Are Batteries Right for Me?

Smart batteries for homes and businesses are receiving plenty of media attention lately, especially after December 2017, when the world’s largest battery started operating in South Australia. Batteries also promise to be an excellent complement for commercial Solar power, since they have a similar modular design and scale flexibility, while allowing the use of stored energy at night. However, depending on a building’s energy consumption profile, batteries may or may not be the best option from the financial standpoint. If you are wondering if batteries make sense for your property, this article will give you a general idea.

What Makes Batteries Work from a Financial Perspective?

Since Australian energy retailers charge some of the highest kilowatt-hour prices in the world, generating electricity with a commercial solar array is almost always a better option. However, solar panels only produce their full output for a few hours each day, while buildings consume electricity day and night. One solution is to size the solar PV system larger, and use batteries to store surplus production for hours when you would normally rely on the power network. Batteries make sense from the financial standpoint if the savings from energy storage are higher than their ownership cost.

Some electricity tariffs in Australia have kilowatt-hour prices that change depending on the time of the day, where the highest prices apply during peak demand hours. You may be wondering if batteries make sense by themselves, without commercial solar power, for energy arbitrage: storing less expensive off-peak energy for consumption during peak hours. Unfortunately, even off-peak rates result in a higher electricity cost than solar generation, so the savings potential of energy arbitrage with batteries is still very limited.

Example #1: Effective Use of Commercial Solar with Batteries

Assume a commercial solar power system is being considered for a large movie theater complex. However, if the theaters open from 11AM to 12PM, energy is generated during most of the morning with no matching demand . In addition, afternoon occupancy is likely low during workdays. Surplus generation from this solar array can be exported to the power network, but Australian feed-in tariffs are very low compared with the retail kWh price, and surplus electricity exported to the grid becomes less valuable. On the other hand, if this commercial solar array is complemented with batteries, all morning generation and any surplus afternoon generation can be stored for nighttime use, displacing expensive electricity from the power network.

ABB Scaleable Industrial Batteries

Example #2: Commercial Solar with Batteries Not Working

There are also cases where the energy consumption pattern of a building does not justify an investment in batteries. As an example, assume a commercial solar array is being considered for a five-storey office building that only operates during the day. In this case, total floor area is five times more than the available rooftop area, so you are unlikely to generate surplus electricity even if the rooftop is fully blanketed with solar PV panels. The potential use of batteries here is very limited, perhaps only storing surplus energy during Saturday afternoons and Sundays, but it may not be possible to justify their cost if they are only used once per week.

Other Applications of Batteries

There are many cases where batteries are not used to achieve power bill savings, but rather because they are the most practical solution to supply electricity. Consider business sectors such as mining and dairy, which have facilities in remote locations where power network capacity is limited. The growth of these companies may be constrained by the power network, and the cost of grid infrastructure upgrades is often prohibitive. However, these sites tend to have ideal conditions for commercial solar arrays or wind turbines, which can be complemented with batteries to have a local power supply that does not depend on network capacity.

Conclusion

Although batteries are still expensive, they can be a cost-effective solution with the right set of project conditions. They have already been deployed successfully in remote parts of Australia with limited power network capacity. In addition, they may also be feasible in commercial buildings with ample rooftop area and a solar PV system, but where the energy consumption profile that does match solar generation.

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