SA unveils details of $100 million battery scheme, sonnen sets up production plant in Adelaide

It has been a busy weekend for the South Australia’s battery storage market, with big announcements coming from both politicians and industry players.

The government has revealed further details of its $100 million Home Battery Scheme, which will subsidize the cost of buying a home energy storage system for up to 40,000 South Australian households.

Already included in the 2018/19 budget as part of the government’s $180 million energy overhaul, the program is expected to kick off next month offering subsidies of up to $6,000. 

The home battery subsidy will be available to all South Australian households and scaled in line with the size of the system being installed.

This means that a household with a large battery providing 10kWh of storage would be in line for a $5,000 or $6,000 subsidy, the latter one being reserved for concession holders – such as pensioners and low-income homes.

Under the scheme, South Australians will be free to buy any battery they want as long as technical requirements are met for the storage system to be safe, reliable and capable of being integrated into a virtual power plant.

The subsidy levels and the subsidy cap are expected to reduce over time as competition in the market increases and the cost of home battery systems goes down, the government said in a statement.

To help deliver the $100 million program, the Marshall government has signed a Memorandum of Understanding with the Clean Energy Finance Corporation (CEFC).

“In working with the CEFC we expect to be able to further assist households overcome the upfront financial barriers to accessing storage technology by offering households competitive, flexible loans where needed, in addition to the subsidies,” said Minister for Energy and Mining Dan van Holst Pellekaan.

While the subsidy will be applied to the battery component only, households will be able to apply for finance to assist with the purchase of new or additional solar panels as well as the battery system, the government noted.

According to the current prices, the battery subsidies could cover even more than a half of the system’s costs, depending on the battery size, type and use.

A dedicated website will assist homeowners to consider their suitability for a home battery system, choose between approved products and system providers, access the subsidy and apply for finance.

Meanwhile, battery storage providers are invited to use the same website to register as a “system provider“ by specifying the extent to which their products and services contribute to the South Australian economy.

“In assessing applications, priority will be given to System Providers that commit to installing approved battery systems that are manufactured or assembled in South Australia,“ the government said.

sonnen establishes a battery manufacturing hub

Just one day later, German battery storage provider sonnen announced it is setting up a production facility at the former Holden car manufacturing site in Adelaide, confirming its systems will be available at lower prices for the households participating in the government’s battery program.

The move was first announced  in February, at the time of the Labor government, when sonnen said it would supply storage systems in Adelaide as part of the government’s virtual power plant under a five-year deal.

The company forecasts the factory to create more than 430 jobs across its operations and installation division within six months of the centre opening. It is expected to set up shop by November 2018.

“Sonnen will bring great benefits to South Australia through jobs at its Australian headquarters and factory in Elizabeth, lower energy prices for households that take up the battery program [Home Battery Scheme], and increased retail energy competition, decreasing energy prices for everyone,“ said sonnen founder Christoph Ostermann.

“Furthermore, we expect to contribute to increased grid reliability through the ability of the network of sonnen batteries to store energy and act as a virtual power plant in a decentralized grid.“

In addition to manufacturing and assembling batteries at the new plant, sonnen will use Adelaide as its central shipping facility for Australia and the Asia and South Pacific region.

Earlier this year, sonnen closed a new funding round from a group of investors led by Shell Ventures, and earmarked the resulting €60 million ($97.5 million) of capital for expansion in the U.S. and the Australian markets.

sonnen entered the Australian market in 2016 with its sonnen-flat battery storage package, charging households a flat fee of between $30-$50/month. In 2017, it has partnered with solar retailer and installer Natural Solar to roll out the sonnen-flat program.