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Batteries Germany solar panels & flag via Shutterstock

Published on April 17th, 2013 | by Zachary Shahan

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Germany’s Energy Storage Incentive To Start May 1



We covered Germany’s coming energy storage incentive back in February. At the time, an official announcement was expected a week later. A couple months later, the incentive seems to be fully determined and is set to start on May 1.

Germany solar panels & flag via Shutterstock

Germany solar panels & flag via Shutterstock

As reported in February, the focus is on battery storage technology for solar PV systems. For year one, €25 million is being set aside. The money is going to be dished out by German state bank KfW, which just announced a record profit of €2.4 billion (yes, billion with a ‘b’) for last fiscal year.

“The state bank will provide the financing, thus initially covering the necessary funds for the support program. Overall, the funding program is expected to run for two years; €25 million should also be made available in 2014,” PV Magazine writes.

“From May 1, the purchase of new battery storage for photovoltaic systems will be subsidized up to €660/kW of solar power, said Germany’s solar industry association, BSW-Solar, in a statement released. Plant operators can apply for financial support for photovoltaic projects that are installed in 2013 and have a maximum capacity of 30 kW.”



Here are some more rules: The incentives can cover about 30% of the battery costs. The “soft loans” can be for 5, 10, or 20 years. The PV power plant that the battery system supports must send at least 60% of its power capacity to the grid — a requirement that sticks throughout the course of the power plant’s life. And, lastly, the battery systems granted these incentives must have a guarantee of at least seven years.

The policy certainly doesn’t seem to leave room for manipulation, and its targeted use seems pretty clear.

Thoughts?

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About the Author

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he's the Network Manager for their parent organization – Important Media – and he's the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.



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  • http://www.facebook.com/jhildenminton James Hilden-Minton

    It seems an easier way to financially motivate storage would be to set feed in tarriffs to pay out only when the spot price for electricity is above a threshhold value. As more PV penetrates the market, midday prices on sunny days will be driven down to zero and even lower. There is no economic need for FiTs when this happens. When the spot price is critically low it would be better for some solar producers to charge up their batteries and sell it at peak prices in the evening or early morning. FiTs when the spot price is low only creates a disincentive for storage while FiTs that only kick in when the spot is high will motivate storage.

    • Bob_Wallace

      Perhaps, but that sounds complicated. People may need something a bit easier to grasp and more concrete. A significant discount and low financing is easy to comprehend.

  • Dave2020

    I’d have thought that PV and BEVs are a marriage made in heaven, aren’t they?

    There must be millions of commuters who leave their cars parked up all day, so incentivise BEVs and the provision of charging points to be used during the hours of solar output.

    Why encourage additional storage installation? The PV pioneers only need to have one battery pack surely.

    The German auto industry is a bit slow on the uptake, in getting EVs to market. Are they still married to the old ICE?

    • http://soltesza.wordpress.com/ sola

      Automotive-grade batteries are MUCH more expensive than grid-scale storage so I don’t think that utilities will ever rely on EV batteries aside from improved demand-management.

      • Dave2020

        All I’m saying is, it’s not a good idea to deploy more grid-connected battery storage than is absolutely necessary, This kind of incentive may be mis-directed, if it duplicates other battery capacity that’s gonna be available.

        From an environmental and ESOI standpoint lead-acid batteries (2) are not as attractive as Li-Ion (10). We should be thinking beyond the short-term cash equation.

        And anyway, EV batteries should have another life, long after ‘death’:- “ABB and GM: Reusing EV batteries for energy storage works!”
        http://www.smartgridnews.com/artman/publish/Technologies_Storage/ABB-and-GM-Reusing-EV-batteries-for-energy-storage-works-5293.html#.UXJCMHCUC74

        The auto industry’s love affair with the ICE is more about emotion and commercial inertia. Electric motors are FAR more efficient – smaller – lighter, etc. Range extension is the way to go.

        “On 26 October 2010, a Li-poly powered Audi A2 covered the record distance of 600 km without recharging.”
        http://en.wikipedia.org/wiki/Lithium_polymer_battery

        The car was said to still have 18% of its charge remaining on arrival in Berlin and the average speed was reported as being 90 km/h (56 mph). The “kolibri” batteries used in the design are so compact that the vehicle retains its four seats and boot space. A production version would be possible. “The technology could be implemented today. It is up to industry to use this potential,” commented Mirko Hannemann, the head of DBM.

