So what was behind the process of designing the Energy Management System?
One of my responsibilities is to look at where the market’s going, what kind of technology will be needed in the long term to support the market. One thing that was really apparent is that storage will become really crucial, particularly for the continued growth of solar. We knew that just as the high concentration of PV starts happening in certain markets, you need technology solutions to solve the intermittency challenge.
We started looking at how people do storage today and the storage market really developed from the off-grid market and how people have been doing storage for the last 30 years, primarily for the off-grid market.
So this is installations in remote areas that might have been predominantly lead-acid based, “old school” systems?
I said, looking at all the older, off-grid technologies, the way they were doing storage is great for a one-off, custom-build type, but in order to get broad scale or the option of behind the meter storage that solution was not going to fly.
It was performance problems, reliability problems, scalability problems, installation costs, integration costs. If you just look at an off-grid installation it’s got a PV charge controller, battery bank, off-grid inverter, AC coupled inverter, another PV bank, load controller, it is stunning how complex it is. So we said, 'that’s not the right approach'.
So earlier you mentioned that this is a way of taking your ‘smart solar’ principles into the energy storage space with ‘smart storage’ – what do you mean by that?
We came along and said, solar PV installation, rather than centralised conversion, you do everything in a distributed manner. We applied the exact same principles for storage. Honestly, there is no difference between a PV cell and a battery cell. The only different thing is bi-directionality. It’s a cell at the fundamental level. So we said all the things that we saw in a centralised power conversion as it pertains to PV, applies to storage as well.
[Taking] the exact same principle that we did for PV which is an AC module, effectively, a PV module microinverter, we used the same building block. So we took a very small set of cells and put a bi-directional microinverter in it and turned it [into a] small, basically AC battery. So when you have that building block, now you don’t have any centralised power conversion, you have a microinverter sitting on top, in software, it acts like a charge controller in one direction and acts like an inverter in the other.
The company's new AC battery, expected to be rolled out gradually from the third quarter of this year. Image: Enphase.
So approaching solar from a different angle, with microinverters, has informed the company’s approach to storage as well, but has that given Enphase any specific advantages?
There are a few things that we have done right from the very beginning of the company that we are now seeing a tremendous amount of leverage [on]. We said right from the very beginning, any piece of hardware that we designed, will never be hardware by itself, it will always be a system. So there’ll always be communications and there’ll always be software. That was one.
Second, whatever hardware we do build, will be completely software defined. So we don’t believe in analogue. Go everything into the digital domain and process everything in the digital domain. That’s incredibly powerful. Then the communications infrastructure that we’ve built is fully bi-directional and that’s very powerful, that combination of a software defined power converter DC-AC-AC-DC and bi-directional communication, that we can do remote upgrades of software, is a very powerful combination. So when it comes to leverage, just like what we did with PV, because our PV systems are fully monitored and everything, right, we today collect 850 gigabytes of data per day, almost a terabyte of data per day on 250,000 systems in 80 countries.
So we took exactly that architecture that we had for solar and applied it to storage.
Enphase's Raghu Belur claims the company are moving from 'smart solar' to 'smart storage'. Image: Enphase.
One thing that comes up a lot in the energy storage space now is product differentiation. What sort of factors might be taken into account by the consumer or installer to say that one home energy storage solution might work better than another?
I think there’ll be many levels of differentiation. There will be differentiation for how the system gets installed, on what the system performance is, there’ll be differentiation around the maintainability and scalability of the system, there’s gonna be differentiation on what the software management system looks like.
The other thing we’ve paid a lot of attention to is safety.
So we ended up building a pretty sophisticated model, that takes in as inputs, things like – round-trip efficiency, depth of discharge, cycle life, temperature performance, cost. All these things and we convolve it with what our operating environment is, and out pops an answer that says this is a good chemistry to do this. We met a lot people with very good batteries, top, top notch battery companies and ran it through this model and really feel very good about our choice with [Japanese company] Eliiy Power, both in terms of performance as well as safety.
One more thing is cost. A lot of people say- and it’s kind of strange to hear them say- “is that at $200 per kWh, $300 per kWh, $150 per kWh” that’s a very incomplete story, right? I could do a $100 per kWh battery, it will last only six months and you only get depth of discharge at 20%, it’s crazy!
So when we thought about cost, there are four costs associated with batteries. You have to look at chemistry cost, the power management cost, the labour cost of installing and the integration cost.
Plug-and-play seems to be a ‘buzzphrase’ in the tech space at the moment, not least of all in energy storage marketing.
I’d never heard of a battery being plug-and-play. We came along and made it so modular, one person install, plug-and-play, so I think that’s a big differentiation, we haven’t seen anything out there like that.
People say plug-and-play, I’ve heard and I think it was funny, but we saw somebody, a well known company, announce a storage product and they were like 'plug-and-play!' and I’m like, there’s nothing plug-and-play about a hundred-kilo box!
For us, it’s literally: hang it on the wall and plug it into a connector. We take it to an extreme there on how simple we can do it.
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