Solar batteries could be utilities’ next headache

|     Christoph Steitz & Stephen Jewkes     |

FRANKFURT/MILAN (Reuters) – Renewable energy is constantly evolving and challenging traditional utilities but one growing sector could make home-generated power much easier to use and cut customers’ dependence on energy companies dramatically – solar batteries.

A major conundrum with solar panels has always been how to keep the lights on when the sun isn’t shining.

Solar batteries allow homes and businesses to store solar power to use in the hours of darkness and can also help to create “smart grids” that react to sudden power swings and free stored energy when needed.

The technology is still expensive and not widely used but with energy bills soaring for consumers, it could quickly gain market share and reduce dependence on utilities, which are already struggling with overcapacity and weak demand.

Michael Greif controls his solar battery memory system ‘IBC SolStore 6.8 Pb’ in the cellar of his home in Coburg March 5. Every new solar panel installed on European rooftops chips away at power utilities’ centralised production model. Unless they reinvent themselves soon, these giants risk becoming the dinosaurs of the energy market. REUTERS

Italy has some of the highest power prices in Europe and is looking at how to cut costs to allow its businesses to compete.

Nicola Cosciani, head of energy storage at Italy’s top industrial battery maker Fiamm, says heavy power users like cement and steel makers are looking at generating and storing their own solar power – and even selling excess power from their batteries on to the grid.

“Germany and Italy will be explosive markets for residential storage and big energy users are also starting to show an interest. This is a game changer,” he told Reuters.

By 2020, the EU aims to get 20 per cent of its energy from renewables. That compares to 12.5 per cent of the EU energy mix in 2010 and 8.1 per cent in 2004, according to most recent EU statistics. Batteries will be crucial in reaching this target.

In Germany, the world’s largest solar market and Europe’s largest energy consumer, about 40 per cent of all modules sold have been installed in homes, directly hitting demand for power from EON and RWE.

A four-person household can cut the amount of power it uses from the grid by 30 per cent per year if it uses solar panels and another 30 per cent if it uses a solar battery, leaving it to buy only 40 per cent of supplies from utilities.

With power bills rising and solar subsidies and battery prices falling, power storage is expected to expand dramatically within the next two to four years.

Solar batteries look like a large car battery and are usually installed in the basement of a house, hooked up to a solar panel outside and on to the grid with an inverter.

That allows the batteries to charge up and store excess energy during the day and release it in the evening. They can also release surplus energy on to the grid.

The kit is still expensive but the price of solar panels has already dropped two thirds in the last two years and the price of batteries is expected to halve in the next few years.

A single solar battery costs about 800 euros per kilowatt hour (kWh), so an average 6kWh battery costs about 5,000 euros ($6,500).

Including installation, tax and components to connect it to the grid, an average household – which consumes 3,500 kWh per year – would pay about 10,000-20,000 euros per storage system.