        NB: The retro-fit batteries didn’t compromise internal space at all.

        Arguably, the 15-year-old A2 design is technically better than the new Audi A1, but it wasn’t a good seller – bummer! I bought a second-hand 1.4TDI that gives me 60mpg. I figure the most eco-friendly (definitely the cheapest) option is for me to get my low-mileage use out of it for another 30 years. I wonder if I’d be able to fill up with non-fossil fuel in that time?

        It’s a glorious day, so I’m signing off to head up the mountain on my titanium bike.

  • Brian

    Is anybody else confused about how exactly this subsidy will be given? Can someone please illustrate with an example that shows how the accounting would figure for a subsidy recipient? Thanks

    • Bob_Wallace

      I haven’t seen anything that suggests the details are settled. Part of the package seems to be low cost loans for the purchase and a 30% subsidy, which might be 30% off the top or ?

      If that’s how it works you might purchase, for a example, a $1,000 system and finance it at an attractive rate through the government. And your starting loan balance would be $700. But all that is speculation.

      • Brian

        Please excuse the long post but I’ve found some information that might be helpful for everyone regarding the specifics of this policy from BSW Solar, Germany’s Solar Industry Association.

        Subsidy Calculations
        The subsidy rate as calculated as 30% of the maximum eligible costs of 2000 EUR (for combined solar/storage installations) or 2200 EUR (for retrofitted storage installations) per kWp of the solar plant. For retrofitted storage systems, the Federal Environment Ministry will fund systems commissioned at least six months before January 1, 2013.
        The amount of the grant will be calculated as follows:
        I
        Determination of the Energy Storage System Cost:
        The cost of the energy storage system is calculated as the difference between the cost of the total system investment and the cost of the PV system.
        II
        Subsidy Rate Calculation:
        The rate is determined by the quotient of the cost of the ES system and nominal power of the photovoltaic System (kWp) multiplied by 0.3 (efficiency quotient). The result is the subsidy per peak kilowatt of PV System, with a maximum of 600 EUR for new combined solar and storage installations and 660 EUR for storage retrofitting.
        III
        The total funding is obtained finally, by multiplying the Nominal power of the photovoltaic System (kWp) with the calculated subsidy rate (EUR per kWp)

        Example Calculations
        Example A:
        Combined installation of a 5kWp PV system and a 3.3kWh Li-ion Battery system
        I
        Total cost of installation: 19,500 EUR
        Cost of the PV system: 1700 EUR/kWp x 5kWp = 8500 EUR
        Cost of the Storage System = 19500 EUR – 8500 EUR = 11000 EUR
        II
        Funding rate for memory per kWp:
        11,000 EUR/5kWp x 0.3 = 660 EUR per kWp
        This type of system installation, a combined solar and energy storage installation, would qualify for a maximum subsidy rate of 600 EUR per kWp, so the subsidy rate used here would be only 600 EUR per kWp.
        III
        Plant size: 5 kWp, Subsidy rate 600 EUR per kWp
        5kWp x 600 EUR/kWp = 3,000 EUR energy storage system subsidy

        Example B:
        Retrofitting a 4kWp photovoltaic system with a 3.3kWh lead battery system
        I
        Cost of storage system: 6,000 EUR; Plant size: 4kWp
        (6000 EUR/4kWp) x 0.3 = 450 EUR/kWp
        This storage system would qualify for a subsidy rate of up to 660 EUR per kWp, so in this case the subsidy is not being fully exploited.
        II
        4kWp system size; Funding per kWp: 450 EUR
        4kWp x 450 EUR = 1,800 EUR energy storage system subsidy

        Note that the size of the battery system (kW or kWh) plays no part in the calculation of its subsidy.

        Source: http://www.solarwirtschaft.de/fileadmin/media/pdf/Speicherprogramm_Hintergrundpapier.pdf

  • Russell

    As I have said before, watch what happens when http://www.eosenergystorage.com/ comes to the party. They may want to re-think about producing commercial energy storage before residential.

    • Bob_Wallace

      If they can pull it off. I’m certainly rooting for them but lots of people promise and only some deliver.

