Sizing Up the Residential Energy Storage Opportunity
When considering present opportunities in the residential energy storage market, we need to ask ourselves two things: 1. Is it viable and 2. Is it adoptable; perhaps not in that order, though. Residential energy storage viability has a lot of aspects to it, both in categories and to whom it applies. There’s financial viability and functional viability to name the top two, and the players range from technology mind smiths to manufacturers to retailers (likely to be utilities or utility/producer partnerships, and power purchasing agreement providers) to end-users whose sense of viability is the foundation of adoptability. With adoptability, what we’re looking at is the public’s current and potential willingness to embrace the technology, not to mention prospective sellers’ interpretation of this market segment’s interest level, which could prompt or discourage them to get the word and product out there.
Putting aside industry-wide speculation and the assumptions of the interested public (that energy storage is simply the key to all our energy problems), let’s look at some direct applications that show us where community and residential energy storage (CRES) is succeeding right now and how it spotlights growth potential.
Earlier this month, we saw Panasonic Corp. beginning mass-production of a compact lithium-ion (Li-ion) battery storage system for the European residential market. This kilowatt scale battery production comes in addition to the company’s recent move to increase investing in development of large-scale energy storage, namely with a largely publicized partnership with Siemens. Answering the question “Why now?” we can address both questions of viability and adoptability in the market.
In countries across Europe, motivated to reduce energy costs and by increasing government pricing incentives, there is a greater and growing movement among residents to adopt rooftop solar. Panasonic is simply pursuing an opportunity in the market to provide complementary technology to home PV adopters, particularly after piloting a successful program in partnership with the German engineering firm E3/DC to install battery storage systems in households in Germany (Panasonic supplied the Li-ion batteries for E3/DC’s systems). Here, market opportunity is demonstrated in consumers’ investments in both on-site renewable technology and the complementary storage tech that optimizes their investments.
In Korea, $64.5 billion of cleantech monies are being invested between 2009 and 2013 on Jeju Island in what is expected to become the world’s largest Smart Grid community. The investment naturally includes advanced CRES technologies, research and development to greater innovate solutions, and concentrated development of business models needed to help make energy storage successful in small-scale markets.
On this side of the pond, there have been a number of programs piloted to test and then scale residential battery energy storage adoption in recent months. Late last year, the California Utility Commission awarded $14.6 million to CRES research and development, including $1.8M to residential photovoltaic company SolarCity to research the feasibility of storing electricity generated by rooftop solar arrays in batteries provided by Tesla. Similar research and community pilot programs have sprung up across the U.S.
Taking a look at how a CRES system works (indeed how residential battery systems work in general) we can speak to the question of functional viability – of course they work, and well. The battery management system (BMS) controls charge and discharge of the energy stored in the battery depending on the resident’s needs per their power usage. Here’s the quick 1 – 2 of domestic energy storage charge/discharge function:
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