The annual Consumer Electronics Show (International CES) has become one of the biggest trade shows in North America, attracting around 170,000 attendees and 3,600 exhibitors. It took place last month in Las Vegas at the same World Trade Center venue where the booming 2014 Solar Power International show was held.
Innovation at the speed of awesome, was the catchphrase at this years CES, with one of the key themes being the Internet of Things (IoT) and the Smarthome. This refers to a dazzling array of connected devices in the home, for communication and automation of a range of household utilities, including security and entertainment but, crucially, also energy.
New York Times technology journalist Molly Wood summed up the dominance of IoT and Smarthome at the event with the pithy phrase: Just put a sensor on it. In terms of energy, Smarthome applies in a number of ways. These can be loosely divided into the categories smart lighting and energy efficiency; heating, cooling and smart thermostats; and distributed energy production and demand management. It is in this third category where solar and storage sit, and it is an area that has attracted the focus of solar companies and battery providers.
There is some debate among the PV industry as to how widespread solar+storage will become. U.S. PV supplier and project developer SunPower is particularly bullish. At its Analyst Day in November last year, SunPower CEO Tom Werner said that the firm was investing heavily in software, to give the customer the control over that [their PV produced] electricity so they can use it whenever they want and match it with the load. SunPower has been developing a solar+storage pilot project in Australia, a market Werner says is a good fit due to its ample sunshine and high electricity transmission costs.
You know us as the best solar technology, you will know us in the future as the best solar company with the best energy management capability and storage, Werner told the assembled analysts (for more see pv magazine 01/15).
Also last November UBS released a study in which it too concluded that solar+storage is already financially competitive for Australian households. The analysis looked at a 5 kW rooftop array coupled with 5 kW storage that would cost AUD$18,000 (US$14,350) and would offer a household a return of 10% a year in comparison to buying grid electricity.
The cheapest system looked at is already capable of earning its cost of capital, UBS utilities analyst David Leitch concluded.
However, the view shared by UBS and SunPower is not a universal one. The concept of grid defection (which is when households install sufficient storage to allow them to go off-grid) has come in for criticism.
On Greentech Medias Energy Gang Podcast, host Stephen Lacey suggested that reports pointing to the economics of grid defection stacking up in some U.S. states were overblown and did not reflect the technical barriers to large scale griddefection. Co-founder of Generate Capital Jigar Shah said that while he agreed that the case for grid defection through battery deployment was overstated, he was happy to use it as a bargaining tool in discussions with recalcitrant utilities.
That people who are less educated than we are on these topics are willing to consider grid defection seriously, I happily use politically to my advantage, said Shah.
Bloomberg New Energy Finance (BNEF) analysis also paints a somewhat bearish picture for energy storage technology roll out in the short term. This is despite the BNEFs firm view that residential energy storage will play a crucial role in the transition of our energy system. Those were the words of BNEF analyst Logan Goldie-Scot.
There are numerous challenges, said Goldie-Scot. At more than 12 years, paybacks for storage for self-consumption remain too long for the average consumer, and there is consumer anxiety about the technology cycle life. Policy makers often offer contradictory signals, such as Germany which has a subsidy program for end user energy storage and also a tax on self consumption for PV systems larger than 10 kW.
Power electronic innovation
Grid defection is an extreme example of solar+storage deployment and there certainly exists significant opportunities,in a range of geographic markets. Along with Australia, Hawaii, California and Germany are all seen as potential first-mover storage markets.
This is the geographic rollout strategy of microinverter supplier Enphases AC Battery, communicated when the product was unveiled at last years SPI trade show. The Petaluma, California-based company integrates one of its microinverters into each battery unit. Goldie-Scot says that power electronics and control software is an area within storage around which a great deal of innovation is taking place.
Power electronics and energy management is increasingly competitive, said Goldie-Scot. On the hardware side, lots of development is underway on improved power conversion hardware, such as bidirectional and smart inverters.
