When the world’s biggest supplier of solar inverters (sometimes described as the “brains” of solar PV systems) sets up camp in Australia, it’s probably a development worth noting. California-based “solar-tech” company Enphase opened offices in Sydney and Melbourne around 18 months ago, and since then, has been working on some fairly big plans.

These plans involve its Enphase AC Battery: an astonishingly compact (see picture right) modular plug-and-play energy storage system which, when used with the company’s cloud-based Enphase Energy Management System, allows consumers to store and manage their rooftop solar energy supply and control their overall household energy use – all with an eye to cutting the cost of electricity bills.

As Enphase CEO Paul Nahi puts it: “if the idea is to give more control to the consumer over their energy, with the goal, initially, of reducing their energy bill, then you have to have storage. You need to be able to use your energy when the solar isn’t there, and that needs storage.”

Enphase’s new and potentially ground-breaking energy storage product was launched at this year’s Solar Power International conference in Las Vegas in October – a product launch that PV Magazine since nominated as the event’s most notable.

As the company revealed back then, pilot testing of the new product is slated to begin in 2015 in the US, Europe and Australia. And according to Nahi, the Australian pilot program will be one of the biggest.

Enphase battery

Enphases Olivia Smith holds a prototype of the AC Battery unit, which will weigh 18kg.

So why Australia?

The first thing Nahi is keen to stress when asked what appeals about Australia as a growth market and testing ground for solar plus storage, is that favourable solar policy is not a prerequisite.

“We don’t look at immediate solar policy,” he told RenewEconomy in an interview in Melbourne on Thursday. “Solar policy, by definition, swings left and right.”

“Our goal is to provide the technology to enable mass adoption of solar. We look for political stability, we look at the right insolation, we look at GDP growth, we look at a bunch of things that make up a viable long-term solar market, and Australia certainly does fit that bill.

“The Australian solar market is actually fairly advanced,” Nahi adds. “The US is still years behind Australia, which in a way, represents an opportunity for us, because we can create products and services that an evolving, a burgeoning solar market really needs and can leverage. Storage is a perfect example of that. (It’s) really one element of the energy management system.”

 

Enphase CEO Paul Nahi.

And according to Nahi, that is where the global energy future lies – in efficient, high-tech energy management.

“Enphase is… a high technology company in the solar space,” said Nahi – an attribute, he adds, that separates it from the solar pack, the vast majority of which have evolved from a deep industrial background.

“Our view, say, two to three years out; we actually don’t believe that people will sell a solar system, or buy a solar system, we believe that you are going to buy an energy system. That will necessarily include solar, but it will also include storage, it will also include load management, and it will be wrapped up in a software package and a financial package.”

Sounds like a no-brainer for the consumer. But for utilities – especially those wedded to centralised, f0ssil-fuelled grid infrastructure – it’s a bit more complicated.

“Solar is so disruptive, really, to a very venerable, long-term industry, that it is going to cause some challenges,” said Nahi in Melbourne.

“In the US, we see some utilities embracing it and owning it and others pushing it back as hard as they can, and everything in between. Some utilities see solar as this existential threat, others view it as a tremendous opportunity.”

But having worked closely with utilities in the US, such as Hawaii’s Heco in the US, Nahi is keen to stress that there is still a key place for the utility in the future energy picture.

“We are absolutely not a big fan of ‘let’s take everybody off-grid’. I would actually say, that’s completely insane,” he said.

“We don’t want to take everybody off grid. What we do want to do is to provide the consumer the ability to manage and create their own energy; to do it in an affordable way, to do it very simply.

“(We want to) work with the utilities, to help them embrace solar, and recognise that in some cases, business models will need to change.”

“The trouble with utilities,” adds Nahi, is “they kind of move glacially. And I know why they move glacially, and some of it I get. …The fact that we have consistent and affordable energy is powerful. We don’t want to mess with that.

“At the same time, we know that if we stay the course, we’re in very big trouble. Both individually, because the cost of energy is going to continue to go up – and by the way it will go up even if you don’t include the price of carbon. I can almost guarantee that carbon will be priced, in different countries and at different rates, but it is absolutely coming.

But, he adds, getting back to business, “as much as we need to do this for the planet, the reality is, unless I can give you an economic benefit, I’ve got a very limited market. If I give you an economic benefit, I have an infinite market..”

Still, Nahi’s long-term vision involves working with utilities.

“(In the US) we know more about the grid than they do, which i know sounds a bit odd, but our systems are very very sophisticated – bi-directional communication, so we know what’s happening with the inverter, …but we also know what’s happening with the grid, with the AC side of things as well.

“There are very few companies in the world that know how to manage close to a terabyte of data every single day, let alone solar companies. That business model is a very well proven business model.

“The goal is to stabilise the grid, while we increase the penetration of solar. That takes policy, that takes technology, there’s many parts of that. We view it as our responsibility to be a participant in every portion of it.”

But while policy does come into the equation, Nahi says the politics behind it usually has nothing to do with energy.

“It’s very hard to out-lobby traditional fossil fuels. In the US, they’re very entrechned in the system. So really what we have to do is we have to outcompete them.

“I have no interest in beating them in Washington, I want to beat them at the consumer. I want to provide a better solution, and I can do that through technology and innovation. And that’s exactly what’s happening.

“Solar is growing as fast as it is because it is a cheaper, cleaner alternative. And the dynamics behind that are doing nothing but getting better. Solar’s costs are coming down, the utility prices are going up.”

“The frustrating thing about this is that the technology to (use solar and storage to benefit utilities and consumers) exists,” Nahi said. “This is not a technology problem any more. It was a while ago. It is no longer a technology problem. This is now purely policy.”

Enphase’s latest model micro-inverter is a key part of this new round of distributed energy technology, in that it uses bi-directional power flow – that is,  AC to DC and DC to AC – thus giving rooftop solar owners the ability to introduce a storage product.

Included in the AC Battery unit alongside the lithium-ion batteries themselves, the micro-inverter means customers can hang it on a wall, plug it in, and have solar plus storage. And you can connect it with other devices, too, such as an electric vehicle.

And while there’s no mention of the cost of the units – including access to the Enphase Energy Management System – as yet, Nahi says the price will be very competitive.

As Nahi has said, the many benefits of solar and energy storage are obvious. What’s not obvious, however, is who owns the storage.

“It’s possible that the utility buys the storage and puts it behind the meter; or the consumer, with a contract with the utility. I don’t know that there’s a single best solution, says Nahi. “This is a time of exploration and experimentation.

“The battery market today reminds me of exactly where solar was in 2007,” he says. “In 2007, everybody was excited about solar, but we weren’t sure why. It was so expensive!

“But there was this sense that it was going to be huge. So it’s kind of like, forget it, let’s just make it happen. And now look.

“Batteries feel exactly the same way. Everybody’s excited about it, everybody recognises it’s going to happen. And nobody has any idea how it’s going to work. And we’re ok with that. We understand that we have to get to scale, and that’s going to occur over a couple of years. But we have to apply technology to that.

“We’re going to learn a lot,” he adds. “The energy industry is going to change more in the next 10 years than it has in the past 100. There’s a huge, really seismic shift that’s occurring.”