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Routes to market for residential storage in UK’s changing policy landscape

A number of options exist for bringing the UK market to life, Ray Noble says. Image: SMA.

In the third quarter of last year, things looked optimistic for a speedy rollout of energy storage at residential level in the UK. At that time, PV Tech Storage spoke to several major and smaller manufacturers that were interested in bringing products to market, albeit at a scale more likely to appeal to early adopters who wanted to pair their home solar to a battery than as a mainstream proposition.

The market has taken time to materialise, but then so too did Britain’s solar energy industry, before last year it unexpectedly passed the 2GW mark of installations in total, including over half a million solar rooftops.  

This week, there have been some major changes affecting the solar and storage industries in the UK, both directly and indirectly. Proposed policy changes have rocked and shocked Britain’s solar energy industry, especially at ground mounted scale, with incentives for solar farms smaller than 5MW expected to close in April next year. The government also revealed that the Levy Control Framework (LCF), the budget for green projects, is heading for an overspend.

However, it’s not all doom and gloom for solar, especially in combination with batteries. Energy minister Amber Rudd has spoken of the potential for energy storage, both before this week’s proceedings and during them, to add reserve capacity, to stabilise the grid and integrate renewables – in short, all of the things this site has been discussing since it launched.

"Storage will never get a subsidy"

While Rudd has previously said that some public money could potentially be used to “bridge the gap” to market for some, mainly larger scale energy storage technologies, it is likely subsidies can be categorically ruled out, especially in the near term and especially at residential scale. According to UK solar industry consultant and expert Ray Noble however, there are other ways a market could be brought about, some of which the government Department of Energy and Climate Change (DECC) is already considering.

“Storage will never get a subsidy. (Chancellor George) Osborne will never provide any more subsidies,” Noble says.

“What has been talked about is that, with solar – and this is why Amber Rudd said solar and storage work very well together – you’ve got [an estimated] 750,000 customers already. You can knock on their door and ask if they want storage and also tell them they can still keep the 4.5p feed-in tariff (FiT) they get for exported electricity.”

Noble says that other possibilities include tax breaks of various kinds or a leasing model for batteries, perhaps similar to that exercised already by automotive makers and indeed by many solar installers in the US for home PV systems. But, these – and in fact any other sustainable measures – will have to come from an approach that makes long-term financing attractive.

Noble says, the UK’s most senior energy minister is also aware of debates over time-of-use charges, which could mean at peak times electricity could be sold by solar-plus-storage owners at a premium price, further incentivising adoption while also acting as a tool of awareness of how best to use energy at home and in the grid.

“Amber Rudd said smart meters could change the pricing in every sector of the 48 half hours of the day. Therefore it could be more expensive to use electricity at certain times of day, and automatic controls will come along in any case. Smart meters will start to educate the customers on what they can do – they will also allow you to use your batteries or storage to an Nth degree.”  

Noble is also bullish that a great deal of stimulus will come from the EV industry, with Nissan and others given incentives to locate their European manufacturing in the UK. Second life batteries exist and the possibility of repurposing these for stationary storage is being looked at seriously. As this article was being written, London’s mayor Boris Johnson unveiled plans to make London the “EV capital of Europe”, suggesting enthusiasm for electric cars continues to grow.

Codes of conduct

A code of practise for installers will be produced, Noble says, which should be mandatory for both installers and vendors of storage systems. Another UK industry veteran, Martin Cottrell of Sundog, who has previously blogged for PV Tech Storage’s UK sister site Solar Power Portal on the subject, is heavily involved with this process, Noble says.

Beyond that, financiers need to become comfortable with those long-term assurances – something which took a long time for solar, Noble says, but equally something storage could learn from.

Next week, PV Tech Storage’s publisher Solar Media will host a round table event on residential energy storage, bringing manufacturers together with industry figures and analysts to discuss some of the best paths to market for the technology.

There is much enthusiasm on several fronts for energy storage in the UK, with even mainstream tabloid The Daily Mail, better known for scaremongering stories about immigrants and cancer, recently running a piece on its online news outlets praising German maker ASD Sonnenspeicher’s home systems and national broadcaster BBC, among others, running items on UK maker Powervault and US giant Tesla.

Ray Noble believes that critical now at this point in time is a government strategy on how best to take the storage market forward. He personally believes this will start at smaller scales, in the home, with the debate on grid-scale storage – while relevant – to begin in earnest a little further down the line. He also thinks that, while storage in its own right can be invaluable for grid-balancing and other applications, for now, pairing it with solar is the right way in.

“When storage is a certain price and volume, it means you’re saving x amount, customers, the grid, the government will save a certain amount – someone needs to calculate and account for that.

“If they play the angle right, the government should have a storage strategy. What comes along first? How does it feed in? What volume does it grow? Where does it go? What’s the impact in terms of making huge savings in cost over building [thermal] standby power stations, when you get to a certain point, for example?

"Solar and storage will kick-start the storage industry. Some of the other parts will spin off as a result of a growing awareness of storage either for bigger types of storage or more appropriate to different types of users or loads, or whatever that might be."

Tags: amber rudd, ray noble, britain, solar-plus-storage, renewables integration, battery, power generation, grid stabilising, subsidies, leasing, solar media