As 2017 ticks over into its second month, Australian solar and battery installers are predicting a “very, very exciting year” as the home energy storage market shifts from early adopter, to “early majority”.
Driving this shift is the sensational downward price trajectory of home battery systems, which in little more than a year has seen them go from an “emotional investment” to an economic no-brainer.
This price drop, while mostly driven by economies of scale in manufacturing – which have, in turn, been buoyed by ripe markets like Australia with high electricity prices, abundant solar rooftops and disappearing solar bonus schemes – has also been boosted by a healthy rivalry between market leaders like LG Chem and Tesla.
Tesla, whose Powerwall 2 battery is reportedly due to hit Australian shores in a matter of weeks, and almost certainly in the first quarter of 2017 according to one industry source, has been a major pace setter on pricing, having essentially doubled he capacity of its home battery offering, while halving its price per kilowatt-hour, and reducing its physical size by one-third – all in less than 12 months.
The US EV maker has two Powerwall 2 energy storage units on offer to Australian residential customers: both 14kWh; one an AC version and one a DC, fully integrated model that can work in island mode, continuing to deliver stored solar energy to the home if the grid goes down.
According to Chris Williams of Natural Solar – a certified Australian Tesla reseller – adding a Powerwall to an existing solar system will cost around $10,000, while the DC fully integrated system starts at $15,000 with solar panels included.
LG Chem, meanwhile, is keeping up appearances as the Australian distributed battery market leader with deals surfacing that offer its 6.4kWh battery plus inverter and energy monitoring system for just under $5,900.
That’s a pretty impressive discount on prices from as recently as April last year, when the LG Chem Resu 6.4EX battery alone retailed for $7,500. And a pretty good option for those tens of thousands of existing solar homes coming off the premium feed-in tariff.
As we reported in November 2016, South Korea’s LG Chem also offers Australian households a 9.8kWh lithium-ion battery, available in Australia since December 2016, in a joint deal with SMA that includes SMA’s Sunny Boy Storage 2.5 battery inverter.
And of course, there is plenty of other competition in the market, including from Enphase, Sonnenbatterie and Redflow, to name but a few. Most recently, German company Senec-IES added its name to the mix, with its first shipment of HOME Li Home Energy Storage Systems arriving in Australia last week.
But as Natural Solar’s Wililams told One Step Off The Grid in an interview on Tuesday, it’s not just the battery prices and product offerings that are evolving so rapidly, but the market itself.
“This year is going to be really, really exciting,” Williams said. “What we’ve identified is that the market has really adjusted from an early adopter market to an early majority market, a mum and dad market, it’s a different target market now.
“The pricing per kWh around the market certainly has come down, but at the same time we’ve seen the price of electricity go up and customers come off premium tariff schemes. So the value proposition for batteries has changed.”
Williams says that for his company, Tesla’s Powerwall is leading the pack in terms of customer inquiries, with the first shipment of its 14kWh Powerwall 2 units expected to arrive sometime in Q1, and possibly within the next few weeks.
“I can tell you that the pre-orders for the Powerwall 2 are currently at more than three times the pre-orders we got for the Powerwall 1, at the same stage of delivery.”
As well as being double the capacity, the Powerwall 2 is also 30 per cent smaller in size, he says, making it more attractive to home owners at the same time as they become more familiar with the product and more confident about investing in it.
But the bottom line, says Williams, and the most exciting market development of all, is that “it now makes financial sense to get a home energy system.
“Now, customers who do the sums and work out the return on investment… go ahead based on financials.”
This article was originally published on RE sister site One Step Off The Grid. To sign up for the weekly newsletter, click here.