A boom in new battery storage options for solar panel electricity has the potential to transform home energy usage. With sunny Australia well-positioned to take advantage of the new technology, how many of us will choose to abandon the traditional electricity grid and power our homes independently – and at what cost?
There’s a revolution heading for Australian homes: a device that allows us to take power into our own hands: the home storage battery, which stores power generated from solar panels during the day and releases it on demand, giving us power 24 hours a day.
Dubbed the “missing link” of the renewable power industry, the popularity of the new battery is set to soar. According to a report by the Climate Council, more than a million Australian homes are expected to install one within five years, with Australia tipped to become the number one market for home battery storage by 2018.
Traditionally, living off the grid was viewed as the ultimate ‘greenie’ lifestyle and too expensive for many Australian families. But when Tesla launched the ‘Powerwall’ in January this year, it generated huge community interest through social media and helped forge a clear pathway for independent power to move into mainstream living. Homeowners now have the potential to not only sidestep rising utility bills, but also go off the grid altogether.
However, the consequences of doing so could be far-reaching and the question of whether homeowners should abandon the central electricity grid is open for debate.
The Federal Minister for the Environment Greg Hunt envisages a time when a significant number of Australians become independent of the electricity grid. He told ABC’s Lateline in October, “It’s inevitable. We have about 15 per cent of Australians, the highest level in the world, who have solar power. Increasingly, we will see the adoption of storage, which is the key thing that allows people to be off-grid. This is clearly the future.”
The pioneering Powerwall system is a compact seven-kilowatt hour lithium ion battery, sufficient to power most homes through the evening peak using electricity generated by solar panels during the day. It neatly affixes to a house wall, connecting to solar panels on the roof, an inverter for changing direct current from the panels into useful AC, and a meter.
Predictions of its success are linked to a change in attitude towards renewable energy in Australia, which is gaining momentum. Australians are embracing the need for collective efforts to tackle the threat of climate change. Through using solar power generated from their own rooftops and stored for later use, homeowners can reduce the environmental impacts of fossil fuel power generation and downsize their own carbon footprints.
On top of this, installation costs could soon be outweighed by the financial returns. Curtin University Professor of Sustainability Peter Newman says people are already reaping the benefits of battery systems that pay for themselves from reduced or negative power bills, with Perth leading Australia in the move to home energy systems.
“We are well past the early adopter stage as many households are now buying PV and batteries combined,” he says. “One in five Perth homes now have solar PV on their rooftop with some suburbs over 50 per cent. Those who wait a while longer will find themselves at a much cheaper point on the price curve, but they are not making the savings in their households that they could be now.”
A 6-10 kWh system currently costs between A$10,000 and A$20,000, but prices are likely to drop as more people purchase them. Retail competition is strong, with home energy storage systems from BYD, Samsung and LG joining the market, and power distributors such as Queensland’s Ergon Energy and WA’s Alinta Gas trialling new leasing programs. According to the Climate Council, going off the grid could be as cost-competitive as staying connected as early as 2018.
“Solar-storage energy systems are running out the door for off-grid and on-grid applications,” says CEO of Solar Balance and Adjunct Professor at the Curtin University Sustainability Policy Institute (CUSP), Rod Hayes.
In Western Australia, the technology has been scaled up to include strata homes and whole suburbs, such as the One Planet Community development in White Gum Valley in Fremantle, for which CUSP received a Federal Government ARENA grant worth more than $500,000 to install the development with PV and batteries and monitor the results over several years.
In the One Planet Community, excess solar power is stored in batteries for use at night and also exported to the grid during the day and converted to a credit, delivering benefits to both resident and developer.
“Our research has developed the concept of a micro grid for solar and storage on strata apartments,” says Curtin University Research Fellow Jemma Green, who is working on the four-year project. “The solar panels and batteries sit on the strata and are owner-managed by the strata manager. This allows tenants to pay their electricity bill to the strata company to provide an additional revenue stream to owners to justify the capital investment in solar and storage. In other words, strata companies can effectively become small utilities,” she explains.
But on a mass scale, the capacity to move towards a distributed power model puts home energy systems well and truly in the ‘disruptive technology’ bucket, with the potential to significantly affect Australia’s centralised power sector and its three main electricity grids, including the eastern seaboard grid, the largest interconnected power system in the world.
By installing a home storage battery, a homeowner pays less to the power sector and becomes an energy producer rather than a consumer only. This shifts the cost of centralised power infrastructure to customers who have not installed a battery and as a consequence, the grid maintenance costs could become more expensive for those remaining on the grid.
As the adoption of home power systems accelerates, so too will the change from centralised power to distributed power. This raises public debate about who will be ultimately responsible for providing reliable electricity and could even render the current utility business model obsolete within a few years.
“The traditional uni-directional power system is rapidly disrupting,” says Newman. “We must adapt to a new, distributed bi-directional energy system.”
Newman’s research shows the optimal way forward is for people to have their home power systems working symbiotically with the central grid.
“Evidence shows the existing grid will still be needed, especially for essential services that require constant and large amounts of power such as hospitals; for customers whose own system breaks down, and in densely populated areas where there is not enough roof space to layout sufficient solar PV panels,” he explains. “And grid-connected households can feed back their excess electricity into helping cities become regenerative.”
Griffith University School of Engineering Professor Rodney Stewart on The Conversation highlighted the need to develop intelligent energy storage management systems that enable communications between the grid transformers and other energy storage devices, including home batteries. These allow excess energy generated by homeowners to be released to the grid on an as-needs basis and could keep grid-maintenance costs down.
“A combined solar PV and battery storage system should not get people thinking they can survive off the grid. Instead, they should be thinking about how they can be part of an intelligent electricity network that delivers efficiencies for all,” explains Professor Stewart.
“Intelligent metering combined with a rethink on electricity tariff arrangements such as time-of-day pricing and peak pricing could enable an efficient, cost-reflective pricing regime to take hold in Australia.”
Peter Newman agrees. “It’s time for us to show how to make a 21st century grid work as a collection of distributed local power sources,” he says. “This is a new kind of energy market, operated by consumers, which will change the way we generate, consume and transact electricity. Facilitating this transition can enable significant economic advantages to a city,” he says.
No doubt we can expect to see wide changes in Australia’s energy system as we shift from centralised power to distributed, bi-directional energy generation. In the future, we may not only be powering our own homes and vehicles, but connecting to other power devices and feeding the country’s overall energy demands. And with Australia’s sunshine tipped to become a major resource in a fossil-fuel-free world, the future of solar power is shining brightly.