Melding with the market

Whether a solar cell, module, inverter or BOS supplier, tailoring a product to meet certain market demands is one of the most vital steps of the development process. Storage specialists operating in – or entering – the solar space are beginning to think along similar lines as markets around the globe open up to the sustained and economically viable possibility of battery-backed solar installations.
At the utility-scale, there are moves afoot to develop and introduce storage solutions that meet the demands of utility providers and governments. However, it is at the small-scale, distributed behind-the-meter segment where change will likely prove evolutionary.
The potential for distributed storage is immense. Actual growth, on the other hand, has proven fox-like in its elusiveness in many residential markets worldwide. There are a couple of reasons for this: the issue of suitably reliable and affordable technology, and a lack of mature solar markets that have reached the point where storage is a compelling option for solar customers.
A convergence of these two strands is, however, occurring right now in Australia. A handful of established battery storage suppliers have launched, or will soon launch, their home storage solutions into the Australian market, including Panasonic, Sunverge, Enphase Energy and Trina Solar.
Blessed with excellent solar insolation levels and high PV penetration – there are more than one million households witha rooftop or domestic solar installation – Australia is fast becoming not just a testbed for storage solutions, but an attractive entry market in its own right.
But there are more factors at play than merely loads of sunshine and loads of PV. “What Australia has to now contend with is called the duck curve phenomenon, where huge amounts of solar energy is generated during the peak of the day, and then this has to be balanced against the grid demand, which goes up very quickly in the afternoon,” said Greg Wolfson, director of storage product line at Enphase Energy.
Wolfson told pv magazine that the surge in market activity in solar across Australia was driven by a generous feed-in tariff (FIT), which stimulated large penetration and helped the market reach one million households. “This FIT is coming to an end and, in many cases, will be reduced by around a quarter or greater by the end of 2016,” he said. “So therefore you have a lot of PV installations and homeowners who are faced with the fact that they’ve got this great PV system deployed, generating more energy than they can consume during the daytime, and they’re no longer going to get the value for it.” Add to the fact that electricity rates are high in general across the country, and the economic case for storage becomes quite viable. Australia is a vast place, where policy and penetration rates differ. “In some regions they have gotten to the point where solar penetration is so high that for grid stability purposes the government actually wants to limit the export [to the grid],” added Wolfson. “So that’s one driver in certain areas like Queensland, for example. But in New South Wales (NSW) there is this fundamental economic driver, with the reduction of the FIT. So it’s really across the country that we see strong use cases for storage.”

Tech talking

Having assessed these market conditions, Enphase will launch its AC battery into the Australian market later this year. A lithium-ion phosphate battery developed in partnership with Eliiy Power – a Japanese producer – the system provides 1.2 kWh of energy storage and 275 W/550 W power output, making it a modular addition to the home.
Before deciding upon which type of battery technology to use, and how large to make the system, Enphase had to know precisely which markets it was targeting and why they might prove viable over the long-term. “There are a lot of different lithium-ion formulations, and they all have different characteristics,” said Wolfson. “There is not really one type that is better than another in an absolute sense.” Knowing the environment, the use pattern, the size of the solar system and the prices people typically pay for energy all play a part in market entry and product design. A modular system requires an equally modular R&D and marketing strategy. “We are going squarely after a residential market, where the battery is going to be subjected to harsh thermal environments, which typically are the worst environments for batteries – places where there is a lot of thermal stress.” Wolfson is talking about the garages that are tacked on as standard in most Australian and American suburban houses – the types of properties that are most likely to have a solar PV array fitted.
Enphase Energy had these garages in mind when designing the AC battery, making it durable enough to withstand the varying thermal influences (using lithium-ion phosphates and a prismatic cell arrangement), lightweight enough to be easy to install and inconspicuously maintained, but aesthetically pleasing enough to be a nice addition to the home. And then there is the modularity aspect.
“Lithium-ion has this high value of energy that it can deliver over a ten-year lifespan, which is very important for the use cases that we want to support, which is not just self consumption – we are going to be delivering time of use optimization, and we will be providing grid services support on top of that with demand response,” Wolfson said. The Enphase director of storage explained that it is

these metrics that drove the company’s selection of technology. “If you are looking for a technology for vehicular purposes, where the power density or the weight is much more important, then you would choose a different chemistry type,” he said. “Or for commercial operations where you are in a more controlled environment, where the temperature swing is negated and the battery is housed in an air-conditioned closet – and you can do preventive maintenance – then you choose a different technology.”

