Selling Storage What you need to know …. Dr Christian N Jardine Technical Director, Joju Solar and Senior Researcher, Environmental Change Institute, University of Oxford

Residential Niches Commercial Rates of return Self-utilisation Discharge Motivations Niches Retrofit, solar+storage Social housing New builds Commercial High load factors Other operational modes

Lets be honest about battery market Huge interest in storage at present The Tesla Effect 2015 – 500 domestic batteries nationwide (mainly trials) 2016 – 1000-1500 batteries, new additions are sales But ≈1500 installers offering batteries Massively oversupplied This won’t replace our old solar market But an interesting additional product line

Classic load-shifting (autumn/spring)

Load-shifting (winter)

Load-shifting (summer)

So, broadly 3 modes of operation Spring/Autumn Broadly well balanced Excess generation feeds battery Discharges overnight Winter Not enough excess generation to fill battery A kettle can empty it Won’t last into the evening peak Summer Too much generation! Battery can be full by mid morning You end up exporting anyway Damaging to grid = some smartness needed to control portfolios of batteries All means you can’t have 100% self consumption Clients need better understanding than just the classic model.

Domestic Solar PV rates of return Price 3kW (£) % self consumption 100% self consumption not possible in UK, beware missselling Addition of battery broadly doesn’t change rate of return But both lower than classic ’50% self consumption’ selling

What about discharge? Batteries are brilliant technologies for storing electricity They can soak up excess whenever it is available But less thought given to discharge This is when batteries are really valuable Two broad models at present Self-consumption Peak shaving In future Flexible charge/discharge based on grid-wide fossil generation needed Or other ancillary services

Self-consumption

Peak demand discharge

Market segmentation

It’s all a bit Brexit-y It’s all a bit Remain-y Motivations Self-consumption Peak shaving Use your own generation Discharge when most useful to system Lower utilisation (battery might not empty) High utilisation (battery empties) “use it, or lose it” “help get more renewables” Insular, isolationist Part of a larger system Take back control Be the control! Self-reliance Resilience in networks It’s all a bit Brexit-y It’s all a bit Remain-y Know where you stand This doesn’t work perfectly (yet) (ever?) Would disconnect? Wouldn’t disconnect Ultimately VERY expensive Networks reduce costs

Retrofit or Solar+storage Better economics on solar+storage Needs new customers, but: Clear overall proposition 1 project = 1 lot of project management So, lower overheads 5% VAT Retrofit Good access to customer base, but: You might have sold solar on basis of 50% consumption Poorer economics 20% VAT

Social Housing Council Purchases PV system Council Receives FiT Pays back system Tenant benefits from free electricity used (25%)

Tenant benefits from free electricity used (70%) Social Housing Council Purchases PV system + battery Council Receives FiT Won’t pay back system Tenant benefits from free electricity used (70%)

New Build market Increased interest in batteries for new build But, new build market very CAPEX sensitive Driven by Carbon legislation Often see very small, poorly oriented/designed systems Batteries add CAPEX Batteries do not improve carbon under SAP So no real driver here Other than interest/experimentation

Commercial Storage Higher load factor in commercial buildings Usage better aligned with solar Implies opportunities for storing and shifting excess are lower Low battery utilisation = poor economics

Commercial Storage Need to be cleverer Opportunities Renewable generation time-shifting Night/day time shifting DUoS avoidance, TRIAD avoidance Provision of ancillary services Firm frequency response Enhanced frequency response Short-term operating reserve (STOR) Fast reserve But these need scale to access markets, even via aggregator Probably need more than 1 to give adequate payback Can you offer more than 1 service at once?

Conclusions 100% self-consumption not possible in UK Be clear about what batteries can and can’t do Especially seasonally Better case for new solar+battery systems Beware mis-selling when going back to old customers Different motivations for batteries Social housing & new build look difficult Commercial demands has higher load factor Commercial storage needs other income streams

Thank you for your attention! @DrChrisJardine jojusolar.co.uk