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Home battery sector sets scene for innovation

Anegla Macdonald-Smith – from AFR outlines the benefits of Sonnen

The pilot could see a discount of about $2,700 for homeowners on a battery that can provide 3kW of sustained peak output.

In Germany, one of the world’s leading markets for home batteries, hardly a rooftop solar system is sold these days without an integrated electricity storage system.

Storage has become, in effect, the driver of solar sales, says Oliver Koch, the managing director of German battery provider Sonnen GmbH, which is aiming to make as big a mark in the fast-emerging Australian market for home batteries as it has at home where it is No. 1.

The picture in Germany gives an insight into the transformation likely to take place here during the next few years as home batteries make more of an impact on the way homes nationwide source their electricity.

Koch is predicting a wave of ways households will take up the use of storage systems, and a variety of new business models emerging to make it happen.

Household solar installations (‘000s)

In fact, advances already made in the technology behind today’s batteries means there are “no quantum leaps” to be expected on the technology side for the next few years, Koch says. Rather, the innovation will be seen on the business-model side.

Back home in Bavaria, the concept of a residential community operating its own storage system, allowing households and friends to buy and sell electricity to one another, has become a major driver of sales. Koch sees it being also enthusiastically adopted here.

The so-called sonnenCommunity allows those with solar PV and a Sonnen lithium-ion battery to make available cheap power generated on their rooftops to their friends and neighbours in the community who may not have their own systems.

The generating household makes a small profit on the feed-in tariff and the receiving household gets power cheaper than it would otherwise, provided from a battery system in their friend’s house thanks to a community that combines decentralised power generation, “smart” battery storage technology and digital networking.

Such innovative concepts are expected to be one of the drivers that will increase home battery sales from an expected 2500-3000 units this year, to perhaps 5000-10,000 units next year, according to Sonnen’s Australian CEO Chris Parratt. Morgan Stanley sees battery take-up following solar installation patterns in Australia, on its way to becoming a $24 billion market.

Although some sources still make the argument that the investment case is lacking for installing a battery and solar system here, Koch and Parratt see it otherwise, at least for larger, airconditioned homes in regional areas paying electricity prices during peak afternoon periods of 35¢ a kilowatt-hour or more.

Those prices have already driven the uptake of rooftop solar in some regional areas of NSW to 55 per cent, substantially higher than in the cities.

Indeed, they see the economic case as being one of the key drivers for battery uptake here, alongside the storage and solar-friendly regulatory system. That contrasts with the US, where the desire for back-up power to retain supplies during blackouts provides the motivation.

NSW households have a particular reason to look at storage as the Solar Bonus Scheme comes to an end on December 31, leaving about 150,000 households and small businesses that installed solar systems under the previous generous feed-in tariff system looking for an alternative way to gain from their rooftop panels.

For those households looking to play in the “community” area or something similar, technical features of a storage system will come to the fore, in particular the ability to fully discharge and charge the battery once or twice a day.

Hence the emphasis by Sonnen and some of its competitors on the number of such “cycles” covered in their product guarantees: a system guaranteed for 10,000 cycles would allow a household to participate comfortably in that game, but it’s a different story if the guarantee covers just 3000 cycles where the owner would be thinking twice about risking deteriorating performance after little more than four years.


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