Residential Energy Storage Economics: Page 4 of 5

Cycles. Battery life depends strongly on usage patterns, as anyone with a cell phone or laptop computer can attest. So a manufacturer might rate a particular battery for 4,000 cycles at a 70% depth of discharge or 3,000 cycles at an 85% depth of discharge. Ideally, system integrators and customers should have access to these data, either in tabular form or in graphs that plot battery cycle life in relation to depth of discharge. In practice, these data are difficult if not impossible to find.

One of the reasons battery cycle ratings are so important is that customers get the most value out of a battery that is the right size for their application. For example, sonnen guarantees all of its sonnenBatterie eco series of energy storage systems for “10,000 cycles or 10 years.” Since daily cycling accounts for only 3,650 cycles over a 10-year period, you would need to cycle these batteries an average of 2.7 times per day to approach 10,000 cycles over the warranty period. To achieve this level of usage, you would likely need to deploy the energy storage system in an application where it provides more than one service, a practice known as application stacking. An example might be an application where you are using an energy storage system for both self-consumption and time-of-use bill management or demand reduction.

Table 3 illustrates the sensitivity of LCOS to the total number of cycles. According to Greg Smith, sonnen’s senior technical trainer, the retail price for a sonnenBatterie eco 6 is roughly $12,000, and installation costs (including relocating circuits to a protected-loads subpanel) are likely to fall in the $1,500–$3,000 range. Using conservative cost assumptions—and ignoring, for the moment, battery capacity losses over 10 years—we can see that the best-case LCOS varies dramatically depending on whether the user is full-cycling the battery once per day ($0.79/kWh at 3,650 cycles) or for maximum usage ($0.29/kWh at 10,000 cycles). While this is an extreme example of how the number of cycles relates to LCOS, this basic relationship holds for all energy storage applications. Anything less than 100% resource utilization drives up the LCOS.

It is worth noting that the best-case LCOS values in Table 3 do not take into account battery capacity losses over the life of the installation. In this case, sonnen does not publish a warranted maximum aggregate discharge value or provide any information about capacity retention over time. A simple way to account for the inevitable effects of battery degradation is to apply a capacity adjustment factor that accounts for battery aging and usage. In this case, sonnen’s warranty guarantees 70% of the original rated capacity after 10 years. If we assume that we reach 70% of capacity in the maximum cycling scenario and that capacity degrades linearly over time, then the average battery capacity over the 10-year period is 83.6%. For the daily-cycling application, we assume 0.5% of battery degradation per year due to aging and 1% due to usage, which works out to a 92.6% adjustment factor. If these assumptions seem overly optimistic or conservative, simply increase or decrease the adjustment factor accordingly.

Efficiency. Charging and discharging a battery incurs an internal cost. If you charge a battery from the grid during off-peak hours and discharge it on peak, you lose some amount of energy along the way. Conversion losses in both the battery and the inverter, as well as voltage drop losses in the conductors and electrical connections, occur during periods of active charging and discharging; the battery even has self-discharge losses when it is doing no work at all. The efficiency value in Equation 1 accounts for the fact that we do not get all of the energy out of a battery that we put into it.

These round-trip efficiency losses are significant in solar-plus-storage systems, especially in comparison to losses in an interactive PV system. Today’s non-isolated string inverters have weighted efficiencies in the 96%–98% range. By comparison, Tesla states that the “beginning of life” round-trip efficiency for its Powerwall is 92.5%. While round-trip efficiency data can be difficult to find—and third-party verified weighted data reflecting real-world scenarios do not exist—these losses depend somewhat on power processing and battery configuration.

SolarEdge and Fronius, for example, offer multiport inverters that work with high-voltage lithium-ion batteries such as Tesla’s Powerwall. In these systems, the PV array and battery both connect to the dc bus of a transformerless inverter, which is very efficient but provides modest surge capacity for motor loads. By contrast, Adara Power and sonnen have designed their energy storage systems around transformer-based inverter platforms (from Schneider Electric and Outback Power, respectively) that use a 48 V nominal battery bank. While these systems are somewhat less efficient, they offer excellent surge ratings for backup loads, which is critical to customers who need to run essential equipment—say, a well pump—during a power outage. To add solar to a sonnenBatterie, integrators must ac-couple an interactive inverter with the battery-based inverter via the ac bus in the backup-loads subpanel. The Adara Power system accommodates both ac- and dc-coupled configurations. The former is most cost-effective in retrofit applications where an existing interactive inverter can process PV power. The latter uses a 600 V Schneider charge controller to integrate the PV power source. SMA, meanwhile, is releasing a new Sunny Boy Storage inverter—designed especially with the retrofit market in mind—that will allow integrators to ac-couple solar with a high-voltage battery.

As the market matures, we will likely see increased demand for something parallel to an Energy Star rating method targeting home energy storage systems. This may be a long time coming in practice, however, based on the slow progress in the multiyear international efforts to develop comparative tests and ratings for PV modules. In the meanwhile, system integrators and developers may want to take vendors’ round-trip efficiency claims with a grain of salt. Self-reported efficiency values are suspect, if only because they likely reflect best-case scenarios. In the real world, inverter loading and battery cycling is highly variable, which could reduce round-trip system efficiency in the field.

Table 4 illustrates the sensitivity of LCOS to round-trip efficiency. In this example, we assume that Adara Power’s energy storage system, warranted for 10 years or 4,000 cycles, costs $11,500 fully installed, and that the PV system bears the cost of the charge controller or inverter processing power from the PV array. According to Adara, the round-trip efficiency of each battery charge and discharge cycle is 98%, which suggests that it has chosen to publish the efficiency value for the battery management system and battery chemistry. After all, the Schneider Electric XW+ 5548, which Adara uses in its systems, has a CEC efficiency rating of 93%. Moreover, the manufacturer-reported efficiency of Schneider Electric’s 600 V charge controller is 96% in a 48 V application. Based on these efficiency ratings, the best-case round-trip efficiency for a dc-coupled Adara Power solar-plus-storage system is roughly 87.5% (0.98 x 0.93 x 0.96). 

To estimate the round-trip efficiency for the ac-coupled configuration, we assumed that the interactive inverter is 96% efficient. We then looked at the battery-based inverter’s charging efficiency, which Schneider Electric describes in detail in its user manual for the XW+ 5548. In comparison to the inverting efficiency curve, the charging efficiency curve has a slightly lower peak value and a more pronounced downward slope. Based on a comparison of these curves, we estimate that the weighted average charging efficiency for the XW+5548 is roughly 91%. So in the ac-coupled solar-plus-storage configuration, we estimate that the round-trip efficiency is closer to 81.2% (0.96 x 0.91 x 0.93), which means the unsubsidized LCOS is about $0.04/kWh more than that for the dc-coupled configuration. While the storage component of a solar-plus-storage system does not automatically qualify for the 30% solar Investment Tax Credit (ITC), the post-ITC LCOS value in Table 4 illustrates the impact of the federal tax credit on qualifying systems.

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