Competitive energy storage solutions arrive in Australia

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Home energy storage solutions at retail electricity prices are coming to Australia, threatening to further disrupt incumbent utility business models.

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Battery solutions that can rival electricity retail prices are arriving in the Australian market, with the potential to further disrupt incumbent utilities’ business models. SolarQuip’s Glen Morris said that batteries with “optimised equipment” can store electricity in homes for between $0.23/kWh to $0.28/kWh.

Morris is currently working with solar distributor Solar360 on rolling out a series of storage products and power electronics for storage solutions. Morris said that the time has arrived where battery storage can compete with retailers, under certain models. Morris’ is currently running a three-day training program for the Australian Solar Council at Swinburne University.

“If you can store energy that cheaply, it suddenly makes it viable to put in a battery system in because it saves you money.”

Solar360 is introducing a number of technologies to make cost competitive storage available to its installers. These include a storage-ready inverter from Chinese supplier SolaX, two sizes of inverter/chargers from Schneider Electric and two lithium-ion batteries from BYD.

“About a year ago I was quoting $1/kWh with storing electricity with a lead-acid battery,” said SolarQuip’s Morris. He described the pricing of the new solutions as being a “game changer”. Morris explained a number of scenarios where these storage solutions can be cost-effective for households.

“If you’re in New South Wales and you’re on a variable tariff, you can have off-peak, shoulder and peak (pricing). Off peak is around $0.16/kWh, peak is around $0.53/kWh – that’s from 2pm to 8pm. If you’ve got electricity at $0.16/kWh, even without any solar, with battery backup you can buy at that price during the day and then use it between 2pm and 8pm, then it’s costing you around $0.40/kWh for that energy, instead of $0.53kWh,” said Morris.

Morris, who is also the vice president of the Australian Solar Council, said that adding solar to battery systems makes the proposition even better. “You’d then be getting electricity for the low $0.30s/kWh, when you’d be paying the peak rate.”

Naturally, this scenario doesn’t apply right around Australia, and time-of-day pricing is currently not being offered to all households. In fact, some utilities are reported to being taking steps to actively discourage distributed storage.

In South Australia, the current generous FIT for PV is cancelled if a battery is added to a solar installation and on the Horizon Power grids outside of the SWIS in WA, technical requirements in some areas may make adding storage problematic. On top of that, utilities may take steps to discourage storage by increasing fixed charges to bills or by applying grid costs even if a residence goes off grid.

“Retailers are now in direct competition with their customers,” said Morris. “The utilities will be pushing hard at all levels, technical, regulatory and political – so it’s going to be a real battle.”

Despite these potential hurdles, some remain bullish as to the cost reduction path that battery manufacturers are on.

Former Sustainable Energy Association CEO Ray Wills said that battery technology, such as lead acid and lithium-ion, are mature technologies and that for lithium-ion, increases in production for industries such as e-mobility and consumer electronics driving major increases in production volumes.

“We’ve seen a 600% increase in production of solar panels over the last five years and the consequence was that solar panels came down in price more than 80% over the course of several years,” said Wills, “and we’ll see that sort of development with batteries as well.”

This will impact on battery payback periods, potentially leading to a boom in installations. “What we know at the moment is that batteries installed in the home have a payback of round and about nine to ten years, so when we see batteries drop behind a five-year repayment, we’re going to see a very rapid uptake.” Wills’ prediction is for batteries for family homes to reach that point some time in 2015.

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15 Comments
  1. Michael McCarthy 5 years ago

    This is great news. Is it possible to install solar panels this year and add storage next year so that I have a hybrid solar system, i.e. take advantage of further price reductions in storage in 2015?

    • Bob_Wallace 5 years ago

      Can’t see why not. Just make sure that whoever designs/installs your solar system uses an inverter that’s designed for battery backup as well as tying to the grid.

    • John Inglis 5 years ago

      Yes.
      The package hybrid systems we build here in Australia ‘ac couple’ with any standard grid tie inverter. We have supplied quite a few on grid hybrids, some with SMA, some with Trannergy and some with Conext. Conext inverters can be controlled with 1% increments which means better charge control than is acheivable with SMA for example, which has 30,60 and 100% steps.
      Other inverter brands can be coupled but in a situation where the supply authority doesn’t allow battery systems to feed into the grid (eg Queensland) control is digital, ie on or off.
      This is one of our on grid hybrid systems :
      http://pvoutput.org/intraday.jsp?id=26474&sid=24167
      If you click on the extended data button under the graph you’ll see the battery data.

    • Miles Harding 5 years ago

      It depends on the sort of system.
      There are two ways to have a domestic battery system:
      a) grid tied – the batteries absorb and return energy to the grid, allowing some portion of the peak demand to be supplied form the batteries. Vector Energy in NZ is supplying this sort of system. Very little modification to the existing building wiring is needed for this system, but it is vulnerable to outages.

      b) UPS or off-grid – The unit only absorbs energy form the grid or solar panels, stores it in a battery and then supplies the energy to the load appliances (client side) through a 240VAC inverter. This type can operate purely off battery with no mains input (UPS mode), or in bypass mode, in which case it is an expensive extension lead.
      A battery is essential with this type of unit, as the client side has to be supplied form the battery.
      The unit has limited power and must be wired between the supply and appliance outlets.

