For a lot of America, the current face of battery technology is Elon Musk. Plans for his company, Tesla (TSLA) , to build a battery “Giga Factory” has been much ballyhooed for its disruptive potential. These batteries have the potential not just to power a massive fleet of Tesla’s electric cars, but can be combined with home solar systems for a more complete home energy system.
Musk and Tesla are not the only game in town, though. Energy storage technology is a lot larger than any single company or person. It’s arguably the most important development in the energy industry in decades, and Wednesday’s news that battery manufacturer LG Chem (LGCEY) , the top-ranked lithium ion battery manufacturer according to Navigant Research, is partnering with intelligent power electronicsmaker Eguana Technologies ($STGYF) (EGT:CA) is a sign that this segment is rapidly gathering momentum.
Home Battery Systems Essential to Expanding Rooftop Solar
Rooftop Solar is growing like crazy. According to Goldman Sachs, rooftop solar in the US will grow at a CAGR of 40% over the next 2 years. There are plenty of reasons for this, but the biggest one is that it’s cheaper than any other source of new power and allows individual Americans to be part of the solution to our climate change challenge. Rooftop solar combined with a home battery system featuring a high-tech lithium ion battery like those manufactured by LG Chem can be used for back-up power, to charge electric vehicles, or even to go off the grid entirely by capturing solar energy more efficiently. It’s all part and parcel with a new era of renewable energy ushered in by improved energy storage technology.
Not everyone is happy about the growth in solar, though. Utilities are challenged by growth in privately owned solar, both economically and technologically. The result is utilities beginning to push back against the installation of new solar capacity in residential areas. Too much solar not only means less energy purchased from the grid, it also makes it challenging for the utility to meet voltage and frequency control standards mandated by regulators for residential feeders to provide the necessary firm, high-quality power. This is further complicated by the need to accommodate new sources of energy on the feeder, which must go somewhere unless they are stored.
The solution is the home energy storage system.
An efficient home energy storage system solves the problems that the utilities are facing by turning residences into more independent energy systems, allowing everyone access to lower cost solar electricity without putting undue strain on the grid. It’s something that should remove the barriers to expansion of residential solar power beyond the first lucky few on the block to install systems.
Power Conversion and Control System the Critical Link
A home energy storage system, working in conjunction with rooftop solar panels, presents a range of its own challenges. Electric grids require AC power while batteries store electricity in DC power, which requires a power control system (PCS), or power inverter to convert the electricity. The PCS must be able to pull and push electricity in and out of the battery (bi-directional function) while operating at very high efficiency to avoid significant conversion losses. Enter Eguana Technologies.
Eguana, already the leading provider of PCS platforms in Germany where it is has delivered more than 4,000 PCS units of the company’s flagship product “Bi-Direx”. Further, the company has announced that it recently achieved certification in North America, which allows it to begin winning new business there. The North American Bi-Direx PCS is based on the previously released Bi-Direx global platform, which the company has been delivering into the European markets over the past 18 months for solar self-consumption applications.
The Bi-Direx PCS is one of the few bi-directional PCS’s that operate at low voltages, but has the highest conversion efficiency of any product in the global market. The same platform also allows home owners to switch over to battery backup power if the grid fails which is critical for North American home and business owners.
Two Major Market Players Pairing for the Future
The combination of LG Chem’s batteries and Eguana Technologies’ PCS, referred to as an “AC Battery,” means that homeowners and utilities have new options to manage their energy needs. Working together, the two companies provide a simple, turnkey solution to system integrators, energy management companies, solar PV installers, solar PV third party ownership companies, and utilities alike.
On the whole, the excitement surrounding the industry is likely to continue building. Solar energy has long been a dream that lacked the sort of practicality would make it feasible. However, with the rapid improvement of technology and the decline of prices for both panels and high-tech batteries, the day where the installation of a complete home solar + battery system is the result of a simple, direct cost-benefit analysis rather than an idealistic concession for environmental-minded home owners.
The pairing of these two established companies, both of which are already active leaders in the market with proven products, could be a bellwether for a much larger shift in the industry.
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