The release of the Tesla battery storage concept at the end of April has certainly changed the discourse around battery storage, and caused some to rethink their energy business models. And it appears it is already having an impact on prices in the nascent Australian battery storage market.
Two wholesale pricing announcements have caught the eye in recent weeks. One is the pricing on the 7.2kWh Legato product from AU Optronics that AGL Energy is making available to consumers in Queensland this month.
According to wholesale pricing offers, the 7.2kWh system is being offered at around $A14,000. The significance of this? At around $A2,020/kWh, it is down by more than one-third of the price offered for similar battery storage applications just six months ago. The average pricing last November had been around $A3,200/kWh.
That experience is repeated in the latest pricing news from solar wholesaler and distributor Solar Juice, which is offering a 3.6kWh Samsung battery storage product, with inverters and smart meters, for $AS7,999.
Andrew Burgess, co-founder and director of Solar Juice, says the pricing came down 30 per cent during negotiations, which had lasted six months. “The roadmap is for reduction of 25 per cent per annum moving forward for the short term. Exciting times.”
Hugh Bromley, from research firm Bloomberg New Energy Finance, says Tesla has effectively brought forward the pricing of battery storage by anything from 5 to 7 years.
Asian firms can compete with the proposed Tesla battery storage product on price, it’s just that they will likely have to forgo their planned recouping of R&D expenses in the next few years.
This graph below illustrates how the Tesla pricing has changed the pricing estimates of battery storage. On the left is the Tesla battery system, plus inverter costs and balance of system and installation costs.
Immediately to the right is the result of BNEF’s pre-Tesla price check (in US and Australian dollars), and further to the right is its (pre-Tesla) pricing estimates for the next five-year blocks.
Basically, BNEF says Tesla has effected a price cut of around 50 per cent in $A terms. For the other manufacturers to match that, they will have to sacrifice attempts to get “R&D payback” in the first years of deployment. Like companies associated with Tesla founder Elon Musk companies, be it with Tesla or Solar City, they will have to play the long game and look to get their R&D payback over time via the mass market.
The payback period for consumers, illustrated below, is interesting because, although it should be noted that this is based on “pre-Tesla” pricing, it’s also important to note that it is an average, and will depend on other factors such as the size of export tariffs.
Other estimates have pointed to payback period as low as six years in some states, depending on the tariff and battery size. But that accounts for post-Tesla pricing. This graph does underline the point that the bigger the battery storage installed, the longer the payback period, although the difference is virtually obscured by 2030.
This last graph is interesting to note because it puts the Australian market in some global context. While Australia is considered to be one of the key markets in the world, it is not because of its size, but because its growth is likely to be “organic” and not subsidised – although tariff structures will have an influence.
In fact, Australia does not even rate in the top 10 battery storage countries in the world by volume, by 2020, based on this. Mostly this is because other countries have created specific targets and incentives to accelerate the roll-out of battery storage, particularly those with high renewable energy penetrations.
According to BNEF, Australia is likely to have around 104MW of capacity, or 256MWh, of battery storage by 2020. This is expected to be split evenly between behind-the-meter users such as households and businesses, and “end-users” such as network operators.
This article was first published at RenewEconomy.
Giles Parkinson is founder and editor of One Step Off The Grid, and also edits and founded Renew Economy and The Driven. He has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.
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I so want to comment on this however I have a problem
please Giles give us Australian prices for back up battery offers
other than the first one you give which is $14550 for 7.2 KwH.
Not exactly a very good system
Please set it out on 2 figures the amount of demand power and total power supply.
As you very well know there is no use having a backup system that has a demand ability of 2kw if the demand is 4kw so my feelings are we need a backup system that is able to cope with at least 3 to 4 kw of demand and 8 to 12 of Kwh supply
Yes. When possible, give us KW and KWH.
And don’t get confused and use the wrong one or we’ll have to apply some neurons to straighten it out! 🙂
We only need the kWh figure.
