LG Chem, the South Korean battery storage maker that has so far claimed the biggest share of the nascent Australian market, says that solar and battery storage is already beating grid power in most states.
The assessment by LG Chem follows similar analysis by private energy consultants, and suggests that the market for battery storage could be about to take off, even with looming threats of restrictions.
According to Jamie Allen, the marketing head in Australia for LG Chem, a 5kW rooftop solar system and a 10kWh battery storage device (such as LG Chem’s own 9.8kWh offering) can be purchased and installed for around $15,000.
Based on the assumed output of around 22kWh a day from the solar array, that makes the cost per kWh of solar power at around 22c/kWh over 10 years.
Given that most flat rate per kWh tariffs start at around 23c/kWh or 24c/kWh – even in NSW where there are high fixed network charges on top of that – the solar power is still on the money, although the battery storage is essential to ensure that much of that output is used directly, or stored for later use at night.
Of course, the actual cost per kWh of the solar output would be less than half the 22c/kWh cited here, because the panels would last well beyond 20 years.
But the 10 year time frame is used because that is the warranty period for most battery storage and it is the “combo” package that is being promoted. And without storage, then much of the output would have to be exported, with tariffs in NSW as low as 6c/kWh or non-existent for some.
What does this tell us? Allen says it is that storage is crucial to maximize the value of that solar output. Every kWh that can be consumed on site will beat the cost of production.
Of course, this is not the only benefit. Allen notes that the solar system will likely last at least another decade, possibly two, and the cost of battery storage to replace the current system will also be cheaper, while grid costs are likely to rise.
And, on top of that, the solar and storage system offers other benefits: back-up power for when local or wider blackouts occur, and increasing property values, not to mention the environmental and climate benefits.
So far, LG Chem has found the NSW and Queensland markets to be the strongest for battery storage, with consumers in regional areas, particularly interested because of the potential of batteries as a back up.
“The market is looking very positive,” Allen says. LG Chem, along with other battery storage developers, is watching the roll-out of the new Tesla Powerwall 2 with interest, but is confident its product is competitive.
And while Tesla focuses on proprietary models with in-built inverters, LG Chem is partnering with a range of companies including SMA, Solar Edge, Selectronics, Redback, Sungrow, Goodwie, Ingeteam, and Victron.
But Allen is also worried about moves by regulatory authorities to restrict the installations of battery storage devices, and effectively ban them from homes and garages and require them to be installed in a separate enclosure.
He says LG Chem safety tests have been exhaustive, and more than 30,000 LG Chem residential systems supplied globally with no fire or safety related issues.
A further 500,000 EVs and hybrid vehicles have used the company’s battery cells, again with no fire or safety related issues, and LG Chem lithium products are approved to be shipped via air. Yet Australian authorities want to ban them inside homes.
“That would go far beyond anything else in the world,” Allen says. “It looks like Australia is going to overcook (the regulations), and it will end up costing the consumer more.”