Strategies to success

Tesla’s approach to the storage industry has been to dazzle the world with grandiose announcements and a sleek piece of kit that has served to gloss over questions about performance, price and viability. Enphase’s market-driven strategy appears more considered, but there is more than one way to batter at the doors of the battery world – a world that is geographically diverse.
In the U.S., various states are at various stages of storage adoption. The most attractive places such as Hawaii and California – the former an island state with high solar penetration and energy rates, the latter a solar leader that will soon exhaust its 5% net metering allocation, prompting a string of anticipated new tariffs and programs designed to nurture storage – are the obvious locations for market entry, but many other states and regions see their net energy metering (NEM) changing.
“These are the areas where storage will make the most economic sense first,” said Wolfson. “That is what we are trying to do – to look at those markets to fine-tune where we think the AC battery will fit, but with the understanding that our modular AC-coupled approach is ideal for retrofit because we do not interfere with the existing PV generation system.” Pinning down just how much storage is required for any given customer is key to delivering good value. Enphase’s modular battery allows consumers to start small and grow as their needs change or their energy usage is better understood.
In the U.K., an enigmatic residential solar market that has grown rapidly in a short space of time to reach more than 750,000 households, those needs differ once again. The U.K. FIT will reduce to 1.63 pence/kWh on January 1, 2016, making the case for affordable storage more inviting than ever. Enphase and a handful of other global players are looking at the U.K. intently, but a British startup is hoping to steal a march on all of them.
London-based Powervault took to crowdfunding platform Crowdcube to launch its lead-acid home storage battery, securing more than $1.1 million in just three-and-a-half days in April this year. Hoping to retail to British solar customers for $3,140 for the 2 kWh system and $4,400 for the 4 kWh system, the Powervault is presented as a “complete home energy storage system in a box, including batteries, charger, inverter and control unit,” said Powervault MD Joe Warren.
“The Powervault is compatible with all solar PV systems, requires no extra equipment and can be installed by an electrician in under an hour,” Warren told pv magazine . “Many competing solutions only contain some of the components required, take longer to set up and are not compatible with all PV systems. We are a British company and our product is tailored for British homes, designed to be the most practical and affordable solution on the market.” Easily retrofitted, Warren hopes to target the hundreds of thousands of U.K. homes with solar panels fitted, marketing the Powervault through solar installation and home improvement companies.
“We are in discussion with other resellers and some significant distribution partners,” he confirmed, adding that “exploratory discussions” are being undertaken to conduct a product launch beyond the U.K., while further testing a lithium-ion version of the Powervault for different environments around the globe.
Battery suppliers, perhaps more than any other component producer in the PV supply chain, need to have a firm grasp of their intended market before developing and introducing their technology to new regions. In Germany’s mature solar market, competition among homegrown storage providers is fierce, with Sonnenbatterie, ASD Sonnenspeicher and Solarwatt just a few of the specialist providers launching residential systems.
Solarwatt has been tentatively dubbed the “Tesla of Saxony” for the parallelsevident between its own MyReserve 500 battery and Tesla’s Powerwall. The MyReserve 500 will retail for around $5,100 for a 4.6 kWh capacity. The company has claimed that the battery possesses 4,100 cycle capacity, which at one full cycle per day equates to around 15-20 years in Germany, minus winter when solar power takes a sabbatical. This all adds up to a cost of $0.284/kWh for stored electricity – putting Solarwatt firmly in the “attractive” camp occupied by Tesla and Sonnenbatterie.

Expansions and partnerships

Those familiar with the stratified nature of the inverter market will know the struggles certain suppliers have faced when expanding into new territories, where cultural, cost and technical barriers abound. For storage providers the story is similar, but the market is beginning to show signs of more permeability.
Japanese inverter specialist Tabuchi recently entered the storage space in Japan and is now looking to expand into the North American market, having learned a series of lessons on its home turf. Its EneTelus Intelligent Battery System (EIBS) is an inverter-battery hybrid comprised of a 10 kWh Panasonic lithium-ion battery with intelligent control, such as the ability to restrict the amount of power being fed into the grid – imperative in some regions of Japan – and smart controls that know which power is solar and which is battery output.
Available now in parts of the U.S. and Canada, the EIBS is the fruit of a partnership between Tabuchi and Panasonic, and joins a North American market awash with similar collaborations, including Enphase and Eliiy, Tesla and SolarCity, Sungevity and Sonnenbattery, Sunrun and Outback Power, SunEdison and Solar Grid, and SunPower and Sunverge.
Swiss power electronics company ABB – active in the solar industry’s inverter space – will crowd this field further with a product for the U.S. market currently in the development. ABB’s REACT battery unit is currently being beta-tested ahead of launch in Europe in Q1 2016. The company’s storage product designed specifically for the U.S. market will be available Q4 2016.
ABB has also partnered with Panasonic to produce the battery cells and is eyeing the abundant opportunities that exist in the storage markets of Germany and Italy, where the company estimates a demand for around 20,000 to 30,000 storage units annually, ranging from 2 kWh to 6 kWh systems.
Other battery systems set to shape the storage markets of Europe, the U.S., China, Australia and Japan include the B-Box battery from BYD – a modular battery cabinet that can be extended up to 10 kWh; the Flex E3 battery from Delta – another modular-based battery available as lead-acid or lithium-ion; Panasonic’s own lithium-ion 8 kWh battery – already introduced in Australia and coming to Europe and the U.S. later this year; the Oxis Li-S storage system from British company Oxis – set to be introduced to the U.K. early next year; and a new plug-and-play 2 kWh battery from U.S. startup Orison, which the company claims is ideal for apartment living in places like Manhattan, where space is at a premium. China’s Growatt – another inverter specialist – has also followed ABB into the storage market with the launch of two lithium-ion batteries designed to meet the residential needs of Australia, Europe and the U.S.
The transition of the energy market from supply- to demand-driven is underway. Home energy management systems are increasingly sophisticated and affordable, and crucially they are becoming more bespoke – meeting perfectly the needs of each individual user, be they a family of four in Sydney, a couple living in Manhattan or a small business operating in Bavaria.
But solar+storage, despite a healthy projected trajectory, is only at the bottom rung of evolution right now. This potential must be carefully nurtured over the next few critical years, concludes Enphase’s Wolfson.
“There has been a lot of excitement about storage recently, and that is a good thing. I want to make sure, however, from an industry point of view that we don’t over-position what storage can do. That is one of the reasons why we feel comfortable with the modular nature of Enphase, so we can right-size the solution, and don’t oversize storage. Because too much storage leads to a diminishing return, and we don’t want to disappoint the market. And I think that’s one thing we – and the industry as a whole – are going to have to really pay close attention to.”