After years of selling more expensive home battery systems, sonnen launched a new product on Thursday to compete with other popular options in the U.S. home energy storage market.
The Germany-based company, which was taken over by oil major Shell in 2019, has designed its sonnenCore system to provide daily cycling for network services as well as emergency power. It comes with a capacity of 5 kilowatts / 10 kilowatt hours and is priced at $ 9,500. It is thus in competition with the similarly sized and inexpensive LG Chem Resu and Enphase Encharge batteries. It’s a little smaller than Tesla’s Powerwall at 13.5 kWh.
The sonnenCore marks a further development of the sonnen strategy. As other vendors battled for Tesla’s low price, sonnen rose to the top with the ecoLinx, launched in 2018, to appeal to the luxury home automation crowd. At more than double the price of similarly sized household battery offerings, the ecoLinx promised a 15-year guarantee and the ability to control smart home devices to control both demand and supply of energy.
The new product, which ships this year but will reach full availability in 2021, comes at a time when the U.S. home storage market is bigger than ever. A record season of forest fires and hurricanes, in addition to coronavirus-related stay-at-home orders, has boosted customer resilience. According to Wood Mackenzie, US household storage systems have set consecutive records for the past five quarters.
“Now that we have this product at a much cheaper price, a lot more people will have access to sun,” said Adam Gentner, VP of Premium Products and Projects, in an interview this week.
Learn from the luxury market
Sonnen’s US CEO Blake Richetta said at the launch of ecoLinx that selling a high quality product to the luxury market would ultimately drive the company to bring these innovations to the masses.
Now the company has drawn the lessons from ecoLinx and incorporated them into the design of the sonnenCore, said Gentner.
Sonnen has developed its own batteries, inverters and a battery management system for the core. This approach saves some of the cost savings that result from the procurement of standard components. However, sonnen’s global purchasing scale (the company is more strongly represented in Europe, where it originated) leads to its own cost efficiency, and control of the design allows for greater control over usage.
“This enables us to better adapt this product to the requirements of the future and to adapt the current product,” explained Gentner.
The rules that allow home batteries to participate in grid services evolve in real time due to state policy and Rule 2222 of the Federal Energy Regulatory Commission. When new ways to make money with batteries emerge, sonnen can release software updates to take advantage of them.
Sonnen once again opted for lithium iron phosphate batteries, which were chosen for their safety features and durability compared to the nickel-manganese-cobalt oxide chemicals widely used in electric vehicles.
“We intend to install the battery indoors. We intend to use this battery for network services,” said Gentner. “It’s designed to be driven every day for the benefit of the grid.”
The core system is guaranteed for 10 years or 10,000 charging cycles. The ecoLinx with its higher guarantee and its more durable design is still the preferred offer from sonnen for high-performance network operation in a virtual power plant. The core is geared towards customer-oriented programs such as solar self-consumption, usage time and demand-response programs. *
Evolving revenue opportunities
In Germany, the power grid fails so rarely that sonnen doesn’t bother selling batteries for emergency power. Instead, the liberalized market rules in this country allow batteries in households and apartments to bid on the electricity markets. With the sonnenFlat program, sonnen supplies customers with electricity so that they can use their batteries for market cultivation.
This model does not work in the fragmented regulatory environment in the United States. On the other hand, the US network doesn’t work as well as the German one. Much of the interest in home batteries has been driven by US customers eager to turn on lights when the power grid fails.
However, Sonnen has been working on adapting the aggregated battery model from Germany. A virtual power plant with batteries has been set up in every unit of an apartment complex outside of Salt Lake City. This operates a demand-response contract with the energy supplier Rocky Mountain Power. Sonnen also worked with construction company Wasatch Group to bring a similar concept to California. At the same time, New England states have introduced a “bring your own device” paradigm in which utility companies pay customers to use their batteries to reduce demand during key hours.
It can be difficult to place backup batteries as a purchase that will pay off for homeowners. Private customers tend to buy them for security rather than economic reasons. However, the emerging sources of income improve the customer’s calculation for buying a battery and effectively lower the costs of clean emergency power.
“Customers obviously attach great importance to backup,” said Gentner. “With the ability to extract value from the battery, we will get closer to that [return on investment]. “
However, a single 10 kWh battery would be “pretty meager” to back up an entire house, Gentner noted. The former eco-product from Sonnen is more geared towards this with an 8 kW inverter and storage of up to 20 kWh. The sonnenCore can, however, secure important loads and take part in network programs that generate revenue on a daily basis, all at a much lower price than previously offered.
* Updated with more information on the Grid Services applications for Core and ecoLinx.