For owners of residential solar systems the climate has changed. The generous feed-in tariffs that made rooftop PV an obvious investment have ended. Instead, retailers in some states pay as little as 5 cents/kWh for surplus energy generated by suburban homes. The solution is to store that energy for later use, rather than buy it from the grid at a much higher rate.
The renewable energy industry has been waiting for homeowners to twig to the benefits of storage and one estimate has it that 2017 will see three times as many home battery installations as last year. The problem is that batteries are a hard sell – they are expensive and their benefits are not easy to explain.
Most consumers don’t really understand what storage can do, and the sad truth is that many in the solar industry – installers included – are failing when it comes to advising customers on retrofits to existing systems.
EcoGeneration decided it was time to ask a few experts in the industry whether consumers who were thinking about adding a battery had much of an idea what they were getting themselves into and whether installers and the solar sales force are up to the task of helping them find the best solution.
Charge ahead
One Stop Warehouse/GCL technical development manager Anthony Buckwell says there are two kinds of consumers: the early adopters who do hours of research online and may or may not be technically literate, “these customers can be great and easy to sell to but sometimes they require careful customer management,” he says. The second type of consumer just wants the battery storage to escape the grid and be assured of back-up, but “sometimes they don’t have a full appreciation of the technical capabilities of energy storage”. They just want it to work – which is fair enough, he says.
Installers are also pretty much split down the middle, he says, between those who have taken the training, conducted their own research and “embraced the technology”. Generally, they’re doing a good job and overcoming any potential technical barriers.
The remainder aren’t taking it seriously. They don’t appreciate the extra technical upskilling required – some to the point of being stubborn. “These installers generally have troubles,” Buckwell says. “The reality is, the energy systems are electrical, they involve IT, metering as well as storage systems. Installers must take on the responsibility of upskilling themselves.”
Buckwell’s tip is to include back-up circuits, which will cost a little bit more but generally are worth it, he says, as it opens the full potential of a system. Salespeople may not include back-up circuits in order to sell the system at a cheaper price, but is it worth it? “We have come across a few poor customers who didn’t have lights in a blackout situation – upon investigation we found there was no back-up circuit installed.”
Commercial influence
Clean Energy Council general manager installation integrity Sandy Atkins admits to relying on “gut feel” when it comes to assessing consumers’ and installers’ levels of sophistication around storage.
Consumers can be divided into those who have a pretty good working understanding of solar and storage from practical experience and those who want to keep up with the Joneses. “They want to get into it without really appreciating what it means and what it does,” Atkins says.
His concern, again on gut feel, is that installers and consumers are relying on retailers that have relationships with brands and are very likely more concerned about sales targets than well-designed storage solutions. The problem with “highly advertised systems”, he says, is consumers may be happy with their premium brand purchase but they won’t necessarily know what it does or how to get the most out of it.
Installers, meanwhile, will be more focused on meeting installation standards. If a consumer wants a 6kWh Tesla or LG battery, who’s to say there’s anything wrong with that? Whether or not a battery that size suits the customers’ needs is a whole other issue.
To understand where a battery fits in, solar PV owners need to have an idea of how much solar energy is being exported and how much is being bought from the grid when solar isn’t generating. There will be additional intricacies, such as matching inverters with peak load, but consumers need to get the basics of export and import, or “power-shifting”, he says. “That’s the key concept for them to understand.”
It’s slightly meaningless to talk about capacity of batteries and panel arrays anyway, as equivalent systems will generate varying amounts of kilowatts depending on the installation. “Someone might have 5kW of panels behind a tree and someone else has 1kW of panels [unobstructed] and get more energy out of that,” he says. “For batteries it’s the same; it’s not the type of battery per se, it’s about whether or not it’s going to store the energy they need and give it back to them when they want it.”
The key, of course, is for a system to be well designed. The CEC runs an accreditation program for solar system designers, and Atkins underlines the importance of experience and training to ensure systems match requirements. A designer who can look at data collected from a smart meter will have a good idea how much energy will need to be stored to satisfy average demand, given that generation will vary from season to season.
