German battery company sonnen has entered the Australian market, with their sonnenFlat product. I would have written about it earlier, but I’ve been suffering a fairly serious flu that is hitting Australia late this winter.
— Solar Choice (@Solar_Choice) July 7, 2017
On the surface, it looks like a fairly sweet deal. Add a Sonnen battery pack to your existing solar array (or buy that, too), and never pay for electricity consumption again.
In return, sonnen get to use the battery storage as they see fit via the concept of Virtual Power Plant (VPP).
There are a few conditions of course, as this article from Solar Choice’s James Martin II points out. I’d also urge you to also read the comments section as Solar Choice provides further information via responses.
My first impression on seeing the details: this is a mobile phone plan, but for electricity. You pay your $30 a month, use up to the “cap”, and then get charged for excess.
So what are the “gotchas”?
For The Provider
sonnen will make some money on battery retail, first and foremost. The consumer pays for the upfront cost of the battery system, as well as the ongoing payment.
In return, sonnen get a VPP, with which they can play in Australia’s energy market.
This may include direct retail of energy, but I don’t see it, despite their promises to “kill” the traditional energy model.
When the sun goes down there is no generation available to them as a standalone provider, and the battery users they are supplying “free” power to will take most available demand from storage.
Most likely, sonnen will seek a partnership with an existing generator and/or retailer. There is already talk of sonnen investigating agreements with companies like AGL, one of Australia’s largest energy providers.
There is a bit of VPP talk going around in Australia at the moment in general. It is one of the ways in which we’re going to address how we manage the grid into the future.
It is acknowledged that demand growth for traditional grid generation has tapered off due to a few factors. This includes better energy efficiency, and uptake of renewables behind the meter. Departure of some industries like car manufacturing also contribute.
However, the need for smarter demand management is growing, particularly where the consumption profile is changing for consumers and industry.
Simply put: we don’t consume energy the way we did in the past. Terms like “baseload” are swiftly becoming meaningless, and I’d urge you to place limited trust in people who say it is a priority!
"Baseload" is a 19th-century answer to a 21st-century question. https://t.co/HiRQrmvFf5
— Michael Liebreich (@MLiebreich) June 26, 2017
For The Consumer
The obvious advantage is cost savings. By investing in a sonnen system, you can fix the running cost of your household for years, literally.
Paying $360 per annum for electricity would sound like a fairly sweet deal for most, particularly as some consumers have just seen price hikes of up to 20% in Australia.
There is the up front cost that could make the whole conversation moot. Like the arguments around leaving the grid altogether, capital outlay is going to be a deal breaker for a lot of people.
In one of the comment replies in the Solar Choice article, they note that the “cap” includes ALL usage in the house i.e. not just imported electricity. This starts at 7500kWh per annum for the $30 plan.
For the consumer who can afford the investment, and just want a set-and-forget system, that makes a lot of sense. The consumer doesn’t have to micro-manage the system, and maybe has the option of getting a little bit smarter about their usage to try and fit under a lower cap.
One real risk is for those users who sign up thinking its all about “free electricity”. If they don’t look after their consumption, it will start to hit the hip pocket, and quickly lead to consumer regret.
And what if your household doesn’t consume 7500kWh per year? As unlikely as that sounds with 20.5kWh to play with. What sort of plan do you go on?
It is critical to understand your consumption across the year, before deciding which system or plan to sign up to.
Does It Fall (sonnen) Flat?
I’m a consumer who bought a battery without a plan like sonnenFlat behind it. I took some actions to maximise that investment, particularly trying to ensure the house runs lean.
The statistics I’ve compiled bear this out. My consumption figure of ~16kWh / day via the system APIs is lower than the ~21kWh / day I took from my billing data.
The less I consume, the more I can export, which produces direct financial benefit for me. I’d also like to think it lowers my carbon footprint a bit.
This is a secondary problem I see with sonnenFlat: you don’t get any benefit from being smarter or better about your energy consumption. Where is the incentive to use less?
To me its a similar argument to those people who are on-grid, but try to consume 100% of their solar generation. Sure, that’s great if you’ve got a smaller PV system and need to be really smart about your use.
I just don’t see the point in running a device you don’t need to for the sake of using up your solar power. Particularly when you can export it for the benefit of others (and yourself!)
The Good News
I think the concept of sonnenFlat is moving in the right direction in several key areas.
The surety for consumer electricity bills, while not demanding too much of their capacity to understand the system, is great.
The addition of more battery capacity in a VPP adds important ancillary services to the grid. This helps the grid evolve and integrate to these new, smarter services.
It also shifts the discussion about batteries further into the spotlight for the “Mum n Dad” consumer. While the Tesla Powerwall created a spark, it was priced only for early adopters. Powerwall 2 suddenly put the financials into reach.
This type of offering – promoting batteries as a service, not just a device – is an important step for consumer markets. One day, batteries and solar will not be a case of “are you getting one?” but more “which one are you getting?”.
The entire retail model is evolving, to the point where you’ll buy your battery and have a plug-n-play installation. Installing solar is slightly more difficult for the average home owner, of course, but it can happen.
IKEA are already offering shopfront retail in the UK, and it will only spread as retailers see profit in the full suite of service provision.
In the absence of anything resembling progressive Federal government policy, all these elements assist our systems to evolve.
More importantly, they help inform our consumers, who are also our electorate.