South Korea battery storage manufacture LG Chem is seeking to regain the initiative in Australia’s burgeoning home battery storage market, announcing a new partnership with inverter giant SMA to target solar households wanting to make the most of their rooftop solar generation.
Although statistical evidence is scant, LG Chem was widely considered by the industry as having a leading position in the Australian battery storage market. But that position is now under threat, both from the emergence of new rivals such as Enphase, Sonnenbatterie, Redflow and others, but also by the Tesla-led drop in prices.
LG Chem and SMA’s joint solar storage offering comprises SMA’s Sunny Boy Storage 2.5 battery inverter and LG Chem’s RESU 9.8kWh lithium-ion battery, and will be available in Australia from December 2016.
LG Chem, which is already well established as one of the world’s leading manufacturers of lithium-ion batteries, says the products combine to provide a “highly flexible and cost-effective” solar storage solution that can cut a household’s grid electricity costs by up to 80 per cent.
Like many of their competitors, LG Chem aims to latch onto Australia’s battery “retrofit market”, with a particular eye to the hundreds of thousands of solar households in South Australia, Victoria and NSW coming off premium solar tariffs in coming months.
“They will get a lot of bill shock coming from January 1,” said Jamie Allen, LG Chem’s business development manager in Australia. “This partnership is really going to suit those customers.”
But the competition will be stiff, particularly from Tesla’s rather sensational new lithium-ion offering – the 14kWh Powerwall 2, which is now open for order on the Australian market at twice the capacity and half the price (per kWh) of the original Powerwall.
Added to this, the new Powerwall also comes with Tesla’s own in-built inverter, which has had the effect of both further cutting costs for consumers, and cutting into business for companies like SMA, whose Sunny Boy inverters had been paired with the Powerwall 1.
Interestingly, as this article (and the below table) by Solar Quotes’ Finn Peacock shows, the two battery brands were neck and neck on price as recently as April – when the original Powerwall and RESU6.4EX both had a capacity of 6.4kWh.
“Both batteries are about the same price, give or take $500,” Peacock wrote at the time. “Both warrant a similar amount of energy give or take 1,200kWh over 10 years.”
At that time, Peacock favoured the LG Chem for its more consistent warranted energy than the Powerwall, which he said would make it easier to predict savings. He also claimed the LG was “definitely easier” to install and to get a hold of, for consumers.
The Powerwall, meanwhile, had the benefit of being more tolerant of extreme Australian temperatures, while the LG Chem would cut out automatically at 40ºC and potentially compromised at above 50°C.
Another interesting detail the April article points out is that the installed price of the LG Chem would be lower than the Powerwall 1 because it was compatible with a wider variety of cheaper hybrid inverters, while the Powerwall, initially, only worked with a couple of high-end brands. But this would change, Peacock noted, when the ~$1,500 SMA Sunny Boy Storage battery inverter was released.
And in July, One Step Off The Grid credited LG Chem with doing its bit to bring down costs at the top end of the battery storage market, with its 6.4kWh offering approaching the key $1,000/kWh mark.
One Step Off The Grid made efforts to ask LG Chem what the RESU-Sunny Boy package would be retailing for, among other things, but had not heard back by the time of publication. A cursory look around retailer websites finds the LG RESU 10H to be available for between $8,600 to $9,295.00 – but these prices don’t appear to include either an inverter, or installation costs. The price of SMA’s Sunny Boy 2.5 inverter sits at around $1,500.
According to one online offer, a customer could get 6kW of high-end solar panels, with Sunny Boy 2.5 inverter, 5kW SMA inverter and LG Chem RESU10H for $18,443.83. This compares to $16,500 – the price quoted to One Step for 3kW of PV and one Tesla Powerwall 2.
So how will LG Chem compete Tesla on price?
“We and other battery manufacturers are going to have to compete by reducing our costs,” Allen told the AFR in an interview.
He has forecast cost reductions of 10-15 per cent a year as his company and other manufacturers adjust to the Tesla effect, which as Bruce Mountain wrote here has made the cost of solar and storage cheaper than solar plus grid power in some parts of Australia.
Either way, Allen says, batteries are hurtling towards that five-year return on investment “trigger point” that put a rocket under rooftop solar in Australia not so long ago.
Other notable specs of the RESU10H, according to SolarChoice, include a 10 year performance warranty; end of life retained capacity of 60 per cent – meaning that by the end of 10 years you should expect the battery to be able to store no less than 60 per cent of of what it did at the beginning of its life; and a cycle life of 6,000 cycles, which effectively means that they can be charged/discharged more than once per day to take advantage of possible tariff structure benefits.
Those who are interested can also see how the 6.4kWh version of LG Chem’s RESU battery is performing at the ITP Renewables Battery Test Centre here.