      EOS is going to be producing for the grid, at least at first. My guess is that when things even out storage will be mostly at the grid level.

    • http://zacharyshahan.com/ Zachary Shahan

      we have a story about another potentially big energy storage company coming on Monday. and while the story doesn’t address Eos in particular, it does raise some flags about zinc-air batters. Of course, Eos claims to be doing them completely different from how anyone else ever has. Hoping they are for real, but no idea yet. We’ll see in 2014, presumably.

      • http://twitter.com/PoweredByEos Eos Energy Storage

        Hi Zachary,

        We’d be happy to chat with you about our Znyth technology if you are interested. Email me at bbarclay@eosenergystorage.com — or connect with us on Twitter.

        Best,
        Ben Barclay
        Business Development
        Eos Energy Storage

  • http://twitter.com/Twundit Nichol Brummer

    This could be a seriously big thing .. could kick-start a whole different way of using solar PV. However .. I’m wondering how actual use of these batteries will be made profitable enough to compensate for the energy losses in charging/discharging the batteries. Unless Feed-In Tariffs have already sunk so low below retail rates that variations of the wholesail price is enough of an opportunity?

    • http://soltesza.wordpress.com/ sola

      This will make stationary batteries much-much cheaper because it will bring mass-production to this segment.

      For example, vanadium based flow batteries are currently very expensive and hard to purchase. There is nothing inherently expensive in those batteries, simply the volume of production has been extremely low.

      Now, if the German market soaks up these systems, the prices will go down significantly in the coming years.

  • Bob_Wallace

    Can meet the requirement right now with Trojan T-105 RE lead acid batteries. A new product Trojan developed for off-grid storage. Rated at 4,000 cycles which means roughly an 11 year lifetime. $0.16/kWh.

    Lead acids can get the market started and motivate other technologies to get into the game.

    • Ronald Brakels

      16 cents a kilowatt-hour is enough for a death energy spiral in Australia. But the tech would have have to be idiot proof to take off. (Not that Australians are idiots. We are wise in our simplicity.)

      • Bob_Wallace

        Installation isn’t any more brain taxing than putting a battery in a car. You need to understand that one pole is positive and one is negative.

        Maintenance is a matter of pushing a button once a month to equalize the pack. And taking the tops off once a month, filling with distilled water if needed. Car maintenance sorts of stuff.

        Actually you may find that filling every month is unnecessary. I fill every three months. But start with once a month.

        • Ronald Brakels

          Sounds good. But for Australians who are grid connected I expect storage technology that is pretty much connect and forget to become the mainstay. (It’s not that we’re lazy, we’re just… into simplifying our lives.)

        • Samuel

          Information over load bob, don’t even try to explain how battery works to Ronald, he can’t even maintain his solar system, he can’t even bear to wash his solar panels because he doesn’t get paid by the federal government to clean them. In Ronald latest post implied don’t wash your solar panels when they get dirty.

          • http://zacharyshahan.com/ Zachary Shahan

            i take Ronald more as practical and attentive to reality, but i know he has a habit of jumping on pink unicorn merry-go-rounds on the weekend — aren’t we all allowed a little fun?

          • Ronald Brakels

            I’m not scared of heights, just gravity.

          • Bob_Wallace

            It’s Ronald’s stalker…

          • Ronald Brakels

            I’m very relieved. It’s been so long since I’d heard from him I was worried he might have had a stroke and been lying paralysed on the floor while his pet sock puppets gnawed at him.

  • darklight_413

    Personally, I think this is very forward thinking and Germany will reap benefits in the future when they have a more dynamic and cooperative and more “crowd sourced” grid. This is the future and I see this decision having a positive effect on the energy storage industry. However, the restrictions are kind of a foot on the neck of innovation in my opinion. Maybe they’ll lighten up a bit once they see how successful it’s going to be. We should take serious lessons.

    • http://zacharyshahan.com/ Zachary Shahan

      yes, it’s a shame most of the rest of the world is a generation or more behind.

      • darklight_413

        Though I’m very optimistic about graphene superconductors. I think they’re going to change the world since the team at UCLA had the breakthrough. Bye-bye chemical batteries! Hello carbon-based, Earth friendly graphene.

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