installed and has at least 13kwh of useable storage

      • Robert Westinghouse

        Hi Phil – Point taken….but the Sonnen looks cool, the wife likes it and I have 3-phase so the Telsla was too expensive.

  • Phil

    No mention if battery backup is standard with loss of grid power.

    Here is an interesting Tesla Powerwall 2 install link from a user. It supports power loss.

    https://mikesgear.com/2017/06/10/tesla-powerwall-2-install/