Residential solar PV is a stunning little invention with one big problem: when it’s pushing out peak power, at precisely midday, everyone’s out or at work. This means massive amounts of generation are exported to the grid only to be scooped up by retailers and on-sold at a terrific mark-up.

That’s a good deal for the big guys but a bum deal for owners of solar systems.

The solution is to buy an expensive battery and store that excess solar energy for use in the late afternoon and at night.

But batteries are hard to sell. They cost a lot and it’s often up to busy installers to explain their benefits in a few minutes or press on with the more important work of laying panels on rooftops.

Many installers EcoGeneration speaks to well-understand the good points about battery storage but quickly conclude that prices have a way to go before they can easily get customers over the line.

Here’s an idea

The storage market always seems to be on the cusp of exponential growth, according to forecasts, and costs are predicted to fall as the technology matures and electric vehicles – which use far bigger batteries than are mounted in houses – inevitably replace petrol-coughing cars and trucks.

A quick way to knock half the cost off a battery, however, is for the government to chip in.

If that were to happen not only would many more of the 2.2 million or so residential PV systems in Australia immediately yield more value to their owners, but the quality of power in areas of the grid with high PV penetration would be improved – a bonus for network providers beset by leaps in voltage.

“The trouble with solar is 38 times this year solar in the middle of the day has had a negative value,” says DC Power Co co-founder and CEO Nic Frances-Gilley, speaking to EcoGeneration in late July. “The more solar we bring on the more days there will be when it has negative value … and solar owners will end up losing the value they could get from selling it.”

Those who don’t have solar will benefit from a leap in battery installations, of course, as the price of electricity on the grid should in theory drop. “It’s an interesting dynamic coming to the marketplace: solar will be worth less if you don’t use it, but worth more if you do.”

“The more solar we bring on the more days there will be when it has negative value … and solar owners will end up losing the value they could get from selling it ,” says Nic Frances-Gilley.

Canberra go halves?

Frances-Gilley has authored a white paper with Marchment Hill Consulting which suggests a simple solution: that 400,000 owners of rooftop residential systems install batteries enabled with virtual power plant capabilities, with half of the cost covered by a government subsidy.

For owners of solar in large houses with power bills over $2,500 a year, it already makes sense to own a battery, Frances-Gilley says. As power prices rise and batteries become cheaper and more efficient, the decision to own will only become easier even for smaller households.

A bulk storage deal that helps maximise self-consumption of residential solar would stabilise voltage levels, reduce the evening peak and relieve other forms of generation that have seen the afternoon ramp steepen over recent years.

“The government also needs to firm up the whole energy market for the incoming renewables, and batteries do that,” he says. “[They’ve proposed] that with a great big battery, Snowy 2.0. Well, actually, for half the cost of that you can afford a 50% subsidy for 400,000 batteries, which will deliver the same output, but closer to where it’s needed, in half the time.”

The white paper’s suggested “Sunny 1.0” program could be implemented within one political term – if it receives bipartisan support, Frances-Gilley says.

“The truth is,” he continues, “we probably need Snowy 2.0, we probably need the Tasmanian Battery of the Nation and we probably need four Sunny 1.0s … or 1.6 million subsidised batteries. That level of battery would firm out this whole market.”

If firming is not added to the system, he says, renewables will continue to “skew” the market, distort prices and get a bad rap. “That’s why they [Canberra] need to start building the future energy infrastructure.”

Owners would have to agree to have their systems connected in a virtual power plant to receive the benefit. At times of extreme peak demand, the linked batteries would be triggered to relieve stress in the NEM. “That’s the added value,” he says. “But before you get at the complexities of VPPs, however, you need to get some of this solar out of the system – and householders should do that because it makes sense. If batteries were half the price, it would make sense for all householders.”

Consumer confusion

Much is unknown about the way battery-owners use the technology, and trials of virtual power plants of tens or hundreds or thousands of connected storage systems are in their very early stages around Australia. Battery-maker sonnen, for example, is packaging VPP capability into a set-rate energy offer, so that consumers get to make a relatively simple decision about what they’ll spend on power each month without having to calculate the value to other parties of accessing their surplus solar. Not enough households have signed up to the sonnenFlat offer for the company to estimate its potential value, but it has all the regions it needs to step ahead on marketing the offer up and down the east coast with retailer Energy Locals.

In Adelaide, AGL’s VPP trial is inching towards its target of signing up 1,000 households. The retailer is reluctant to share many details as yet but charts shared at a conference recently showed a levelling effect on demand – as hoped for.

At a far smaller scale TasNetworks’ Consort project in Bruny Island included installation of batteries in 34 homes, and follow-up research found some consumers weren’t entirely positive about the experience. A small number, 6%, were anxious about the trial, and many did not enjoy the installation process.

In the TasNetworks project, third party Reposit Power gets to access its smart meter technology in the residential systems and trade surplus or stored energy to exploit the market.

“What can go wrong is if this agent starts making decisions that the customer doesn’t expect, the agent begins to look a little bit dodgy and they lose trust in their agent,” TasNetworks senior innovation engineer Laura Jones said during a presentation at the Australian Clean Energy Summit in July. But it’s not all bad, she said, as 96% of people on Bruny thought the benefits of the project outweighed the issues.

Between 60,000 and 80,000 residential solar PV systems around Australia include battery storage.

In front of the meter

Another possible solution to voltage issues in suburbs that host a lot of solar might be the notion of “community energy storage”, or solving the problem in front of the meter instead of behind it. In Canberra, researchers at the ANU are looking at neighbourhood-scale storage, which would give a lot of the benefits of aggregation but also incur network charges. Units could serve households on feeder lines and be sized in the hundreds of kilowatt-hours to low megawatt-hours.

“Neighborhood-scale storage can provide the same network services and may prove to be more economic and equitable, if we can develop the right model,” says Bjorn Sturmberg, research leader in the Battery Storage and Grid Integration Program at the ANU College of Engineering and Computer Science.

The white paper is part of the Lead The Charge pledge, which is an attempt by DC Power, Future Super, Australian Energy Foundation and others to light a fire under consumers.

“It’s a pledge for householders to say, I care about the environment, I’m acting on renewables and I’m going to do three things: I’m going to stop using a power company that owns fossil-fuel plants; I’m going to make my home more energy efficient and move towards renewables, and; I’m going to ask government to pause on all the politics and support householders to get on and act in this renewable space.”

If managed well, a shot of government funding would inspire price rivalry between storage brands or preference could be shown to those that manufacture in Australia or source local resources. Otherwise, consumers could be left to make their own choices and fire up competition among battery-makers that way.