“At least then the consumer’s making an informed decision,” he says. “They could then go to a different retailer, who has a different product, and then at least they’re comparing apples with apples.”
The CEC is working on revised storage installation guidelines, an update to its first set issued in 2016.
This goes with that
Consumers are fitting storage in greater numbers, but as to whether they understand how it can augment a solar PV system, SunWiz managing director and founder Warwick Johnston isn’t so sure. “Consumers are only just starting to look at evaluating things in terms of dollars per kilowatt hour,” he says. “Solar isn’t quite a commodity, talked about as dollars per watt, but it’s closer to being that than batteries are.”
Many installers are just as perplexed about the possibilities of batteries as consumers, he reckons. “There are a lot of grandiose claims being made [by sales teams] about what batteries will do for someone – install this and you’ll never have to pay a bill again. It’s something that’s been said about solar for a while but reputable upgraders will tell you it’s not quite the case.”
Sales claims that a battery can be cycled three times a day, for example, aren’t helpful at all for most householders, he says. A typical home with a 5kW system will be exporting electricity for most of the day. “There isn’t an opportunity for the battery to cycle except on cloudy days or days where you’ve got lots of loads going on and off,” he says. “People are making claims that aren’t really relevant to the consumer at this point.”
The chance of a battery being fully charged and discharged three times a day is really not likely with most systems, so fantastic sales claims aren’t helpful if the aim is to educate consumers about the possibilities of storage. It’s evidence that the solar industry “doesn’t really get batteries yet,” Johnston says.
In its 2017 Battery Report SunWiz estimates more than 6,750 battery installations occurred in 2016, where an installation could include more than one battery. Johnston says minimum installs are about 3.6kWh, the most common about 6.4kWh, and the trend is for larger units capable of 8-10kWh.
Enphase technology is common at the smaller end, with LG and Tesla making up the larger end.
Wealthy customers are opting for larger storage and may be installing solar for the first time, he says, and smaller storage solutions are more common in retrofits, where owners know their consumption and what their rooftop array is capable of.
The next hot consumer item will be the optimisation program that explains home energy use on the screen of a smartphone. “Ultimately I believe it will become a software competition,” he says. “Batteries will be a bit commoditised but how well you can utilise them will be [the determining factor].”
Energy isn’t free
When it comes to batteries a lot of consumers don’t really know what they’re in for, says SolaX chief engineer technical support Edwin Cotter. “You mostly find they see an ad for batteries, start asking questions to people who are into solar and then they get sold on the idea.”
The most common misperception is that the installation of a battery is rewarded with free energy, which simply isn’t true.
“Instead of paying 32 cents for power from the grid you’re still going to be paying between 10 and 15 cents for cycling the battery, and then you’re only saving 10 cents, after all is said and done,” he says. “There is not much technical understanding among the consumers about what is going on.”
Cotter gives a quick rundown of how he gets his numbers. Take a typical $6,000, 6kWh LG Chem battery, for example. It’s lifespan is 6,000 cycles, so that’s $1 a cycle. Each kWh you cycle it for costs the user about 10 or 15 cents, he says, “which is less than what it costs to buy energy from the grid but it’s still something – and no-one considers that number.”
Manufacturers may claim batteries have about 80% of capacity left in them once they’ve hit the limit of recommended cycles, but Cotter says for many brands it’s just not the case. “Lots of people aren’t factoring in the cost of the battery as a deteriorating factor,” he says. They may think it will take them only a few years to pay off their system but the true payback period is more like seven or eight years, he says.
Installer quality varies greatly, Cotter says. Some may have made it through a battery accreditation course but will install a system and leave it performing well under capacity or not program it to meet the customers’ expectations, whereas others only call Cotter to confirm what they already know. “I would say most installers know what they’re doing, once they’ve installed one or two [battery systems],” he says.
