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'Doesn't make sense': New guidelines threaten booming home storage market

Peter Hannam
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The booming market for home solar storage could be thrown into disarray if proposed safety guidelines force owners to move their battery units outside.

Draft guidelines to be released by Standards Australia within weeks are expected to place restrictions on where battery packs supplied by companies such as Tesla and Alpha-ESS can be installed, with industry fears that placement within homes and garages will be banned.

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"If reinforced, more than half the current players will be made bankrupt or they will pull out of Australia," Dong Lin, managing director of Alpha-ESS. "It doesn't make sense...Australia will be way behind the rest of the world."

Mr Lin, who sits on a sub-committee that represents storage companies, said confidentiality rules limit what can be discussed publicly before the guidelines' release. Still, indications are that Standards Australia will require battery units to be housed in a costly "bunker" outside even though the materials used are safer than those in mobile phones and lap tops, he said.

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"The risk is very minimal that [the units] will catch fire or explode," he said. If such safety rules were taken to their logical conclusion, "all lithium batteries would have to put outside, and in a bunker".

Standards Australia, the nation's peak standards body, said in a statement that the new rules "will enable the safe installation of battery energy storage systems".

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Provisions would cover all battery types and the mitigation of hazards, and would be open for comment over nine weeks, tentatively from April. Before a standard is applied, feedback would be considered, a ballot taken among stakeholders, and then it was up to governments to choose to reference it.

"In these circumstances, further speculation of a 'ban on on-site storage' by Standards Australia would be inaccurate and misleading," the statement said.

Unconvinced

Industry insiders remain unconvinced that while "on-site" installation may be permitted, the standard may preclude placement inside a home or garage and require housing inside a "bunker" outside. 

Any disruption of the nascent storage industry would hamper the take-up of batteries at a time when consumers are increasingly anxious to curb reliance on grid-supplied electricity amid soaring energy prices and reduced reliability in parts of the country, such as South Australia.

The new standards, if imposed as feared, could deter people adding storage to their solar systems, and may deter others from taking up both. For those batteries, they may have to undertake expensive modifications to meet the new requirements.

Prime Minister Malcolm Turnbull, who has installed batteries and solar panels at his house on Sydney Harbour, on Monday criticised Labor for advocating higher renewable energy goals without promoting storage too.

According to Alpha-ESS's Mr Lin, Australia installed about 6500 storage units in homes last year, with his company providing about 800 of them. There have been no reported incidents. 

The market was expected to grow to 20,000-30,000 this year, with demand rising at the 300 per cent so far in 2017.

"A lot of customers are calling to ask about the potential changes," Mr Lin said. 

50 per cent jump

The draft guidelines appear likely to be much more restrictive than other nations. Germany, for instance, has installed 50,000 such units inside homes, he said.

A typical household system with 5-kilowatt of solar panels and 5 KW-hour storage capacity costs about $12,000-$13,000.

Early estimates of the cost of building outdoor cages to house the storage are about $5000, potentially lifting the system's costs by 50 per cent, he said.

Placing lithium-ion batteries outside home may also reduce their performance.

"Ideally, they should be installed where you have control over the environment," and shielded from extremes of cold, heat and humidity, Mr Lin said.