The Battery-Storage Wars are breaking out, with Autsralia in the thick of it. Raghu Belur’s Enphase will use Australia as it’s global launch pad for it’s home battery system.
The battery-storage wars are breaking out, with Australia in the thick of it. Tesla, while the highest profile, will not be short of combatants.The mass popularity of rooftop solar – more than a third of Queensland houses have solar PV – and the way people pay for the power make Australia a much more attractive market than the United States.
Raghu Belur, co-founder of Silicon Valley start-up Enphase Energy, which will launch its home battery in Australia in early 2016, points to the wide gap between the typical “feed-in” tariff that a household in Australia will receive for its excess solar power and the price of power from the grid.
Prices for mains-supplied power more than four times as much as the feed-in tariff in some cases make battery storage worth a look.Not so in the US, where electricity is charged by “net metering”, so a household will pay for the power consumed from the grid over a set period of time, less any electricity they generate themselves.
The US battery market, for now at least, will be driven mostly by demand for back-up power, not economics, Belur says.No surprise, then, about Tesla’s early focus on Australia for its Powerwall system, with its sleek, coloured wall-mounted 7-kilowatt-hour or 10kWh batteries to be available in 2016.
Bernstein Research, a bull on the lithium-ion battery space, says that at $US350 ($455.46) a kilowatt hour installed capacity for the 10kWh model, Powerwall is well below the $US550/kWh it had been modelling for storage costs. In optimal conditions, Powerwall could supply power at US27¢ a kilowatt hour, ranking Tesla on the scale – though admittedly at the high end – of residential retail power prices in large markets around the world.
Bernstein describes Tesla’s system as already “modestly attractive” in Australia – the 20¢ a kilowatt hour spread between wholesale and retail power prices gives a five-year payback.
But the Grattan Institute puts the realistic cost of a Tesla battery, including inverter, charger and installation, at more than $7000 in 2017, too expensive for most. It says the price would have to fall to about $1600 before it made economic sense in Brisbane, Adelaide and Perth, and by more in other cities.
Yet lithium-ion battery costs have fallen 94 per cent since 1991, while the energy packed into them per kilogram has increased. Bernstein sees usage costs continuing to fall by 20 per cent a year, cannibalising competing technologies for the next decade.
Belur won’t talk dollar costs yet for Enphase’s 1.2kWh battery, which comes with built-in inverter and software to communicate with the grid. But he insists that all up, the “plug and play” system will be competitive with Powerwall. Australia will be its global launchpad.
Meanwhile, Panasonic, a battery supplier for Powerwall and one of the “big three” lithium ion players alongside Samsung SDI and LG Chem, will launch next week an alliance with Australian electricity retailers targeting home storage.
Yet to be seen is how these suppliers align with local retailers. AGL Energy launched recently a 6kWh lithium-ion battery and is due to make larger sizes available later in 2015. Origin Energy is understood to be bringing forward its battery launch plans, potentially to the third quarter, while EnergyAustralia is in talks with Enphase on its battery, to add to their solar panel alliance.