ANALYSIS: Behind the storage hype

Storage systems for PV were the subject of some serious hype at this year’s Intersolar trade event, which ends today.

Major PV module manufacturers were marketing them aggressively in Munich this week. Developers such as Juwi say interest in their new storage system has soared since Germany introduced a moderate subsidy scheme for the technology in May.

And even electric utilities such as RWE that still depend heavily on coal offer their clients PV storage solutions.

It seems as if the battered PV industry is hopeful that storage will become the new sales star after cuts to renewables support mechanisms, the bitter dispute over anti-dumping tariffs against Chinese PV kit, and global overcapacities have soured the module market.

But caution is warranted.  PV storage systems are still prohibitively expensive for most consumers across the globe.

Even factoring in Germany’s new subsidy of €660 per kW ($868/kW) of storage capacity, it would take a four-person household 15 to 17 years to break even on its investment in a storage system fit for a 4kW PV installation, according to the rough calculation of a Juwi marketing official.

The 8kW storage unit needed to accompany a PV unit of that size sells at a hefty €15,000, installation costs excluded.

The Juwi official also didn’t expect any substantial fall in prices for lithium-ion phosphate systems in the near future, and admitted that the product is not aimed at people looking for profits – but rather for idealists striving to protect the climate for their children.

A Conergy executive reckons PV storage units can pay off within a 20-year horizon, but admits that this is only the case for smaller systems that are “optimised” in conjunction with the PV unit.

“If you compare a PV plant with or without storage, out of an economical consideration you would need to at first only buy the installation without storage,” he said, adding that the technology is a “lifestyle” option for enthusiasts seeking self-sufficiency from electric utilities.

Further upward price pressure could arise if demand were to jump, making the already competitive global market for battery raw-materials such as lithium even tighter.

Simply considering the price angle makes PV storage look destined to become a niche product.

But history has shown that initially sky-high prices can fall once a mass market emerges, and the development of new technologies gets spurred by initial support schemes.

PV was prohibitively expensive until just a few years ago, but helped by Germany’s visionary support schemes, prices tumbled and solar power now accounts for a staggering 10% of electricity consumed in Bavaria, the state that hosts the Intersolar show each year.

That example may explain some of the PV storage hype at the trade fair this week.