I’ve been attending the Solar Energy show at the NEC for a few years now and some developments in the industry are plain to see:
- The decline in domestic roof top solar PV installations
- The increase in battery storage products
Domestic Rooftop Solar Panel Installation
As a result of the February 2016 Feed In Tariff changes, domestic rooftop installations have dramatically reduced. Comparing Q2/3 2016 with the same period in 2015 using data supplied in the report National Statistics Monthly feed-in tariff commissioned installations data, the market is now a quarter of the size it was in 2015 with around 3,000 installations per month rather than 13,000 per month; delivering 7.2MW of power at peak output compared with 38MW in 2015. The size of the average rooftop installation has also reduced from 3kW in 2015 to 2.4kW in 2016.
This dramatic change has seen a number of domestic installers drift into other market sectors or just go bust. The remaining participants have adjusted their operations to cope with the new FIT regime. Indications are that installation prices have flattened or drifted slightly upwards rather than falling; a consequence of firms having lower volumes with less opportunities for economies of scale and reduced buying power. The industry does not forecast any significant growth in the domestic sector over the next year or so and is looking for other potential opportunities. Storage batteries are one such sector being examined.
Battery Storage Products
For the last few years, battery storage has grown in emphasis at the Solar Energy UK show and this year it appeared to make a step up again in profile with more innovative products on display from more suppliers. The industry is probably at least five years away from being a mainstream product for homeowners on the electricity grid. Whilst commercial storage is likely to take off sooner, domestic battery storage is still a long way from offering consumers a payback on their investment. However, it is interesting to watch a niche market develop into something that could have huge potential by 2025. Suppliers are starting to provide price visibility on the web which demonstrates progress since last year. Better pricing and warranty transparency can only help this sector develop faster; warranty consistency would also help as warranties are currently quoted in various ways (charge cycles and years) by manufacturers and this makes it difficult for a homeowner to compare different products.
Tesla took a high profile at the exhibition, showcasing their electric vehicle as well as their home (Powerwall) and commercial battery storage products. The launch of the Tesla Powerwall earlier this year has brought a strong consumer brand into the market and given the sector more visibility and credibility. They seem to be tackling some of the practical issues around wider take up of battery storage:
- The 6.4kWh Powerwall can be fitted to an outside wall. I was told that about 90% of them were; a useful feature where wall space inside a home is limited.
- The battery is guaranteed to deliver at least 60% of its rated output after 10 years. Whilst a 40% drop does sound a lot it is encouraging for Tesla to make a specific commitment on this. Some manufacturers are coy when talking about battery degradation which helps no-one and makes the industry look a little “vague and shifty”.
- Tesla highlight the VAT implications of installing battery storage. Install it as part of a solar PV system and it attracts 5% VAT. As a stand-alone installation it attracts 20% VAT. The UK Chancellor would do well to tackle this anomaly in the future.
The full installation cost of a 6.4kWh Powerwall, at around £5,500 as a stand-alone installation, is still not close to being financial attractive for most homeowners. It will appeal to those who have no mains electricity or those who want to consume their own generated electricity as a “lifestyle choice”; code for impressing the neighbours with your green and tech credentials whilst losing lots of money. Bring a full install down to under £2,000 and I would consider installing it myself. We should start to see prices progressing downwards over the next year or so.
Powervault have strengthened their offer since last year, with a 3kWh lead acid product with a 5-year warranty which can be installed (stand-alone) for around £3,000. They also have a new 6kWh lithium-ion battery system which is likely to cost around £6,000 installed with a 5 year warrant. Some interesting aspects of Powervault products include:
- Emergency power socket: Allowing access to some power if the grid connection fails. This could be useful to power a broadband router to allow wifi access to be maintained.
- Smart tariff compatible: Potentially allows the unit to be charged when electricity prices are low (e.g. Economy 7). If the electricity supplier offers it then in the future the unit could take advantage of cheap rates to charge itself. The charge would be released to avoid paying peak rates from the grid.
Moixa, formerly known as Maslow, are offering a 2kWh unit for around £3,500 including installation costs and VAT. The unit comes with a 7-year warranty at 80% of rated output. Interesting aspects of Moixa include:
- Moixa Gridshare: The homeowner can earn payments of around £50-£75/ year by allowing the battery to be part of a larger network of batteries linked to the electricity grid. The payments are for allowing the electricity company to use the stored electricity rather than having to start up additional generating capacity to cope with peaks.
I look forward to measuring progress on battery storage when I return to Solar Energy UK in 2017. As well as the show putting more emphasis on its other name, Clean Energy Live, I would expect to see some developments in:
- Lower pricing on battery storage: 6kWh products with domestic installed cost of under £5,000 (inc 20% VAT) for stand-alone systems. Maybe the industry will also have successfully lobied for 5% rather than 20% to be applied to stand alone installations which would speed market development.
- Better warranty transparency and clarity: 10-year warranty as standard with 70% of rated output after 10 years
- Smart tariffs: More visibility on electricity suppliers smart tariff offerings and battery storage charging options
- Gridshare: Developments on payments for adding domestic battery storage to the grid