Battery storage expected to grow despite market downplay

Author: Darvin Tocmo  Date Posted:23 June 2016 

Solar battery storage is on the rise, according to Morgan Stanley. It will continue to do so despite Australian energy market thinking otherwise.   

disruptive power of solar-plus-storage

For top investment bank Morgan Stanley, the growth of solar-plus-storage in Australia will be phenomenal. Specifically, installation rates will be four times faster than the expectations of the current energy industry.

By 2020, they foresee one million Australian households all set in storing the sunshine. While this sounds like a huge leap from the current figure of 2,000 homes, the global financial firm is confident that the take-up may even reach 2 million homes in “high case.”

Australian market not seeing it

Apparently, Australia’s utilities are underestimating the solar uptake.

In a report written by Morgan Stanley analysts, the company shares that they think “most incumbent utilities downplay the earnings risks from solar and battery take-up, and the market has not yet priced in the retail and wholesale market effects.” Utilities view battery storage as a “medium-term” opportunity. To them, it would take 5-10 years for “payback” to happen.

The Australian Energy Market Operator (AEMO) sees 6.6GWh of battery storage by 2035. This is the same as Morgan Stanley’s prediction, but only by 2020 and in a “low uptake” scenario.

High hopes for solar-plus-storage

The discrepancy is astounding and Morgan Stanley admits to having aggressive estimates. However, the company is firm in its forecast, especially after releasing a groundbreaking report on this last year. Their study revealed high hopes for Australia as a hub for solar power and battery storage.

Australia, after all, is an apt testing ground due to its ever-increasing solar households and sunny climate almost year-round. High electricity costs in the country and the growing environmental awareness of its citizens also contribute to the popularity of solar energy.

Demand for battery storage is likely to follow as solar feed-in tariffs (FIT) take a hit, too. And if Morgan Stanley is right, within a couple of years, battery storage installation will be forty percent cheaper. The only reason to shun the idea of battery storage is probably lack of knowledge about its costs.