Joshua Leupolz

incentives to buy storage device

Discussion created by Joshua Leupolz Partner on 13-Apr-2017
Latest reply on 14-Apr-2017 by Joshua Leupolz

Hello, the market for home storage devices is starting to grow, but not that fast that we could talk about a huge market, for sure it has a huge market potential in the future. Also there are some large scale batteries installed for providing frequency control reserve to stabilize the grid. I think it is a very positive development but I wish it would happen faster to make a real impact on the electricity market, and to support the energy transition.

 

But my problem with storage devices (especially batteries but also flywheels etc.) is the fast decrease of prices. I mean it is very good that the investment costs are falling very fast for batteries, but that leads to a situation where it makes more economical sense to wait for some years to buy a battery. So if I want to buy a home battery to use better the energy from my PV panel I have to pay around 8000 € if I would wait for 2 or 3 years I am sure I could buy the same battery for below 5000 €. So there is no chance to save 3000 € of electricity costs during the 2 or 3 years, so it's better for me to wait. The problem is if everyone is as smart as me no one would by batteries and therefore the price for batteries wouldn't drop that fast.

I see the same problem for grid scale storage devices which deliver frequency control, here the payback time of your investment is between 10 and 15 years. The market for frequency control is a free market, where you have to compete each week again against all the others who wants to participate, so here I don't see how a battery build today can compete with a battery build in 10 years. So I expect that the future revenues for frequency control will drop further, so that the payback time will increase more, which then can lead to higher payback times than the battery life time, and therefore is financially nonsense. 

 

We can compare this situation with the pv industry 10 years ago, but here Germany and other countries introduced the feed in tariffs to give the investors a save revenue income. This worked very well but I don't see how we can adapt this to the storage problem.

So the only thing that work to support batteries is to give a support on the investment costs, so that the state is covering part of the investment costs, this is happening already in Germany, but I think this support is not high enough. So the problem I described above is mitigated but it still exists.

Does anyone of you have another idea how policy can support battery storage, or can give examples what governments are doing already in this sector?

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