I’ll try to help a bit here: The Samsung can export at 4.6kW continuous, but the battery may only have a max of 2.2kW drawn from it whether 1.exporting or 2.delivering power in island-mode (ie to the house in a power-cut). Eg, if the house happens to have a 4.6kW load, and the array can only deliver 2.4kW, then the other 2.2kW comes from the battery. If the array drops further, then the power will be drawn from the mains to make up the difference.
The 2.88kWh of the battery will go up and down during daylight to minimise export and import from mains, and of course will discharge in the evening.
Legato information is scant; at this stage one can only assume the operation is same. But does a 4.5kW array mean it matches a 4.5kW max PV rating of the inverter? If so, then the inverter appears to be a nominal 3kW. The usable kWh capacities are as my post below.
Using the legato prices that gives $1,158 per kWh and $6,203 for balance of system with an R-squared of 0.99998.
I figure that’s our starting point.
Using the same BoS number for the Samsung gives $721/kWh a 38% saving.
Seems like there’s plenty of room for movement to come.
These are wholesale prices – installed retail prices are higher. Both the Samsung and Legato are capable of exporting in their own right – ie if used as a retrofit, you would most likely remove your existing grid-inverter.
Usable capacities would be: 5.76, 3.84 and 1.92kWh for the Legato; and 2.88kWh for the Samsung. All assuming 80% is cyclically discharged (DoD).
Both units appear to be able to supply appliances directly in a power-cut, but both units have *small* inverters for direct drive of appliances (ie around 2kW), and should be installed such that only the fridge and some lights are connected, to avoid overload and possible damage.
In a nation of lifters and leaners, we should aim to be the lifters in the RE and sustainability area. I still feel that DIY (professional installed?) offers far better value than these offerings. For $14K, it is reasonable to install a capable off-grid battery and inverter that can easily supply the needs of an average household.
Today, I priced a 32kwh LiFePO4 battery with 10kW single phase off-grid inverter + AC changeover switch and it came to $24,000 AUD. I have see 9 year old cells of this type in a vehicle battery, so expect them to last at least 10 years in a stationary application. ($750/kwh)
A viable alternative is lead acid. I was surprised how well this 100 year old technology compares to Li-ion:
If using Lead acid, more capacity is needed to allow for a low daily depth of discharge to promote a long battery life. Here, I am assuming 40kwh of battery and a 7.5kwh average night discharge, which should see the battery last 10 years. This type of battery will tolerate occasional deep (80%) discharges, provided they only occur a few times per year. Efficiency-wise, lead acid isn’t as good as Li-ion, so some additional PV is required to allow for this, say an extra 10% of PV panels.
A cost-effective solution is the Trojan T105RE wet cell battery. For a capacity of 40kwh, 30 units would be required at a retail price of $258 ea, or a total battery cost of $7,740, delivered to capital cities. This would make the total 10kW off-grid system cost nearer to $14,000, but a ventilated battery shed is required. Estimated per kwh cost is price nearer to $425, assuming it is de-rated as 32kwh.
Another 100 year old technology is Nickel-Iron. While expensive ($850 per kwh), it will run for 40+ years! It is not as efficient as big lead acid, but the overall life costs are similar or less. Also, NiFe is *very* tolerant to abuse. It has been possible to restore 85 year old Edison cells (handled by Edison himself?) to a functional state!
I have a 20kwh Li-ion (LiFePO4) stationary battery installed at home, it is capable of running an average household, but won’t always charge the electric car overnight if the weather has been cloudy 🙁
I suggested a 10kw inverter so that toaster+hotplate+kettle+(other loads) doesn’t cause a blackout.
DIY only good if you are skilled in electrical/electronics, otherwise safety issues could damage property, or worse, a person.
Wet cells and NiFe both have dangerous acids and require legislated safety precautions.
These systems seem very costly compared to the Powerwall.
Powerwall is still effectively ‘vaporware’. The above systems plug into the mains directly – the Powerwall doesn’t. The PW requires an existing grid-inverter, which is partly why it appears cheaper.
$10,000 cheaper.