Contrary to the popular belief, battery energy storage is not something new. It has existed in the form of UPS systems for offices and even jump-start packs for cars. In many remote corners of the world, HGV batteries (lead acid) still serve as a mean for power storage and transportation.
More recently, batteries as big as 250 MWh capacities have been installed to cater for the need of a commercial concern in Europe. Similar projects with up to 400 MWh capacity (Southern California Edison Project) are under construction across the world. As the price of battery cell goes down and as the round trip efficiency and life improves, storage solutions are bound to find newer applications in commercial as well as utility-scale and residential sectors.
In this article, only battery energy storage systems for homes will be explored. These systems have seen limelight ever since the announcement by Tesla in April 2015. The TESLA Powerwall was revealed by Elon Musk in his distinctive swagger last year. It was somewhat surprising to see that Tesla- a company who so far has produced Hi-End cars- announce a product that will be quite cheap in price compared to similar products already in market. Although the product has not hit the market yet but orders for over a billion dollars are already on the books. Full production of these units will commence in 2017.
In the wake of Tesla’s announcement and the rising interest in the residential energy storage, many companies have aligned their products to cater for this emerging market. Some have modified (upscaled/downscaled) their existing products, while others (e.g Orison ) have started a Kickstarter campaigns to realize/ commercialize their product.
The greater the competition, the greater will be the benefit to the end-user. Because of this greater surge in activity, battery storage technology has seen much improvement in the last year . For instance ASD patented Pacadu technology through which battery storage systems will not be compromised if a single cell becomes faulty.
Furthermore Pacadu technology also allows the system to be scaled up not with just similar products, but entirely different battery packs. On the other hand the pace of research in graphene battery storage has also picked up.
In the table (below) prices of battery systems that already available in the market have been compared to Tesla Powerwall. All the products listed have a capacity range of 4 kwh-7 kwh. These products have been arranged in descending order of price/kWh.
The “life” mentioned in the third column is the warranty life (in some cases full and in others prorated)
It can be noted that Tesla comes out to be cheapest in price per Kwh capacity with $429/ kWh (£316 /kWh). The most expansive product in the table is the Saft Intensium 24 M at $2398 / kWh (£1688/kWh). This means the Powerwall is more than 5 times cheaper compared to similar products in the market.
Tesla Powerpack is another variant that will have 10 kWh capacity and is targeted towards commercial sector. The Powerpack has been projected to reach price point of $ 250/ kWh. The difference in the price is also because some products come with inverters, charging systems and cell balancing systems while in others they have to be purchased separately. In the case of Powerwall, battery charging system and cell balancing systems are included in the price.
Elon Musk was correct when he forecasted “staggeringly gigantic” increase in the energy storage market. A research by Cairn Energy Research expects this market to grow by 51.1% each year for the next 5 years. The means a rise from global revenue of $6.7 billion in 2015 to $13.2 billion in 2020. Batteries have never been in history been as important as they are today, particularly with their potential of providing the world a means of sustainable transport. However, Mr Musk wasn’t correct when he mentioned that his product would go on to help the developing world who are currently living off-grid.
Home battery energy storage has existed for well over a decade in the developing countries, particular in subcontinent (Pakistan, India, Bangladesh). The thrust for developing such systems came from the poor grid power performance. Power outages are a norm in developing world and occur on a daily basis in many parts of south Asia. Continuous uninterrupted power has been in demand by both businesses and households. While large businesses could afford to buy stand-by generators, home owners found them out of reach. Thus cheap home energy storage systems were made indigenously and most of them use deep cycle lead acid batteries. The inverters and charge controllers similarly were also locally made in these countries. Many of the electrical components ( such inverters) made in the developing world are not very efficient. Therefore the round trip (energy storage to energy delivery) efficiency of the systems is poor. However the costs are extremely low. These UPS systems of up to 4.4 kWh capacity are sold in the market for as low as £340 pounds (everything included).
The indigenous system has been serving the subcontinent and African countries well and Tesla would find it hard to penetrate this market. The only advantage Tesla Powerwall has is its life. Lead Acid batteries require maintenance and even with that, these locally sourced UPS systems don’t last for more than two years.
It is also interesting to note that many Electricity providers in the west are not keen on the permeation of battery energy storage systems for homes. Their concern is twofold. Home energy storage, coupled with renewable energy system (like PV) can effectively wipe-out the need for grid energy. Secondly, in homes that are on-grid, residential storage can be fraudulently used for selling energy back to the grid.
However, utility scale storage 250 MWh – 1000 MWh hour batteries has seen greater interest both from the power generators and grid operators. It provides them an opportunity to revamp infrastructure. It has been stated that in the next five years batteries will be used as an integral tool by electricity providers to balance generation and load and between supply and demand.
Whatever the pace of development in battery technology and the politics, it is clear that home energy systems are here to stay. They have made their mark and will have an important role to play in smart grid technology of the future.
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I believe the price you are quoting for the PowerWall is based on the cost to the installer, not the installed price. Price will definitely go up with installation, permits, commissioning, etc.
Thats true and it has been touched on in this article
Ofcourse powerwall isn’t going to be deployed enmasse to LIC. It’s an early adopter niche product that was delierately sized and styled for a single core market, European, Californian and Australian homes that are disconnecting from the grid because of entrenched corruption and high prices.
Musk currently has a battery shortage. When Gigafactory is spooled up and the vehicle and utility is saturated, we’re going to see what Musk’s real plan is.
Well the price seems to be one to target the mass market
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