      The battery may be either lead acid or lithium ion. Lead acid is relatively inexpensive, but a lot of reserve capacity is needed to permit a reasonable service life. (typically 4 times the typical daily discharge)
      Lithium Iron Phosphate (LiFePO4) (eg Winston) is also a contender with similar system costs to lead-acid.

      A good Lead Acid battery is the Trojan T105 wet-cell*, which is now available in Australia at reasonable prices and delivery. (* periodic watering is required)

      I have one of these up because WA is difficult to install a grid tied battery in. It would appear that the level of fear and loathing is considerably increased if the battery can shave peaks after sunset.

      • Bob_Wallace 5 years ago

        Trojan now makes deep cycle lead acid batteries with thicker plates for renewable energy use. They are marketing T-105 REs and L-16 REs.

        If cycled no more than 20% the REs should give 4,000 cycles, enough for a 11 year lifespan. I recently bought a set of 12 and they should make my monthly storage cost a bit less than $20.

        I’d suggest that people check their water level monthly for the first year. I’ve learned that I only need to add water every three months, but others might find it necessary to top up more often.

        • Miles Harding 5 years ago

          Cheers Bob,
          Good point,
          The RE option is significantly better for daily cycling applications like solar power systems.
          A quick price check reveals $160 in the USA and $225AUD here in Australia, so not too bad for a USA made product.

          A large battery will also be more efficient in charge-discharge, but the self-discharge and equalisation losses remain and are much greater than LiFePO4, so a couple of extra PV panels are needed to make up the difference.

      • Miles Harding 5 years ago

        An after-thought…

        It’s not entirely crazy to have both
        a) a grid tie inverter (no storage) and (later)

        b) a battery charger – off-grid inverter combo (which also usually includes PV input)

        There is a small efficiency hit in the double conversion needed to charge the battery, but this is offset because the otherwise unused energy when the battery is full can be exported to the grid.

        This also avoids the dumb state impediments by not returning stored energy to the grid.

  2. madankerr 5 years ago

    If you use the battery storage system to go off-grid, you can also factor in the connection fee which is about $300 a year for me. Over 10 years that’s $3,000 which is a handy chunk to invest in battery ‘infrastructure’.

    My 60c FIT expires in 2016. I figure that will be a good year to add more PV and some storage, and then give the grid the flick.

  3. Dissenter 5 years ago

    Glen Morris is a sales man. Be always carefull with long term investments based on avoiding artificial (thus temporal) tariffs in stead of cost based prices. At the end solar plants (and grid scale storage) will replace fossil plants, but as long as there exists a sufficient grid it makes perfectly sense that it is used by as much users as possible.

  4. JRT256 5 years ago

    Ouch! I am sitting here in Arizona, USA where my power is 12.2 cents per kWh plus $15 per month and looking at your prices for power. No wonder solar PV is so popular in Australia.

  5. Diogenes60025 5 years ago

    Batteries will never be cost-effective for grid-scale energy storage. Perhaps they may have a role to play in frequency regulation and stabilization. For diurnal storage–never. Pumped-storage hydro and compressed-air storage are the only cost effective methods. But the subsidy hounds are chasing batteries because that’s where the subsidies are.

    Renewables are already too costly–why make them more so just to try to provide a crutch for their deficiencies? Ratepayers would squawk. Industries would go broke. People would freeze in the dark. Use coal. Its reliable, affordable, clean…and we understand it.

    And home-gamers WILL NOT be allowed to stay connected to the grid for those occasional “gotta haveit” moments. That’s called free-riding and bankrupts utilities.

    • Bob_Wallace 5 years ago

      “Batteries will never be cost-effective for grid-scale energy storage.”
      Cars will never replace cars.

      Man will never fly.

      Man will never walk on the Moon.

      Computers will never replace typewriters.

      Digital will never replace film.

      Want to make a failed prediction? Just include the word “never”.

      As for “renewables are already too costly”, oops. Another fail.

      • Diogenes60025 5 years ago

        Wait till wind & solar mandates & subsidies are withdrawn for the “Great Fail”. it’ll make the housing crisis look like a football game.

        I like storage, just don’t want to pay for batteries. Don’t like’em–too unreliable.

        • Bob_Wallace 5 years ago

          Yep, those batteries are failure prone. My last set worked for seven years without incident before they began to fade.

          (Obviously you haven’t kept up with the prices of wind and solar. Keep reading this site and you’ll get educated.)

    • Newman Mundy 4 years ago

      haha what a classic answer beeing spoon fed the gov views. did u know that all these old power plants that use coal etc were originally subsidized by governments that now run so bad they have to buy green credits from people putting in their solar system, just to meet regulations for pollution. If you actually understood the electricity market and how things work your out look would be different. In SA since the privatization of ETSA the utility has been ran as a buisness model not as a utility, they sacks most of their maintenance staff and severely slowed down the maintenance of power lines etc. This is where 40-50% of the increase in power cost is coming from, its only around 2-3% increase from solar. Also if the utilities changed the way they did things they wouldn’t perish and go bankrupt they would thrive still. NZ power company owned by their gov are putting in lithium storage technologies into houses that is controlled by the utility this means they can buffer peak loads during high demand times using the storage from peoples homes. If more utilities subsidized things like this we wouldnt need big expensive transformers, we could get away from hi voltage lines and run a grid on full 240-415 volt this would dramatically reduce the maintenance as , high voltage lines and transformers cost a lot to maintain do some more research into how other companies that are doing these things are adjusting and dont be fooled by the gov that are treating u like a mushroom

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