Battery-maker LG Chem and inverter giant SMA have teamed up to offer a storage solution they say is tailored for residential use.
There are memorable partnerships where the talent is spread equally (Simon-Garfunkel, Lennon-McCartney) and forgettable ones where it isn’t (Batman-Robin, Michael-Ridgley).
In solar, battery-maker LG Chem and inverter giant SMA have been teamed up for the past four years promoting a storage solution they say is tailored for residential use: SMA’s Sunny Boy Storage 2.5 battery inverter with LG Chem’s RESU10H storage unit.
It’s a partnership that’s recently been extended, with both parties expecting strong growth ahead.
“There is a massive opportunity with the feed-in tariffs coming off, particularly in NSW,” says LG Chem business development manager Jamie Allen.
In NSW, about 160,000 properties which have been receiving about 60c/kWh for surplus solar energy sold into the grid will be disappointed when they realise that “now they’ll have to pay bills”.
In Victoria, the same can be said for about 60,000 households and in South Australia about 30,000 solar system owners.
Allen says LG Chem expects sales of battery storage to increase fourfold annually.
“That’s very rapid growth, driven by the cost of electricity going up, battery prices going down and solar getting very cheap … and consumer confidence in general in the solar space.”
LG Chem offers storage all the way from containerised utility-scale solutions to smaller commercial to residential, and 40-50% of investment is channeled into battery development.
Allen says the benefit of solar-and-storage is best understood by looking at the basic economics – lower utility bills. A typical system costing about $15,000 with 5kW of rooftop solar, a Sunny Boy inverter and a 10kWh battery will generate about 22kWh, leaving about 9kWh for nightime consumption.
The LG RESU10H unit gets the average household “very close to covering that 10kWh nighttime demand,” he says.
Amortised over 10 years, it generates 68,000kWh and gives a levelised cost of energy of 22c/kWh. “This is basically fixing in your cost of energy, you can look at it as a long-term investment.”
Additional to an inverter connected to the solar system, the SMA Sunny Boy turns AC back into DC to be stored in a battery for later use.
SMA global product manager Scott Partlin says solar-and-storage solutions are as straightforward as they may look or as salespeople may have consumers believe.
“There is a lot of engineering and technical expertise that goes behind them. With the wrong solutions or without that technical expertise consumers who are going to make these investments won’t get those returns Jamie was showing,” Partlin says.
The average system in Australia generates 5kW with typical self-consumption around 30%, he says, “but by adding storage they can take that up to 80-85% quite easily.”
Monitoring software and smart home capabilities will turn the energy market upside-down, Partlin says, with consumers – not policymakers – calling the shots.
“Within Australia we’ve spent 50 years creating an electric power grid, which pushed power out from centralised coal-fired generators,” he says. “We’re going to spend the next 50 years deconstructing it by making homes self-sufficient and smarter.”
LG expects between 15,000 and 25,000 new grid-connected solar and storage systems in 2017 and between 60,000 and 80,000 in 2018.
SMA’s research shows that for about 80% of residential consumers in Australia 2.5kW is “all they’re ever going to need from a battery 95% of the time.”
Batteries are getting cheaper but they will get cheaper still, Partlin says. Consumers making the decision to install today are those who want to “get that payback”, he says. “By making an economical investment and not over-investing today they’re making the best use of the battery so that they can use it again in the future.”
Asked by EcoGeneration to estimate a payback period on the LG Chem-SMA combo, Allen stops short. “I really don‘t like this question,” he says. “Especially when the alternative is buying from the grid.”
Still, he estimates payback between 6 and 9 years depending on the rooftop PV system and retailer’s margin. Partlin says payback can be much shorter depending on the circumstances. For a Sydney resident on time-of-use tariff using 10kWh between 2pm and 8pm, the payback period is “really, really good”, he says, where 22c/kWh is the cost of electricity versus about 60c/kWh from the grid. “Under those conditions maybe [payback] is four years.”