The worst breach of common sense he’s seen was an indoor-rated system installed outdoors, and not even installed correctly. The battery and inverter were rated and labelled IP20, not suitable for outdoor use. Some installers will also fit inverters without CT sensors, so the inverter isn’t fed the information it needs about energy consumption within the house to be able to work out when to store energy and when to export it to the grid. “The inverter won’t want to work until it’s connected to a sensor, but the installer will think it’s a fault and phone me,” he says. Quite a few installers don’t grasp that they need a CT sensor or energy meter in a system for it to work properly. “They don’t put it in until they’re told to.”
For consumers, Cotter says finding a good installer can be hit or miss. “The very good ones make it their life’s mission to understand everything,” he says. “The bad ones call up a week after a [battery’s] been installed because the customer says nothing’s working. They’ve walked away from the job thinking, ‘I’ve plugged all the plugs into where it looks like they go, so my job’s done.’”
Things are changing, slowly. Local companies Reposit Power and Solar Analytics are good examples of how the industry can create knowledge within the consumer base, Cotter says, with software that translates the complexities of energy production and consumption into simple charts. As homeowners get the knack of interpreting charts which show a typical 24 hours of load, PV generation and battery import and export, they’ll quickly understand the possibilities of a well-optimised system and word will spread.
They may also think about how to change their energy usage to achieve maximum savings. Already people are using Google to research purchases, instead of just phoning an install company asking for a Tesla Powerwall.
Sales data is hard to come by in the solar industry, but Cotter says SolaX has sold about 4,700 hybrid inverters, about half of which are connected to LG Chem batteries. He estimates there are about 400 Tesla Powerwalls installed in Australia, mainly connected to SolarEdge inverters, followed by SMA units. SolaX makes a hybrid inverter.
It’s a good start
Over at 360 Energy, sales and marketing manager Doug Meldrum is looking over the SunWiz report, which forecasts 20,000 battery installations in 2017. “It’s a pretty good start,” Meldrum says, but it’s still less than 8% of the 270,000 households coming off generous solar feed-in tariffs in NSW, Victoria and South Australia. “I get the feeling the market is waiting for someone to get out there and create the market [by promoting the benefits of batteries to homeowners],” he says, particularly among homeowners in South Australia who have grim memories of last September’s blackout.
The allusion that storage is too expensive to make economic sense may be a myth, Meldrum reckons, perpetuated by solar companies that simply lack the knowledge and ability to explain the benefits. Over the past five or six years lithium batteries have become at least 60% cheaper. Although expectations are for further price falls it will more likely be incremental year-on-year drops of around 5-8%. After accounting for inflation and the opportunity cost of not installing storage, “batteries certainly make sense today,” he says. “If you are adding solar and batteries as a brand new system then it absolutely makes sense [to not delay].”
For consumers in NSW who lose a 60c/kWh feed-in tariff and have to start paying around 38-50c/kWh for energy from the grid, “batteries pretty much are a no-brainer”. For other markets, the investment may be harder to justify.
A well-designed system will cap the price of electricity and add value to a property, he says. Measured against alternatives such as a cash deposit or the instability of the sharemarket, an investment in storage “has some merits”.
Meldrum offers his mum’s set-up as a good example. The self-funded retiree has a 3kW solar-and-battery system and has no trouble understanding the energy use graphic she can call up on her smartphone. “There aren’t enough of these sorts of people with these happy stories just yet,” he says.
He says installers have a varied record when it comes to explaining to a householder why they should invest in a battery. There’s still a bit of a mindset that “cheap is good”, he says, but things go wrong and installers are very reliant on manufacturers and wholesalers for support and training. “I just don’t know if that’s been rolled out as well as it needs to be.”
Let’s face it, residential renewable energy systems are complex. If a top electrician has to fix something that should have been covered in the training, the call out fee will fall far short of what he could earn working on a new install. Manufacturers and wholesalers that haven’t done a good enough job of training installers should understand that. “It’s creating a bit of disquiet among installers and I don’t think the manufacturers have really come to terms with that just yet.”
Meldrum’s hope for the surge in battery installs, when it happens, is that the market starts from a very high quality base. “So far the sense is that most installers are looking for a quality battery, and I think that’s really heartening.”