Published on December 26th, 2014 | by Tina Casey6
Orix Offers Energy Storage Twist On Solar Leasing
December 26th, 2014 by Tina Casey
Weren’t we just saying that it’s easy to find legacy businesses that are transitioning into the clean energy market? Well, we were, and here’s another good example. Japan’s NEC Corporation, which can trace its lineage back to 1899, has just paired up its lithium-ion battery technology with a new lease-type financing deal for a combination solar system and energy storage system. That’s right, you get to have your solar cake and eat it, too: no money up front and you get to harvest free solar energy during the day, and store it for night-time use.
Of course, there are a couple of catches, the main one being that the deal is only available in Japan as far as we know. So let’s take a look at the terms and see if US dealers are likely to offer a similar solar energy/energy storage product any time soon.
Before we jump into the details, let’s note up front that with fossil fuel prices falling off the cliff here in the US it could get more difficult for renewable systems to compete on cost, at least for the short term. However, when you bring in the emergency preparedness angle and combine that with the growing intrusiveness of fossil fuel operations, the outlook gets a lot more interesting.
A New Solar Financing Deal With Energy Storage, Too
The Japanese financing company Orix is behind the new solar energy and energy storage offering, along with NEC, home builder Tama Home Co., and something called ONE Energy, which is an energy services joint venture between Orix, NEC and the company EPCO.
Part of the deal involves a solar panel leasing arrangement similar to the now-familiar power purchase agreement, in which you pay no money up front. You pay off the cost of the solar panels through your monthly electricity bill, which in the US is typically lower after you factor in rebates and other sweeteners. After an agreed-upon length of time, you own the solar panels. Under the Orix arrangement, there is no transfer fee involved.
The energy storage aspect seems unique to Orix and its partners. Instead of leasing the energy storage system, you rent it, and you return it to ONE Energy after a standard 15-year contract. That aspect of the deal might not be particularly attractive for the US market, since the customer has to pay for having the equipment dismantled and shipped back, but if you take a closer look at Orix’s terms you can see how the attraction in Japan works (break added for clarity):
The feed-in tariff price for double-tiered power generation systems, which enable more power to be sold by combining solar power generation with home fuel cells and storage batteries, is set lower than systems based on solar power generation alone.
The NEC-made residential storage battery system is not considered to be a double-tiered power generation system. This is because, through automated control, the system does not supply electricity to the home from the storage battery system when surplus electricity from solar power generation is available.
Clever, no? That’s where the “smart” in smart home comes in.
As for why ONE Energy wants its battery back, we’re guessing that’s a marketing solution aimed at keeping the cost of the combined system low, while guaranteeing that the lithium-ion battery makes it back into the recycling stream.
Energy Storage And The US Distributed Solar Market
Now let’s take a look at the US market, where “glut” is becoming an inadequate term to describe the massive amount of petroleum and natural gas moving around the country.
Part of the oversupply is due to the emergence of new energy efficiency and energy management technologies, so depending on the scale of your household energy use, sticking with natural gas or home heating oil may not save you all that much money compared to entering a PPA (power purchase agreement) for a home solar system.
At least one solar company is betting that the attraction of energy security is significant enough to entice homeowners into the home solar market. That’s why SolarCity, for example, has paired up with Tesla to offer a packaged solar panel and energy storage system to residential customers, positioning the deal as a hedge against power outages and natural disasters.
Another factor in favor of home solar in the US is the ability to link your mobile energy storage unit (aka your battery electric vehicle) to your other household appliances. Throw in workplace EV charging and you have a convenience factor, too.
As for that intrusiveness thing we mentioned a while back, take a look at the landowners and other local groups fighting against the notorious Keystone XL pipeline. That’s just a drop in the bucket. With new pipeline and storage systems popping up all over the place, more stakeholders are taking direct hits for hidden costs of US fossil fuel transportation and storage sectors.
That’s over and above the fracking and mountaintop removal issues involved in oil, natural gas, and coal extraction.
Just this morning we noticed two examples in the transportation and storage sectors: a new natural pipeline that affects thousands of landowners in Virginia and neighboring states, and a new natural gas storage facility in upstate New York that is giving both residents and the local business community the heebie-jeebies.
With more stakeholders affected, the pressure is growing for cleaner, safer alternatives, helping to push the scales in favor of renewables.