Will customer preference drive adoption of energy storage the same way as EVs and solar power?

Question

A recent blog post lampooned the fact that the International Energy Agency has under-estimated the growth of solar energy in every single one of their predictions from 1994 to 2016.

In the electric vehicle world, in September 2017 Tesla sold more cars in the U.S. than Mitsubishi, Volvo, or Porsche (not including trucks/SUVs)(source).

In both cases, while economics, policy, and regulation, have been important factors, something else less precise and harder to predict has driven adoption of these technologies beyond expectations -- customer preference.

Electric vehicles and solar panels are visible and cool-looking. In the case of solar panels, even those who can't purchase their own (renters, for example) have made their preference known, resulting in higher rate of adoption by utilities, businesses, and municipalities.

Will this same factor drive adoption of stationary battery energy storage systems (BESS), which aren't visible or cool-looking? Is consumer preference for BESS enough to drive adoption faster than what economics, policy, and regulation would predict?

Rather than speculation, I'm interested in what the research/analysis/industry says about this.

Answer 1

Customer preference has been crucial at the start of adoption. Early adopters are driven more by non-financial features than by price. However, those early adopters only take a market so far. At the moment, they are the people buying Teslas.

However, they are not the main market for PV, and globally haven't been for a decade or so (they will still be in niche markets, but not in the global market) - there, adoption is price-driven. This started at scale in Germany with the feed-in tariffs, which were the economic incentive that drove take-up.

That's not to say there isn't a customer-preference angle there too, there always is; it's just that it forms a smaller and smaller share of the market as adoption grows. We do still see that customer preference in the UK domestic PV market, where houses exhibit a sort of "contagion" - you've more likely to get PV on your house, if your neighbours already have it.

As you say, there is less attractiveness in that, if the signal isn't public: an electric vehicle is a very visible signal of wealth, taste and virtue, as is PV. That's really not true of storage. There will still be early adopters who purchase storage despite the economics, but there won't be the same social cachet, nor the same contagion effect.

It's worth noting that the IEA's prediction on solar didn't fail through lack of accounting for consumer preference. Their predictions were wrong mostly because they got the economics wrong, they did not grasp how effective policies would be, and they modelled linear growth, assuming the first derivative of growth would drop to zero, despite having been strongly positive for years.

Answer 2

Battery storage has a few of strikes against it.

• It's not cool. If you cover half your roof with PV, everyone knows it. If you have a quarter of your garage filled with batteries, it's a lot harder to show off.

• It's not a separate thing. E.g. You can buy a Tesla, and as a car it works. You just plug it in at night. It's a drop in replacement for a Subaru if you don't live in rural Alberta.

If you are grid connected, battery storage requires significant modification to your house electrical system. At a minimum you need a transfer switch, so that your electrical system doesn't kill a lineman fixing the lines.

If you aren't connected to the grid, you need about 5 days worth of storage if you are using renewables. And your capacity has to be gauged to winter usage when sunlight is thin, and winds tend to be at higher elevations. This is a lot of battery that will be mostly charge most of the time.

In either case to make best use of the battery storage, you want to run as much of your house as possible using low to mid voltage DC. This requires having two separate wiring systems in your house. Unlike ships and airplanes, houses are not generally built to be maintained, running more wires means having to take walls apart or have surface mounted cable ways in interesting places.

• Battery tech is in flux.

Li-Ion batteries are getting more mature, but there is probably another factor of 2-3 that will be squeezed out of them. There are a raft of other technologies in the wings Lithium-Air; Sodium-Air, Sulfur air. Flow batteries vs plate batteries.

For example: Current work with sulfur air looks like around 40 Wh/liter of solution, so 4 50 gallon drums hold 8 kWh -- about what a house uses in a day. And putting a 3 kW PV array on a 2 car garage would generate about 3000 kWh/year or about 250 kWh/month which is about 8 kWh/day. If you want to be on grid, then you have a system that will allow uninterupped usage for up to a 1 day power outage, just on battery. For 8 months of the year you could probably hold your own on that with what the recharge did during the day. You might have to be a bit more conscious about not using heavy demand items. Of course in the winter you are only getting 2-3 kWh/day. That sucks.

(Note these estimates are done for Edmonton -- Latitude 54 degrees north. 8 hour days mid winter.)

Anyway conclusion:

It's too early for consumer preferences to get a big hold.

Battery storage is going to be a utility thing long before it's a consumer thing. You will see the utility coming to you and saying, "We have 4 households on this transformer. We will pay you $60 a month on your electric bill if we can have a 5x5 space in your garage to put an energy storage system. This will allow you and your neighbors PV systems to charge the batteries during the day while you are at work, so that you can plug in your EVs to charge at night.