Grid parity? Far less of a big deal than the PV sector might have thought. For Parag Bhamre, a consultant at EuPD Research, the "magic day" when residential panels can compete with the grid will pass without fireworks.
“When we take the literal definition of grid parity for PV, nothing is going to change,' he says. 'No customer looks at PV and calculates the levelised cost of energy - the average customer couldn't do that.”
The next bit, though, is where it gets interesting. While residents may not register when 'both points are equal', they will spot when the cost of grid electricity overhauls their revenue from feed-in tariffs (FiTs). “When we reach that point, the timing for storage will be right,” says Bhamre. And, in his view, we could be fairly close. By 2014-2015, a “considerable market” will be building up, he says.
EuPD Research's forecasts rest on a model for residential PV's development in which the sector undergoes a comprehensive transformation to enter a new era: PV 2.0, in the firm's terminology.
According to EuPD, residential PV in Europe has already witnessed two cycles of growth within the “PV 1.0” era. In the first cycle, the sector was propelled by 'environmental idealists', who can take credit for kickstarting installations in 2007 and 2008. In the second cycle, “straight-edge investors” became the engine of growth. Drawn to the sector purely by attractive returns from FiTs, these have driven surging new capacity over the last few years.
Now, as PV's appeal to investors wanes in line with sliding FiTs, the cost of its electricity is also poised to drop, ushering in the third cycle: “Green electricity generation in an open market”.
In this “post-grid parity” market, EuPD expects the essential structure of PV systems to be transformed. At the peak of the second growth cycle, residential PV systems tended to feed all their power into the grid. In Germany, though, 90 percent of new systems are already engineered for self-consumption. From now on, existing and new systems are likely to feature storage.
“It makes sense,” says Bhamre. “It's about saving electricity costs rather than making money with a FiT. If, with hypothetical numbers, for each unit you feed to the grid you receive €0.20 but to buy one unit from the grid you pay €0.25, you'd rather use the electricity you have on top of your house.”
A desire for autonomy and a sense of environmental responsibility emerge from surveys as other factors that will speed development, in Germany at least. “People will go for storage even if it's a little more expensive,” says Bhamre.
The commercial world is clearly thinking along similar lines. Storage has provided the dominant theme at a number of major renewable energy trade shows in 2012.
Phono Solar Technology Co, a Chinese state-owned solar panel maker, recently showcased its Enercube for residential energy storage and management. With a storage capacity ranging from 6.4 kWh to 9 kWh, it features an energy management system to help households alter consumption as well as “time shift” their demand.
Several other PV players have announced initiatives to enter storage. For PV manufacturers, in fact, the plunge in panel prices raises interest in downstream technology such as storage. Trina Solar's announcement of a collaboration with Germany's E3/DC - a supplier of car charge and home storage systems - stressed that the project would strengthen the company's position as “provider of solar energy solutions”.
Lithium-ion based storage solutions are set to emerge from Trina's tie-up from mid-2013. Initially targeted at early adopters in Germany and Switzerland, the storage solutions would be marketed independently from PV.
Hanwha SolarOne aims to be on the market earlier with a bundled product developed with Silent Power, a U.S.-based specialist in distributed energy storage systems for the renewable energy and backup power markets.
Under a partnership announced on 9 July 2012, Korea's Hanwha Group has invested $8 million in Silent Power. A co-marketing strategy will feature the storage specialist's OnDemand Energy Appliance, a “battery-agnostic” device - suited for lithium-ion, sealed lead-acid and advanced lead-acid battery packs - that can store excess energy produced during times of peak production.
Not that battery makers need solar firms to point out the opportunity. In recent weeks, Panasonic has already targeted German homes with long-life lithium-ion battery systems that could plug the looming gap between FiTs and grid power. The 1.35 kWh module has an estimated lifetime of 5000 load cycles at 80 percent depth of discharge (DOD).
Panasonic had earlier partnered with German firms to develop the E3/DC power management and storage system, which went on sale this year. The system has a usable capacity of 4.05 - 8.10 kWh and a maximum power output of 4 kW, suited to the needs of an average German household.
Under the Franco-German Sol-Ion research project, scientists at Baden-Württemberg's Center for Solar Energy and Hydrogen Research (ZSW) in Stuttgart have also been testing a storage system about the size of a standard household freezer over six months.
The Sol-Ion contains the power inverters needed for the solar array as well as a battery charge rectifier, both with a nominal output of 5 kW. Lithium-ion batteries with a capacity of 6 kWh provided the centerpiece for the system, which was fed by a 5.1 kW array.
Outside Europe, Japan has provided another test bed for solar storage systems. A system from Kyocera integrates solar panels, an inverter and monitoring software with lithium-ion storage and inverter from Nichicon Corp. A 7.1 kWh battery unit weighing about 200 kg features lithium-ion cells from Samsung.
Getting to Market
Pilot projects and early installations suggest that PV storage systems can indeed work as planned. A case study from EuPD Research concludes that a German family of four with a 5 kW system could raise the proportion of their needs served by their PV panels from 25 percent up to 58 percent by integrating a 5 kWh battery in the system.
Yet costs remain prohibitive. Ben Hill, president of Trina Solar Europe, estimates that the cost of adding storage to a residential PV installation could near $10,000, doubling the cost of the system. His estimates chime with EuPD estimates for prices of about €9500 for a 9 kWh lead-acid battery system or €13,000 for an equivalent system based on lithium-ion batteries - prices for either route that far outweigh any savings on grid electricity.
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