Home Energy Storage: From early-adopter to mainstream

Batteries for storing energy in the home are still at an early adopter stage. The market leader, Sonnen GmbH, which has around 21 per cent market share, has 30,000 or so installed, of which two-thirds are in its domestic German market – “a drop in the ocean,” admits Martin Allman, Sonnen’s UK director. Nevertheless, it is easy to predict that this is a sector that has interesting times ahead.

New Entrants

Certainly, the noise around it has increased steeply in the last couple of years with the entry of Tesla, a company that never does things quietly, with its Powerwall range. Perhaps more importantly, the devices are becoming cheaper, smaller and easier to install (US-based Orison is offering what it claims is the first self-installable home battery).

Heavyweights such as Samsung are moving in and it is reasonable to assume that more and more suppliers from Asia will emerge (Germany has the strongest claim to be the pioneer country).

There will no doubt be casualties among the would-be suppliers and, indeed, even another powerhouse, Daimler, has had a false start. It retreated from the US home battery market a few months ago after setting up Mercedes-Benz Energy Americas in late 2016. In this case, it seems the concept of taking batteries designed for cars and trying to apply them to home use was flawed, as they proved unable to compete on price.

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Tesla’s Powerwall home battery

Consumer Motives

For all the promise, at present you probably wouldn’t invest in a home battery for economic reasons. Allman admits that currently the motives are mostly emotional, including a desire for energy security and loosening the hold of the large energy providers. The vast bulk of home batteries are currently connected to solar PV, although there is no technical reason why they shouldn’t connect to other sources.

One attraction for buyers is control, with a wealth of information, including graphs and pie charts, provided via portals and apps about their consumption and generation. And savings can certainly be made, through storing the solar PV energy – ever more attractive as subsidies decline, most obviously in the UK with the abrupt end of the Feed-in-Tariff. There is also the ability to charge the battery from the grid at cheap rate times.

With any lithium-ion based device, there is the thorny question of the environmental impact – not just from mining but also from the current low recycle rates (around five per cent). It is clearly a trade-off but battery technology has the potential to substantially reduced carbon emissions and pollution, while the hope is that recycling capacity and technologies will evolve, particularly as the demand for recycling increases sharply – predicted to be around 2025 – as today’s batteries come to their end of life.  

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An impression of TenneT’s planned Dogger Bank wind farm and artificial island

Strength in Numbers

Interestingly, Sonnen is leading the way in starting to link its battery owners, through a monthly fee, so that they share energy and, through aggregating their batteries, exchange energy to and from the grid. The concept, which is being piloted, would provide capacity to the grid when needed and take it when there is excess, such as from wind farms on windy days.

Sonnen’s pilot is with TenneT, an electricity transmission systems operator with activities in the Netherlands and Germany. TenneT has a number of offshore wind farms and is part of the consortium that is planning the world’s largest, complete with its own artificial island, with thousands of turbines intended to generate up to 30 gigawatts of electricity at Dogger Bank off the UK coast. For the Sonnen pilot, using IBM’s distributed ledger blockchain technology, the batteries’ intelligent charging management software will automatically adjust to reflect changes in the TenneT grid status. The vision is for the networked storage batteries to absorb and release excess power in seconds, as needed, reducing energy transportation bottlenecks in the power grid.

Here it is possible to see how the economics for home batteries might stack up faster than for individual users. The community power comes with a low-priced electricity tariff. Conversely, for every kilowatt hour shared, the customer receives financial compensation.

As energy costs rise and storage costs fall, so there will come a tipping point at which the economic model flips. That is some way off and will vary from country-to-county and battery-to-battery; at present, this remains a market for the energy zealots, in perhaps three or four years time, the sums will start to add up as well.
Main picture: Sonnen GmbH’s home battery
By |2018-07-24T10:03:01+00:00Jul 24th, 2018|Economy|0 Comments

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