BNEF notes that when it comes to the production of battery cells, large manufacturers have an advantage, given the high capital costs and economies of scale. Companies such as LG Gem, Samsung SDI, Panasonic, and BYD are all going for scale. The growth in e-mobility is also playing a role, particularly for the latter two manufacturers that are very active in the space.
Delivering customer-focused power management solutions, however, is presenting opportunities for small companies. This is particularly evident in the solar+storage market.
There are plenty of examples of successful smaller companies that are bringing products to the end consumer, such as Sonnenbatterie and E3-DC, said Goldie-Scot.
Sonnenbatterie is an unlikely player in the solar+storage space. It has broughtdown the costs of its solar-tailored storage solution rapidly from one generation to another.
We launched our fourth generation of storage systems, the Sonnenbatterie eco, in 2014, and we can offer a price point to the end customer that is 50 percent below the price point of 2013, said Sonnenbatterie CEO Christoph Ostermann. We feel that we made the move out of this premium niche into the mass market, which we can also see in our incoming orders and in our production figures. Sonnenbatterie operates out of the picturesque southern German hamlet of Wildpoldsried, itself an energy-independent town drawing on large solar, wind, and geothermal installations in the surrounding area. An innovative sustainable community heating system supplies the Alpine region with warmth over the cold winter months. Sonnenbatterie reports that smart storage solutions, with advanced control software and interfaces, are required to serve both consumer demand and to support the grid in areas of high renewable penetration.
We have the situation today where the share of renewable energy, especially solar and wind, is quite high, so we have situations where the grid needs to be supported. Therefore, to make sure that the storage system is working in a grid friendly way, you need intelligence behind it, said Ostermann. If storage isnt smart, its just a battery. Sonnenbatterie has sold over 4,000 systems over the past four years and has ramped battery assembly operations in Germany to such an extent that it says it can benefit from economies of scale. The price reductions it has achieved have been the result of a number of factors, including a 70% reduction in unit assembly time, and a streamlining of the product to do away with features, such as backup power for German consumers.
Sonnenbatterie is expanding into the U.S. market this year, where backup power is a more frequently-desired feature, and Australia in the near future. The company plans to tailor its products to meet the geographic and market requirements. Sonnenbatterie closed a 7.5 million (US$8.5 million) financing round in December 2014 to support these plans.
Sonnenbatteries Ostermann thinks that the solar+storage-empowered prosumer is unlikely to go off-grid, particularly in Germany, any time soon. He does, however, believe that a push towards greater automation within the home through enabling IoT and Smarthome technologies is inevitable.
A lot of people are still afraid about Smarthome devices because they do not trust the technology because they think, what if a hacker comes and can access my house? But I think this is just a process and people will get used to it step by step. It makes life easier and this is the key for intelligent storage systems because it is impossible to control them manually. Last month at the International CES in Las Vegas, Alarm.com was awarded the Mark of Excellence Award for its geo-services technology, with which smart thermostats adjust themselves automatically depending on the location of a homes residents. The service tracks householders according to their smartphone location, warming the home as a resident approaches and backing off the heating as they leave. German startup Tado has been employing similar technology with both home heating and air conditioning in Europe.
Similar applications are imaginable with solar+storage also, particularly in warm climes where air-conditioning is a major electricity consumer and can result in sharp grid peaks with which utilities must grapple.
BNEF Founder Michael Liebreich noted in his annual cleantech trends mailing last month the excitement surrounding connected homes and power storage may be a tad overhyped, but that it is set to catch the consumer imagination in 2015. Liebreich wrote that Nest, now owned by Google, Apple, Honeywell and British Gas are all actively rolling out Smarthome products, along with another security firm ADT like Alarm.com leveraging its presence in millions of homes as a security-services provider.
All this should open up the chance for households to take advantage of time-of-use electricity pricing, wrote Liebreich. Regulators in many countries are looking to require utilities to offer this, and indeed Italy and Ontario already do so. Large-scale uptake of demand-side management technologies is likely to be faster in the U.S., where air conditioning is a key part of the load, than in Europe. The prize for the power system as a whole will be much greater flexibility to cope with peaks and troughs in demand and in variable generation from wind and solar.
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