Smart Buildings

Energy Storage Technology Starting to Feel More at HOME

Sonnenbatterie has resurrected discussions on the residential and commercial energy storage market. The German storage integrator, who has sold over 4,000 battery systems across Europe, raised almost $10 million of venture capital for their expansion across the Atlantic. The firm collected $9.4 million led by Munich Venture Partners, a cleantech VC specialist and Chrysalix SET, an Amsterdam-based management firm, along with previous investor eCAPITAL. However Sonnenbatterie are well aware of the vastly different demands of the US market, compared to their native Germany. The firm’s CEO, Christoph Ostermann, said that German residential customers are fed up with high electricity prices and want independence from the utility. In the US, the motivation often seems to be the desire for backup power for when the grid goes down or during natural disasters, as well as a hedge against utility pricing. As a technology, residential and commercial battery storage is still expensive and unproven, but the industry and […]

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Sonnenbatterie has resurrected discussions on the residential and commercial energy storage market. The German storage integrator, who has sold over 4,000 battery systems across Europe, raised almost $10 million of venture capital for their expansion across the Atlantic. The firm collected $9.4 million led by Munich Venture Partners, a cleantech VC specialist and Chrysalix SET, an Amsterdam-based management firm, along with previous investor eCAPITAL. However Sonnenbatterie are well aware of the vastly different demands of the US market, compared to their native Germany. The firm’s CEO, Christoph Ostermann, said that German residential customers are fed up with high electricity prices and want independence from the utility. In the US, the motivation often seems to be the desire for backup power for when the grid goes down or during natural disasters, as well as a hedge against utility pricing.
As a technology, residential and commercial battery storage is still expensive and unproven, but the industry and the public are increasingly seeing it as a vital piece of the energy puzzle.
The German startup, founded in 2008, has built a software platform to integrate solar panels, lithium-ion batteries and home energy management into an "intelligent" system. These systems range in price from about $13,000 for a 4.5-kilowatt-hour storage system to about $21,000 for a 10-kilowatt-hour system, according to the CEO. The company offers modular systems sized up to 60 kilowatt-hours. Companies such as Coda, Green Charge, Stem and SolarCity have started financing energy storage via the same lease and third-party ownership structure that has ignited the residential solar industry, removing the technology risk for the customer. In February, Green Charge and partner TIP Capital announced a $10 million fund to support new projects. Then, in July, Green Charge Networks brought in $56 million from K Road DG to expand its energy storage program; the company claimed this was “the largest amount of capital raised by any company in the intelligent energy storage space" at the time. That was until Stem banked $100 million for its no-money-down storage.
Whilst the demand for energy storage has been around for some time, and the technology improving continuously, it seems that the trigger for widespread adoption of home based energy storage lies in the scaling, financing and cost reduction. Much like what we have seen in the solar panel market.
In the past 5 years, solar panel prices have declined rapidly, dropping to as low as 50 cents per watt. However, panels are just one component of the total cost of installed solar. As panel prices stabilised, it became clear that the remaining cost reductions were going to have to come from other elements of the PV system - racks, inverters and wires, as well as soft costs like permitting, sales and logistics. There may even be opportunity for cost reductions in the configuration of the system itself. Speaking at the Energy Storage North America conference in October, SolarCity CTO Peter Rive said, “One of the cool things about storage is that if you're already installing a solar system, the incremental cost of also getting a storage system installed is low.” Rive sees this as being particularly impactful once storage systems are integrated into the same box as inverters. In a February report on the economics of grid defection, Colorado’s Rocky Mountain Institute (RMI) looked at how soon “utility-in-a-box” applications, which combine solar and batteries, would be competitive with grid power. It found there are a few US locations that are already competitive, such as commercial customers in Hawaii, with the potential to expand to other high- priced regions like New York and California as early as 2020. We also covered the potential for distributive future grid systems in our report on the market for connecting the Smart Grid with Building Energy Management Software (BEMS) - http://memoori.com/portfolio/connecting-smart-grid-with-bems/
Referencing forecasts from Bloomberg New Energy Finance, Navigant and EIA, RMI predicts the cost of lithium-ion battery systems could drop from about $600 per kilowatt-hour today to less than half that by 2020. When announcing its new Giga factory, Tesla CEO Elon Musk said he expects to deliver battery cells at just under $200 per kilowatt-hour.
Such developments will be music to the ears of the energy storage industry, as well as green and smart technology advocates around the world. The sector has seen strong development of the power generation and energy efficiency markets in the past 5 years. Will the second half of the decade see the energy storage market mature, completing the clean, smart and green picture of our future homes?

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