Solar expert says let them lease batteries, not own them

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Too much responsibility comes with an energy storage system for consumers to be burdened with the ownership, writes Rob Campbell of Vulcan Energy. Leasing is the way to go.

Despite the high cost, early adopters are paving the way for an ever-increasing up-take of domestic battery storage. But what’s the best ownership model for Ma and Pa Kettle? They are not tech savvy and simply want a degree of independence and return on investment.

Way back in 2009, when domestic solar PV was experiencing exponential growth across the country, resistance started to emerge from electricity distributors. Voltage rise due to high PV penetration was causing headaches for distributors and limiting exports in some areas, like having two taps joined by a hose, if that hose didn’t leak there was a stand-off. Customers, keen to invest and latch on to the high feed-in tariffs, were ideal candidates for a time-shifting storage system, one that would permit connection to a crowded network and earn an income.

It was about that time that we started developing the Sun Sink storage system. With the demise of high solar bonus schemes, the project deployment was delayed, but the research and development continued, as is does today. The result is a highly engineered and state-of-the-art storage system.

Coming from a grid background, we looked at the most efficient round trip design, settling on a high voltage, low current model. Because it was already accepted that DC voltages of up to 600 were tied to solar PV, a storage system close to that level was chosen. The first thing that had to be considered was safety, so we looked at the government’s tolerance levels and weighed up the risks versus the efficiency and life span of our concept and all of the answers crystallized in quick succession.

The challenges are:

Fire risk Lithium was getting a bad rap for catching fire, except for LifePO4, which was the stand-out for stability and safety, albeit with a slightly lower energy density.

Explosion risk All of the standards available focused upon high current/low voltage storage, by using the opposite rationale, we eliminated gas and heat sources from the equation.

Arcing High voltage DC doesn’t forgive, so particular design constraints had to eliminate potential for arcing to occur. If it did, damage and propagation had to be curtailed.

Electric shock In a domestic situation, the potential dangers of prying fingers were identified as a possible deal breaker, however with this model shocks and burns are a negligible risk.

Life cycle and end-of-life Environmental considerations about what happens when the storage core dies. This is going to become a major headache in the future.

We found the best solution is a managed lease ownership model. By leasing the storage core to the customer, many benefits to the customer, networks and regulators came to the fore and this is likely to become the model for residential storage moving forward. The benefits of maintaining ownership of the storage core are:

Safety Customers are restricted from accessing any internal components of the system; they simply know if the system is working in or in a fault condition. Like a cable TV box. All external connections appear at the PV system, which has proved by experience to be low risk.

Accountability Distributors and regulators have one point of reference for many installed systems, with the potential for demand response deals to be negotiated en masse for mutual benefits.

Warranty and life cycle The customer gains the equivalent of a lifetime warranty, they don’t end up with a boat anchor after six years with all of the potential costs and hazards of deconstructed, dead storage systems.

Environmental Because storage cores are recovered and replaced via a centralized and overarching system, environmental risks are eliminated.

Cost With low up-front and on-going service costs, which include periodic replacement of the storage media, the overall cost is far less that outright purchase, with a 10-year indicative cost per KWh under 30 cents.

There are 140,000 odd customers coming off the 60 cent bonus tariff in NSW, and considering that more than half of these people got their systems installed for next to nothing, the likelihood of these punters putting their hands in their pockets to invest $10,000 or $12,000 in storage for a return of 10% is not great.

The only way to ensure that our energy system becomes democratized and truly competitive is by the introduction of live supply and demand price signals and regimes for electricity. Only then will storage reach its full potential, and will provide the same cost saving opportunities for those who are not able to access solar PV energy in their own domestic situation.

Rob Campbell is Managing Director of Vulcan Energy.