The Costs of Energy Storage System Limit the Spread of Consumer Solar

Costs of energy storage system

Recently Australia’s largest electricity retailer Origin Energy made an interesting viewpoint: the business solar market will usher in rapid development, while the consumer solar market would return to growth unless the costs of energy storage system go down.

Phil Mackey, Origin Energy’s head of new energy, gave a presentation last week at the Clean Energy Summit in Sydney. He said the development of business solar will have great potential. Some data reveals the supply of business solar can easily match the demand.

Business solar is the growth segment in the STC market
source: Page 3 from “Growth of business solar 2016” by Origin Energy

According to Origin’s report, business solar now accounts for about 30% of the rooftop solar market, up from 4% in 2013. We can predict the market share of business solar will continue  growing.

The report also points out that the tax subsidies from 2010 to 2013 do trigger consumer solar installation spurt, but later the number of installation gradually reduced. Mackey from Origin doesn’t think the sales of consumer solar systems will pick up until 2020.

What the Costs of Energy Storage System mean?

If the costs of energy storage system do not fall far enough, there would NOT be large-scale market transactions and a new upsurge of private investment in solar energy. To be specific, there is a consensus that the development of energy storage system has just begun. When the energy storage market develop into a large-scale one, the energy storage industry will start to cut prices. Some people predict the price of energy storage system will be reduced by 40% in the next two years. This would become very attractive to the solar energy industry. However, this issue is complicated, for there isn’t enough industrial data to support it. Unlike the solar power system, energy storage system enterprises have not receive any tangible subsidies from governments. So it is difficult to prove the future trend of the energy storage system industry – especially without the support of enough official data.

In the meantime, Origin’s report says the application of rooftop solar in business is significant, many companies have their electricity costs cut by half. As indicated in the graph below.

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The solar PPA is a compelling option for business
source: Page 5 from “Growth of business solar 2016” by Origin Energy

To purchase eletricity from retailer like Origin have many benefits. You can get considerable discounts if you sign a contract of 15-year electricity purchase agreement with it. And the longer the contract period, the more discounts you can get. comment