Battery storage: Is Australia on track to be the world's biggest market?


Australian homeowners are continuing to demonstrate that they are hungry innovators when it comes to adopting solar storage. Our solar owners aren’t waiting for some hypothetical, high level, unfunded innovation policy to kick in – they’re off and running.
A new report released by industry analysts Sunwiz has recently updated the estimates of installed solar storage in Australia and the huge news is our market and installed capacity grew by more than 13 times in 2016 to 6,750 systems for the year.
Just under seven thousand systems may not sound like a lot but when you consider there were less than 500 systems installed the previous year, you start to realise that the growth is astounding. More so, considering there were 250 working days in 2016, it means that collectively there were 27 storage systems per day being installed Australia wide.
Put another way, 3.3 solar storage systems were installed per working hour in 2016.
As a bench mark it should be noted that Germany, which has some generous incentives for solar storage and a more sophisticated energy market installed just over 19,000 systems in 2015. So, all in all 7,000 systems in a less mature, brand new market is pretty damn huge.
Updating previous forecasts
What’s even more fascinating is that we are just at the beginning of the growth path that everyone has been predicting. Solar storage is rapidly becoming an economic no-brainer, but remains challenging in pure financial terms compared to solar on its own.
With each passing day, the economics, features, functions and value of solar storage just gets better.
In early 2015 I first published a public estimate for solar storage uptake (2016) where I predicted that 9,850 systems would be installed. Looking back at 2016 it is clear that several key things didn’t pan out the way we expected them to (see below).
Then, in 2016, I published some details of a survey on solar storage uptake which implied that as many as 30,000 solar storage systems might have been installed. However, I assumed that this was a problem with the survey and wound it back to an updated level of 7,700 solar storage systems expected in 2016.
So, all in all what this shows is that there clearly is pent up demand but that it is fickle and can be heavily influenced one way or the other by all manner of events.
What happened?
Firstly, the supply chain was caught out and just didn’t get the timing right on product availability in 2016. Understandably they were nervous about how much product was really going to be paid for, so they took a cautious approach. Secondly a number of products were simply delayed in reaching the market from a development point of view.
Thirdly, there was the Powerwall factor. Tesla made solar storage a household name with its astounding price point which was awesome. However, they also caused a huge number of potential buyers to sit on their hands waiting until it was available and caused huge confusion with their pricing – which wasn’t as cheap as first hyped.
Fourth, solar storage systems require inverters and monitoring systems and there remains a very small number of products which can fill every application. It’s still, arguably, a bit clunky piecing together all the equipment required.
Fifth, designing and installing solar storage systems is not easy – in fact, doing it properly can be extremely complex. The industry was rife with complaints about software bugs, complicated installation requirements and a lack of standards.
Lastly, the rush of NSW solar customers that was the main driver of the expected growth – and it simply didn’t happen. Why? Several reasons.
Firstly, the changes to metering arrangements in NSW were a complete debacle, confusing consumers. The NSW State Government were very late coming out with their new regulations which prevented everyone involved from getting rolling and created a bit of a mess.  Ultimately, several (but not all) retailers came up with free meter deals late in the year which meant there was an instant backlog of both hardware and installation times. So, many customers simply didn’t swap and this delayed their decision making on upgrades including storage.
What next?
Sunwiz have forecast installations of around 20,000 solar storage systems in 2017. Based on the preceding commentary, this sounds entirely plausible and could well catapult us to the position of largest storage market in the world.
It’s worth noting that so far, with a small number of exceptions the majority of installed solar storage has been privately funded by Australian home owners and has been unsubsidised by State or Federal bodies.
There have been small pilot schemes by network companies and in fairness, ARENA and AGL are running a subsidised program in South Australia for 1000 systems and the ACT Government has supported two trials for 800 homes, with more planned.  There is frequent talk about solar storage at a Governmental level but a lack of co-ordinated support mechanisms and in some places, regulatory barriers that continue to prevent homeowners from installing storage or realising the full value.
So how do we speed it up?
It goes without saying that a tangible and co-ordinated program run by Government would make a huge difference.  Regulatory barriers need to be removed and replaced with simple effective polices that enable rather than hobble consumers. And if our leaders really want to see growth, they could of course consider offering incentives.
The product manufacturers are doing their bit – relentlessly driving down prices, releasing new models and creating huge choice for buyers. We’ve seen a number of world class solar storage installations take place right here, breaking new ground in the size and way storage can be used.
Solar installers are rapidly learning too and I reckon they are poised and ready to ramp up in the majority of cases. In our declining and ferociously competitive residential solar market, new storage sales could actually help to kick start a lot of businesses that are struggling.
The design process is getting easier too. There are a number of design tools and battery estimators available this year, which weren’t in the market in 2016.  I also know from personal experience that a lot of solar owners installed monitoring systems so that they can accurately measure exactly what their needs are.
So, if 2016 was the learning year, 2017 could well be the year of consolidated sales when it comes to solar storage. Installers have attended training, learned lessons and developed their skills. Sales companies have tested theories, sold their first batches of systems and are watching the results. Solar owners who installed solar storage are living with the outcomes and telling their friends.
We now have around 52GWh of solar storage installed – an incredible result. By the end of this year we could have almost 200GWh installed – a profound result.
To speed this growth curve up we need consistency, intelligent analysis of the results and then simple hard work. Australian businesses and solar owners may well be innovating their way to creating the world’s largest solar storage market – it would be nice to think that the government might get behind them in this exciting, all-new market especially given the society wide benefits that flow on.

Nigel Morris is the Business Development Director for Solar Analytics. Republished with permission.


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